Less than 1% agents qualify for the million-dollar round table (MDRT) in India, which is among the lowest in the Asia.
In fact, number of MDRT agents in India has not seen a significant change in the past decade i.e. between 2008 to 2017, said a report by PricewaterhouseCoopers and the Confederation of Indian Industry titled ‘Assisted distribution: Changing the face of insurance sales’.
MDRT membership is recognized internationally as the standard of sales excellence in the insurance sector. In India, insurance agents who have generated first year commission of at least Rs.9.98 lakh from life insurance policies can qualify for MDRT. Agents having non-life business can also qualify for MDRT, however, at least 50% of the Rs.9.98 lakh has to come from life insurance policies.
Even though India has around 21 lakh agents as on 2017, a mere 2100 qualified for MDRT in 2017.
The report attributed this to productivity issue and complexity of the product. “Individual agents form a major part of insurance sellers in India. However, their productivity has been a huge concern for the insurance sector. Productivity of agents in India remains less than their Asian counterparts mainly due to lack of information, poor time management and insurance sales being regarded as a secondary source of income. This hampers agents’ ability to reach out to more customers, leading to frustration and low sales and productivity. This low productivity is often reflected in higher time spent per meeting, low sales conversion rates and smaller ticket size,” said the report.
Further, due to insurance product’s long term nature and complex features, sellers perceive them to be more complex than other financial products, said the report.
Another reason for this low number of qualified agents is that insurance agency has become a less preferred career option for most of the millennials in the age of startups and self-employment. The report pointed out that despite multiple opportunities in terms of job security, income viability, growth and learning, there has been no major increase in the motivation of job aspirants for insurance agents. In fact, the number of independent insurance agents has dropped from 21.22 lakh in 2012-13 to 20.83 lakh in 2017-18.
With 16% of its agency population qualifying for MDRT, Hong Kong was the top Asian country in 2017. In 2008, 7% of its agency population qualified for MDRT. Hong Kong was followed by Singapore and the Philippines whose MDRT insurance agents rose to nearly 8% and 4% respectively, said the report.
Singapore and Philippines followed Hong Kong for second and third spot in Asian market.
