With a tough syllabus and lower remuneration, becoming a life insurance agent is no longer as attractive career as it used to be. This becomes evident as number of individual agents has gone down from 26.39 lakh as on 31 March, 2011 to 23.59 lakh as on 31 March 2012, a decline of 10.63%.
This means that less people are pushing customers to buy long-term insurance policies and helping the cause of financial inclusion. Typically, insurance is sold and not bought and having lesser feet on the street would imply lower ability to get customers to commit to a longer term savings and risk mitigation plan for known certainty –death.
High attrition adversely affects life insurer’s business, policy persistency and public perception of the agency channel. It is, therefore, in the interest of all the stakeholders to work on reducing the turnover of agents and built a stable and growing agency force.
While, the total number of agents appointed by life insurers during 2011-12 was 7.14 lakh, the number of agents terminated was much higher at 9.95 lakh. In effect, almost 300,000 people quit the profession in a single year. This turnover of agents was higher at private life insurers who have had lower time to establish their business compared with Life Insurance Corporation of India (LIC).
While, private life insurers appointed 3.68 lakh agents, 5.89 lakh agents were terminated, a net loss of over two lakh agents.
On the other hand, in case of LIC, 4.04 lakh agents were terminated, while it appointed 3.45 lakh.
As on 31 March 2012, number of agents with LIC stood at 12.78 lakh while it stood at 10.8 lakh for private life insurers on a cumulative basis.
Insurers say that agent examination has become more case-oriented, testing the application of knowledge to ensure that only those who can apply their knowledge are able to clear the exams.
Also, insurance companies are weeding out incapable advisors and are ensuring that only quality advisors remain on their books.
Insurers also say that there are some candidates who are not used to answering questions on a computer. Also, earlier, agent examinations were conducted manually, so impersonation and cheating were possible. But, now with the examination being online, impersonation cannot happen.
Last Year, Insurance Regulatory and Development Authority (IRDA) conducted a thorough review of the existing life insurance agent licensing qualification and decided to use the expertise of Charted Insurance Institute (CII), London in enhancing the existing IC33 “license to practice” the qualification for pre-recruitment examination for life insurance agents conducted by the Insurance Institute of India (III).
The training in the revised syllabus has commenced from first October 2011. The revised IC33 syllabus is available on IRDA website in eleven regional languages. IRDA has developed a syllabus that is challenging in its scope and depth. It does not simply encourage agents to memorize facts and figures, but also tests their understanding of learning, and ability to apply it in a wide range of practical real-life situations.
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