In a bid to check attrition in its agency force and raise productivity, government-owned Life Insurance Corporation (LIC) has launched a pension scheme for its agents who are earning a annual commission of Rs 1 lakh.

The corporation already has a pension scheme for agents who earn a commission of less than Rs 1 lakh in a year. Speaking to FE, DK Mehrotra, managing director of LIC, said, ?The corporation has introduced a new pension product called ?Samvarddhan? for its high earning agents. Under the scheme, an agent has to pay merely Rs 500 per month as his contribution. The scheme will not only benefit agents, but also help the corporation to improve its productivity as the agents need to sell more more products to avail the benefit.??

LIC with over 13.5 lakh agents expected that the new pension scheme can check 25% attrition in its agency force. Almost 95% of LIC?s total sales are generated by agents. Bancassurance by which insurers sell their products through banks hasn?t picked up as yet for the corporation. At present, LIC?s rural penetration is at about 50%.

?We are opening satellite offices. We have already appointed 5,000 development officers during the current fiscal,? Mehrotra said and added that the corporation wanted to expand its agency force.

?But, there are problems in doing that in rural areas as online training of these agents is not possible in those areas,? he added.

LIC has seen its market share going up to 72% in terms of new business premium. ?If we are able to retain it, it will be good for us,? said Mehrotra. LIC is also planning to launch a new unit-linked insurance plan (Ulip) during the current fiscal.

?Ulip sale has come down. We will add new features in our forthcoming Ulip products, so as to make them more attractive. At the moment our product mix between Ulip and non-linked product is hovering at 60:40. However, growth in traditional product is not providing big support to premium rise as the ticket size of these traditional products are comparatively small,? he said.

Meanwhile, the insurance regulator Irda has said that for all renewals prior to the financial year 2014-15, the average persistency rate for each agent for the years 2011-12, 2012-13 and 2013-14 should be at least 50% in terms of both policies and premium procured by such agent.

From the financial year 2014-15, the persistency rate for each agent should be at least 75% in terms of policies as well as premium procured by such agents. The persistency rate shall be on a pro-rata basis and rounded off to the nearest decimal where the financial year is not covered in full.