There has been increase in the number of individuals’ agents in the life insurance sector. According to latest data from the Life Insurance Council, life insurance industry has added 24,183 agents in the period between April 1-September 30 during this financial year.
Data showed that private life insurers have added 5190 agents, Life Insurance Corporation of India (LIC) added 18,993 agents in the first two quarters of this financial year. Insurers have said that apart from the pass percentage going down, relaxation of regulatory norms have led to an overall increase in agent numbers.
The Insurance Regulatory and Development Authority of India (Irdai) has said all life insurers were required to have their own company-specific persistency criterion for renewal of individual and corporate agencies from July 1. At present, agents were required to have a 50% average persistency rate in number of policies. Persistency refers to the ability to keep renewing a customer's insurance policy, till it reaches maturity.
Agency force is the biggest channel of distribution, not just for the public sector giant LIC, but also private life insurance companies. Among the private life insurers, data showed that Reliance Life has the maximum number with 1,47,372 agents. This is followed by ICICI Prudential Life Insurance with 1,28,560 agents. Kotak Life Insurance comes third with 99,275 agents.
The life insurance industry has faced the challenge of agents leaving the profession. Data from the Life Insurance Council, the industry body for the life insurance companies, shows that companies have lost 51,278 agents in the financial year 2015-16.
Insurance Regulatory and Development Authority of India (IRDAI) in an exposure draft on remuneration for insurance agents and intermediaries has proposed higher commission for agents in the first year as also subsequent years to incentivise these distributors. Further, it has also said that insurance companies can give rewards over and above commissions.
Data shows that the public sector insurer Life Insurance Corporation of India (LIC) saw 102044 agents exit in FY16. Private life insurers, on the other hand, made an addition of 50766 agents in the last financial year.