Life Insurance Corporation of India (LIC) is planning to better incentivise its agents to retain them. The state-run insurer plans to recruit close to 1 lakh agents this year.
Senior executives at LIC confirmed to FE that the insurer had lost close to 1.5 lakh individual agents, partly because of lesser number of new products and also due to stuff business targets.
“While we are yet to finalise the new incentive structure we are confident we can add a net one lakh agents this year. We are also planning to design new training sessions for our development officers (DOs). The final decision will be taken in the second week of May, when we will organise our annual conference on agents,” said a senior officer from LIC on condition of anonymity.
As of March 31, 2016, LIC had a total of 10.61 lakh individual agents, compared with 11.63 lakh in 2014-15, according to data from the Life Insurance Council. Currently, LIC has 22,000 development officers managing teams of individual agents and their development.
Senior company officials also said many agents had left because of stiff business targets. An LIC agent is required to sell minimum 12 policies per year, and if he fails to achieve this, he has an option to complete the target in another one year. But in the third year, if he fails to get 36 policies, his registration gets cancelled.
“In the last few months, we have launched four-five schemes and the response has been very positive. With our many popular products back in ‘new avatar’, we are confident that we can retain large number of agents in this financial year,” an official said.
Apart from LIC, private players such as Bajaj Allianz Life Insurance and ICICI Prudential Life Insurance have seen drop in the number of individual agents in the last financial year compared to the previous year.
On the other hand, insurers like Reliance Life Insurance, SBI Life Insurance, HDFC Life Insurance, Kotak Mahindra Old Mutual Life Insurance have seen rise in the number of agents in March 2016 as against March 2015.
Arijit Basu, CEO and MD at SBI Life, said: “It was our plan to have mix of both bancassurance and individual agents.
In the last few years, we have deliberately brought down the number of agents. Our strategy has been to remove agents who were inactive or not contributing in the business, and focus on recruiting the right kind of agents.”
Data from the Life Insurance Council shows that SBI Life had over 92,619 individual agents as on March 2016, compared with 83,656 in March 2015.
Industry participants believe that if the Indian economy picks up and the life insurance industry grows at 15-18%, new individual agents will join the industry in big numbers.