As the competition is getting tougher day by day, private life insurers in the country almost lost 23,500 individual insurance agents in FY18 mainly due to their inability to meet targets. On the other hand, country's largest insurer life Insurance Corporation of India (lIC), however, added more than 18,000 agents into the system, according to the data available by life Insurance Council.
For the insurance sector, it is learnt that individual agents are the biggest source of distribution of insurance policies or its products. Sources, however, said that almost 55-60 per cent of the policies sold are done through the agents. "This is closely followed by banks who sell products through their respective branches," it added.
Data available from the life Insurance Council also said that the companies had 9,57,341 agents in the beginning of the year, that dropped to 9,33,857 agents by the end of the March quarter, while lIC, on the other hand, added almost 18,000 agents into the system. As a result, the overall number of individual agents dipped marginally.
lIC being the largest employer of insurance agents in the country, a large portion of it business collections, more than 70 per cent, is through the agency channels.
"The reason of the reduction in private player was primarily on account of performance issues. About 75 per cent of the total exits were attributed to either agents not being able to meet targets or to compliance issues," sources said.
As far as private insurers are concerned, some of them either sell their products through banks or some do not have their own agents. For instance, Canara HSBC OBC life Insurance is the only player that doesn't have any agents.
They sell purely through bank branches of Canara Bank, HSBC and Oriental Bank of Commerce. Aegon life Insurance did not add any new agents in the last financial year.
ICICI Prudential life Insurance Company had the maximum number of agents among private players. Their number stood at 1,51,563 at end of the March quarter, showing a 11 per cent jump year-on-year.
To ensure that agents see the insurance sector as a full-time career opportunity, the Insurance Regulatory and Development Authority of India (IRDAI), has made changes in the commission structure.
This will offer insurance agents remuneration at the rate of 40 percent of the first year premium for pure risk policies in life insurance.