Insurers feel it will take minimum five month to report a rise in recruitment figures.
The new stringent syllabus is ensuring that only professionals who have an in-depth understanding of the product are allowed to sell insurance policies. Earlier any graduate could sell insurance policies after passing IRDA certification and completing forty-eight hours of training. But now IRDA is making sure that anyone who does not understand the product need for customers are is prevented from selling insurance policies.
This move of IRDA is majorly to curb miss-selling. In the first three quarters of the financial year 2011-12, more than 3 lakh active insurance agents have quit the profession. “As far as figures are concerned, these are official figures and one cannot deny the fact of agents quitting from the industry. But we at SBI have slightly increased our agents’ recruitment figures compared to previous year. The major issue for the agents is the current syllabus. Most of them are unable to cope up with the new syllabus. Also, the insurers are taking time to put in place a complete process for new training that meets the demand of the changed curriculum,” said M. N. Rao, MD & CEO, SBI Life.
Insurers are taking time to lay down a complete new process of agent training because IRDA has completely changed their product basket. Till 2009, ULIP was the major product on which high commissions were paid. These commissions have been reduced considerably. Besides commission, the ULIP products have also undergone a drastic change in product offering forcing the insurers to change their product basket.
Insurers feel that it will at least take five months for the industry to witness increase in insurance agents. Dr. P. Nandagopal, MD and CEO of IndiaFirst Life Insurance Company explained the impediment that the agents are facing in the new syllabus. He said, “It has become difficult for the agents to pass the new IRDA exam as they have to now take a practical approach to solve the questions. Earlier, it was an objective paper that the agents needed to clear. But now there are case studies where the agent has to thoughtfully answer it. Moreover, it’s also the decreased remuneration and stern new regulations that are restricting a number of them to continue their business.”
Over 10 lakh agents left the industry last year when the commissions for selling ULIP reduced drastically and they found the business less lucrative. Currently, insurers have also become strict with targets for agents being set on the basis of the number of policies sold and premium earned.