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After seven years, the Rs.49 lakh crore life insurance industry has faced issue of agent attrition this year. The industry has lost close to 50,000 individual agents in the last one year.
Over 48,300 agents in India have left distribution of life insurance policies in just a year, shows data collated from Life Insurance Council (LIC). LIC is a trade body of life insurance industry. The total number of insurance agents went down to 24.02 lakh in January 2022 from 24.50 lakh in January 2021.
While the private life insurers have witnessed attrition of over 38,000 agents, LIC lost close to 10,000 agents in a year. However, LIC has more individual agents than all private life insurers put together. As on January 2022, LIC has 13.28 lakh agents, the corresponding number for private insurers was 10.74 lakh.
The industry added over 2 lakh new agents between January 2020 and January 2021 despite the pandemic where many people couldn't appear for examination due to lockdown restrictions.
The decline in agents was due to low persistency ratio and recruitment of non-serious individuals, believe experts. “A few agents find it difficult to retain their clients after the initial years. As a result, the commission income reduces due to low persistency ratio,” said the senior official of a large insurer. He further says that some private insurance companies often recruit unskilled people to achieve their internal targets. Such agents, after acquiring a few clients from their family and friends circle, usually leave the profession, he added.
