In India More than 10 lakh insurance agents quit the profession in fiscal 2010-11 as new rules on sale of Ulips made it unviable to remain in business.
Data compiled by IRDA for the first time on addition and deletion of agents in any year showed the number of agents leaving was about 35%, or 10.45 lakh of the total number of agents at the beginning of the year. Some % lakh odd agents left during the first half of year, when the regulator was preparing the set of norms for unit linked policies which were selling like hot cake at that time.
Another 5.4 lakh left the segment during the second half of the year, just after the regulator reduced commissions for agents and brought a host of stringent norms, including a cap on policy lapses. Some 100 odd policies vanished from the market since they were rendered ineligible under the new norms. Senior insurance officials feel the 10.45 lakh number is higher than any other year in the past.
"Over the past couple of years, almost all insurers have cut down on the number of their sales managers on their payrolls, the equivalent of development officers at Life Insurance Corporation. These grades of officers are responsible for recruiting agents. Most of them recruit new agents based on personal relationships, and a large number of agents recruited are family members who are not solely dependent on the commission they earn from insurance sale. These agents lose interest once their recruiter — the sales manager or the development officer leaves the job. They are the ones of fall off," a senior life insurance official said.
Insurers fix targets for agents on the basis of number of policies sold and premium earned for one year. And they wait for a year before they are asked to leave in case they are not able to achieve their targets. Insurers may have pared the number of sales manager last year or the year before, but insurers were waiting to find out the performance of the agents these managers recruited.
Source: ET
Data compiled by IRDA for the first time on addition and deletion of agents in any year showed the number of agents leaving was about 35%, or 10.45 lakh of the total number of agents at the beginning of the year. Some % lakh odd agents left during the first half of year, when the regulator was preparing the set of norms for unit linked policies which were selling like hot cake at that time.
Another 5.4 lakh left the segment during the second half of the year, just after the regulator reduced commissions for agents and brought a host of stringent norms, including a cap on policy lapses. Some 100 odd policies vanished from the market since they were rendered ineligible under the new norms. Senior insurance officials feel the 10.45 lakh number is higher than any other year in the past.
"Over the past couple of years, almost all insurers have cut down on the number of their sales managers on their payrolls, the equivalent of development officers at Life Insurance Corporation. These grades of officers are responsible for recruiting agents. Most of them recruit new agents based on personal relationships, and a large number of agents recruited are family members who are not solely dependent on the commission they earn from insurance sale. These agents lose interest once their recruiter — the sales manager or the development officer leaves the job. They are the ones of fall off," a senior life insurance official said.
Insurers fix targets for agents on the basis of number of policies sold and premium earned for one year. And they wait for a year before they are asked to leave in case they are not able to achieve their targets. Insurers may have pared the number of sales manager last year or the year before, but insurers were waiting to find out the performance of the agents these managers recruited.
Source: ET
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