For the past few years, life insurance industry has been fighting a peculiar problem - agent attrition
. In FY12 alone, as many as 994,635 individual life insurers
quit, according to the annual report of Insurance Regulatory and Development Authority (Irda
However, insurance companies believe the attrition will be down by 10-15 per cent this year. Reason? The various measures taken by them to retain agents. These include better career development opportunities and additional training to impart domain knowledge, apart from better incentives and other perks.
Max Life Insurance lays emphasis on building the right set of knowledge, skills and daily work-habits, according to Ashish Vohra, senior director and chief distribution officer at Max Life Insurance. Through its Fundamental Career School (FCS), the insurer offers pre-licence training of 100 hours, even though Irda mandates only 50 hours. This is to ensure better domain knowledge, says Vohra.
Other insurers agree that training at the initial phases is crucial to retaining agency staff; remunerative salaries alone won’t do. “Hence, life insurers are introducing new rewards and recognition programmes to arrest the growth in its attrition rate at the agent level,” says a senior human resource official with a private life insurance firm.
Max Life Insurance agents
are offered, based on their performance, a bouquet of benefits through a platform created called the Star Achievers’ Club, says Vohra. These benefits include professional learning and development at various levels of their achievement.
This benefits insurers, too. Agents who utilise the learning from these training initiatives perform better than others and bring in more applications, says Vohra. “Data suggests that if an agent advisor brings in nine or more applications during the first 90 days of their joining, they will have a greater probability of success, commitment to the profession and thereby retention.”
Other insurers are not behind. Rajendra Ghag, senior executive vice-president and chief human resources officer at HDFC Life
, says the company has designed state-of-the-art technology enabled tools for self learning, business tracking, customer servicing and need-based selling. Further, they have developed profile-based value proposition for agents in terms of capability development, recognition and long-term / loyalty benefits.
Bajaj Allianz Life Insurance has an agent retention programme that has more than just customised product- and soft skills training. Subrat Mohanty, head of sales, Bajaj Allianz Life Insurance, says that under this programme, high performing agents are rendered priority services such as faster processing of proposal forms, and other customer services. “These agents have been provided an online receipting module for policy renewals which enables them to accept renewal premium at the customer’s doorstep.”
As part of their career development initiatives, agents are encouraged to have own office. Consistent performers are entitled to exclusive rewards and recognition programmes. Mohanty says Bajaj Allianz also offers insurance coverage for insurance consultants who earn a certain level of remuneration under a group insurance plan.
Recently, Reliance Life Insurance Company said it hired over 10,000 insurance advisors and would recruit another 40,000, by the end of FY13.
The company has put in place an elaborate training mechanism to for the benefit of the new recruits. Over 200 trainers and 1,000 master trainers will train and educate the new insurance agents.
Financial incentives are also an essential part of the retention process. Apart from reward mechanism, insurers are also offering stipends to attend the training sessions, so that agents take this process seriously.
“Agents’ longevity has a direct linkage to his overall remuneration. Over the past couple of years, degree of difficulty in selling life insurance has been increasing, leading to an increasing number of agents leaving the industry as they don’t find remunerations commensurate with efforts needed,” says Ghag of HDFC Life.
At Max Life, Vohra explains that the incentives for agents are linked to their monthly performance and attendance in the sessions.
Apart from internal reforms, insurers say that few initiatives from Irda could also help. According to Ghag, moving from training-plus-examination based licensing process to ‘only examination’-based process will help industry mitigate forced expense incurred on training of a large agent force, of which only 20 per cent get licensed. He says that apart from this, certain category of simplified products — such as over the counter (OTC) — should be available to any individual without the requirement of licensing and he should be allowed to sell these OTC products on the basis of insurer certification and registration.
Insurance advisory is not yet seen as a full-fledged career by today’s youth. According to Ghag, Irda should also partner insurers to build visibility of insurance advisory as long term career option. Attractive remuneration is also the need of the hour, say experts. According to Vohra, rewarding agents not only on performance but on a combined vector of performance and vintage of more than five years vintage will also help promote a long-term career vision as an insurance agent.
Recognising the problem of agent attrition, Irda has also taken some steps. It is considering a mechanism of having senior-agent system. This will provide a career path for agents. Further, Irda is also examining the introduction of a campaign to enable ex-agents to revive their licence and recommence their agency profession.
HOLDING ON TO STAFF
In FY12, 994,635 individual life insurers have quit, according to the annual report of Irda
Insurance companies believe attrition will be down 10-15% this year, as a result of measures taken to retain agents
Through its Fundamental Career School, Max Life Insurance offers pre-licence training of 100 hours
HDFC Life has designed tech-enabled tools for self learning, business tracking, customer servicing and need-based selling
Bajaj Allianz Life Insurance has an agent retention programme
Reliance Life Insurance hired over 10,000 insurance advisors and plans to recruit another 40,000 by the end of FY13