Insurance Regulator- IRDA has put forth several regulations to get insurance agents back in business. CNBC-TV18's Kritika Saxena and Mitra Joshi find out if these changes can ensure healthier times for the insurance sector.
The insurance industry has not been keeping well as growth has been slow with the sector witnessing mass exodus of agents since the last two years. Industry experts claim that out of 30 lakh insurance agents, only 5 lakh agents are active, the other agents are merely active on paper. Not only agents, the penetration of insurance products in the country is also low. Life Insurance products have a penetration of 2.4%. Non-life Insurance products have a penetration of 0.7%. The industry blames the poor remuneration system for this.
P Nandagopal, MD and CEO, IndiaFirst Life Insurance says, "The average agency remuneration is less than maybe Rs 5000 and that will not attract the best of talent."
Now the insurance regulator has stepped into damage control mode. The IRDA chairman has just relaxed the persistency norms to 50% from 75% for insurance agents. Persistency ratio refers to the quantum of active policyholders. The reduction means it will be easier for agents to retain their licenses and is a step towards keeping them in the industry.
To boost participation, the chairman has also proposed long-term agents can be promoted to the advisory level.
R Kannan, Former Member, IRDA adds, “If the agents also graduate to the higher platform, say Tier I and II. From Tier II he will come to Tier I, then he will be in a position to sell this kind of a sophisticated product. Finally what is it, we are looking for, we are looking for reducing the mis-selling.”
The insurance industry is definitely going through tough times. But with new regulatory reforms in the pipeline, the sector is hoping to attract a lot of agents back in the business.
Also watch the accompanying video.
Tags: IRDA, insurance, agents, P Nandagopal
The insurance industry has not been keeping well as growth has been slow with the sector witnessing mass exodus of agents since the last two years. Industry experts claim that out of 30 lakh insurance agents, only 5 lakh agents are active, the other agents are merely active on paper. Not only agents, the penetration of insurance products in the country is also low. Life Insurance products have a penetration of 2.4%. Non-life Insurance products have a penetration of 0.7%. The industry blames the poor remuneration system for this.
P Nandagopal, MD and CEO, IndiaFirst Life Insurance says, "The average agency remuneration is less than maybe Rs 5000 and that will not attract the best of talent."
Now the insurance regulator has stepped into damage control mode. The IRDA chairman has just relaxed the persistency norms to 50% from 75% for insurance agents. Persistency ratio refers to the quantum of active policyholders. The reduction means it will be easier for agents to retain their licenses and is a step towards keeping them in the industry.
To boost participation, the chairman has also proposed long-term agents can be promoted to the advisory level.
R Kannan, Former Member, IRDA adds, “If the agents also graduate to the higher platform, say Tier I and II. From Tier II he will come to Tier I, then he will be in a position to sell this kind of a sophisticated product. Finally what is it, we are looking for, we are looking for reducing the mis-selling.”
The insurance industry is definitely going through tough times. But with new regulatory reforms in the pipeline, the sector is hoping to attract a lot of agents back in the business.
Also watch the accompanying video.
Tags: IRDA, insurance, agents, P Nandagopal
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