Agents attrition continues to be a major problem for the Rs.30 lakh crore life insurance industry. The Life Insurance Council (LIC) data for the first quarter of FY 2017-18 shows that the life insurance industry continues to see a decline in the number of agents
The total life agency force went down to 20.82 lakh in June 2017 from 20.88 lakh in the previous quarter; that means 5,600 agents left the industry. While the industry added 1.10 lakh agents, 1.16 lakh agents called it quits. Experts attribute this attrition to low persistency ratio and recruitment of non-serious agents.
State-owned LIC India lost around 4,000 agents in this quarter. It added around 45,000 agents while it terminated 49,000 agents in Q1 FY2017-18. However, experts believe that this attrition is good for LIC as the management is keen on reducing its expenses on inactive agents. In fact, a newspaper report says that the company will soon introduce a system to understand the longevity of an agent based on his profile. Simply put, they claim to understand if the agent will work for long term with them.
On the other hand, the private players witnessed a net attrition of 2,000 agents in April-June 2017. In fact, two life insurers - Exide Life and Kotak Mahindra Old Mutual Life lost over 6,000 agents each. However, most private insurers like Bajaj Allianz Life, HDFC Life and ICICI Prudential added agents.
Commenting on this, Manish Sangal, Chief Agency Officer, Bajaj Allianz Life Insurance, said, “Although the industry has been facing an on-going agent attrition crisis, we are not affected by it. We impart high quality training to our new agents and carry out a rigorous recruitment procedure before on boarding an agent. So far, we are able to recruit serious agents and ensure they stay with us for the long term.”
IRDAI also has been making continuous efforts to reduce the attrition of agents. Among its key initiatives are increased commission structure, reduced pass percentage, quality training and cross-selling opportunities.