 "Insurance agent numbers see first growth in three years")
The number of life insurance agents in India grew 3.1% in 2013-14, breaking the receding trend logged in the last three years.
According to the Insurance Regulatory and Development Authority of India (IRDAI) Annual Report for 2013-14, the number had gone up from 2.12 million as on March 31, 2013 to 2.18 million as on March 31, 2014.
In FY12, 994,635 individual life insurers quit, according to the insurance regulator's earlier annual report.
Since 2010-11, the number of individual agents had been decreasing until 2012-13. But 2013-14 witnessed 3.1% growth in the number of individual agents. While the private life insurers recorded an increase of 4.5%, Life Insurance Corporation of India (LIC) showed an increase of 2.0%.
"LIC had a higher number of individual agents than all private life insurers put together," said IRDAI in its report. At the end of the year 2013-14, the number of agents with LIC stood at 1.19 million. The corresponding number for private sector insurers was 0.99 million.
In 2013-14, the total number of agents appointed was 0.72 million and the number of agents terminated was as high as 0.65 million. While private insurers appointed 0.38 million agents, about 0.34 million agents were terminated. On the other hand, in the case of LIC, 0.31 million agents were terminated while it appointed 0.34 million agents.
The regulator has raised concerns about high levels of attrition. In the annual report, it said that even though there was a net increase in the number of individual agents, such high attrition may adversely affect life insurers’ business, policy persistency and public perception of the agency channel as a stable career.
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"It is, therefore, in the interest of all the stakeholders to work on reducing the turnover of agents and build a stable and growing agency force," said IRDAI.
Life insurance companies have been taking additional efforts to ensure that the longevity of an agent's career in the organisation and in the insurance sector is maintained. Apart from offering training and mentoring, financial and non-financial incentives are being offered to high-performing agents to attract and retain them in the sector.
Agent attrition has been an ongoing issue in the life insurance industry. To tackle this issue, Irda had earlier reduced the pass percentage from 50% to 35%. Further, IRDAI also decided to remove minimum persistency criteria (the minimum number of policies sold by agents that have to be renewed), leaving it to the board of each life insurer to have their own norms on persistency, the insurance regulator said. Before this, agents were required to have a minimum persistency rate of at least 50% to remain in business.