LIC Hired 100% More Insurance Agents This Year: Find Out The Reason Why?
Increased Hiring Of Life Insurance Agent
The same is informed by Mumbai’s 42-year-old Mithilesh Gupta who had quit the insurance agency profession in January 2019.
But now he is back in the system since he was approached by a bank-led private life insurer he was working with earlier.
With this rejoining, Gupta was not only promised higher incentives but the company has also provided a laptop which he could own after serving for two years.
Gupta said, “I have experience selling online through tablets and handheld devices. Since I was anyway working in my family garment business where Coronavirus has impacted sales, it made sense to have an additional source of income,”.
Doubled Hiring During Pandemic
Supporting the same belief, Data from the Life Insurance Council for the period between April 1 and November 30 (FY21) shows that there were 106,035 agents hired by life insurance companies.
The quantum is more than double of the 46,203 agents hired during the same period last year.
Why Would This Happen?
The rise is predominantly due to the fact that customers were not fully equipped to completely buy online (without an intermediary) on one hand, according to the Industry sources.
In addition to that, the banks also started to refocus on core business amidst the COVID-19 lockdown.
According to the head of distribution at a private life insurer “Though we have three bank partners, they made it clear that the branches will used purely for banking transactions and third-party product sales will be suspended for a few months. This is true for all other banks too. Hence, life insurers hired agents to make up for the loss,”.
So far, banks contribute close to 55 percent of the annual new business premium and agents contribute about 35-40 percent.
The rest revenue comes through pure online sales through web aggregators and insurance company websites.
The insurance business was the worst hit when COVID-19 lockdown was announced on March 25.
At that time, bank branches started doing transactional banking business only and insurance sales took a backseat.
During this time, the insurance agents were responsible for helping insurers meet the new business premium targets.
The products were sold online where insurance agents acted as an intermediary for customers to buy digitally.
The new business premium of life insurers saw a 6.9 percent year-on-year (YoY) growth to Rs 22,986.10 crore in July showing the first signs of growth in FY21.
Reportedly the growth was led by insurance agents, according to the industry insiders.