Has the agent who sold you an insurance policy stopped calling you to remind you of premium payments? Chances are that he has lost his contract.
According to the Insurance Regulatory & Development Authority (IRDA), annual report for 2009, while life insurers added 12.89 lakh agents during 2008-09, as many as 8.72 lakh of them lost their positions – indicating a termination rate as high as 68 per cent.
This is because the agents did not meet the minimum requirements for sales.
More agents attached to private insurers lost their positions compared with those working for the state-owned Life Insurance Corp (LIC)
Private insurers appointed 9.43 lakh agents and took 6.77 lakh off the rolls, while LIC appointed 3.46 lakh of which 1.95 lakh went off.
S.B. Mathur, secretary general of Life Insurance Council (an association of life insurance companies), said there was a race to hire agents as five to seven insurers entered the market every year. Only those with perserverance succeed, he said.
“Many agents don’t even start,” he said. “I have seen MBAs and chartered accounts fail in becoming an agent while matriculates succeeding.
An insurance firm spends as much as Rs. 10,000 on training an agent. A high turnover is a big drain on resources.
As many as 91 lakh policies worth Rs 99,543 crore lapsed in 2008-09, says IRDA.
Jayaprakash R, secretary general of the Association of LIC Development Officers said every agent must bring Rs. 1 lakh in premium every year and only LIC managed to train agents to make that work better.