Agents of change: Companies need to get act right

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The emphasis on premium as against cover of risk is the root cause of the recent woes of the industry. The emphasis on premium as against cover of risk is the root cause of the recent woes of the industry.
SummaryInsurance companies have for long been wedded to the concept of agents.

with basic parameters of health and income could have saved a lot of resources. If these were found satisfactory, then the proposal form could be filled for the policy. This will help eliminate wasteful expenses for companies.

Moreover, the regulator needs to go easy on licence fee for insurance agents and other authorised representatives like Rural Authorised Person (RAP) under the Centralised Service Centre (CSC). A licence fee of R5,000 for RAP and a similar fee charged by insurance companies, along with the kit, becomes too expensive for a beginner, who is in the dark about the future outcome of selling insurance and his profession.

In fact, banks have provided an easy way by authorising business correspondents to work for bank without charging any fee. The regulator could propose India Post to become a broker and this will provide unparalleled reach. Similarly, a common set-up should be explored to train rural agents, RPAs & business correspondents for maximum result.

The havoc caused by mis-selling has been so huge that there are no takers for insurance as career or a subject of pursuit in academics. Therefore, insurance companies need to join universities and educational institutions to partner with them in research projects, surveys, seminars and workshops to create interest and awareness among all stakeholders.

RR Grover

The writer is advisor in Amity University, Noida

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