With the life insurance companies facing a challenging time, they have become more cost conscious. On a cost cutting spree, they are asking unproductive agents to go. According to the Life Insurance Council, around 3 lakh agents have left the industry in last three months.
“Life Insurance companies are going through a tough phase therefore they are bound to take action which might upset others. IRDA has also laid down strict rules and regulations to be followed by the agents. So agents have to perform better for their survival,” said S B Mathur, Secretary General, Life Insurance Council.
LIC had held an agents’ meet in January 2012 in its Gurgaon training centre, in which it had indicated that agents who are unproductive will not be able to sustain in this industry, said an agent who had attended the meet. Insurers have invested a lot of money for training the agents according to the new IRDA syllabus. So they are concerned with the output and business generated by agents. According to industry experts, insurers are also framing strict rules for assessing an agent’s performance.
Agents are the main channel of distribution for insurance products. Earlier agents could easily generate 12 clients (the minimum target to run an agency) a year but now to be eligible for higher benefits offered by insurers they have to generate almost triple the target per year. Agents are also facing a tough time to complete target and sustain their levels. “Earlier it was easy to sell insurance. But after the new syllabus and regular changes in regulations, it becomes difficult for us to grasp the changed nitty-gritty in a short span of time,” said Sandipan Kumar, IFA from Kolkata.