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9 thoughts on “Life Insurance – Is Agency channel viable? At least in the long run?

  1. Sai..well worded. These days anything in india is overdone. Indian industry should revisit agency model to come out of the mess it has created for itself. Also to change direction northwards from its current southward journey.

  2. Dear Sir,

    Having worked in the Agency model , both the Tied Agency and variable agency model for a number of years .. the problems of the salaried model are well highlighted by you above and experienced by all companies. LIC has managed it well since the base min salary of the DO is still the lowest @1.4 lacs which is almost half of what is offered by most private cos.

    The most admired agency productivity … that of Max Life is primarily sinve they follow stringent recruitment and regimented training systems. However, Rome was not built in a day.. similarly , Max also stuck to its guns on the system and persisted with their time tested model …The variable agency model .. the most successful model run by Tata AIG and AIA worldwide is a testament to the fact that the model is scalable however needs time to build just like any investment. However , most cos in India have had a short term approach to building distribution throug this model and start questioning within a year of starting the model itself.

    My suggestion is to stay invested in the model whether tied or variable .. work on skilling the people not only on recruitment but also managing agents and grooming them to become successful. The scalable AIA model is another suggestion which if tweaked to match Indian markets can be another method to follow.

    1. Ranjan i agree that Max follow stringent recruitment and regimented training but as time gone by & with competition always knocking on the doors they have also been settled with chalta hai attitude of hiring Agent. Ageny channel has always under performed. Now more so as in the industry Bancassurance is being considered as big daddy which contributes more then 50% of business.

  3. Dear Sir,

    I completely agree with you on the optimisation of resources. At the same time, i strongly believe that if we try and target a market which is tech friendly and aware of insurance solutions for them, we could reduce the requirements of many people in the chain (digitalization). Also, insurance companies should also spend effort and money in projecting insurance as a need. This will dilute the push nature of the business and when people would initiate the sale, there is a possibility agency model might also become viable in the long run.

    1. Agree that the insurance awareness can change the game, not just for agency but for the industry. But it requires long term effort and investment, and more importantly, patience

  4. Dear Sir, I don’t think insurance awareness will revive the agency channel. If it will be the case then post 2001 LIC should have lost their agency channel as awareness/ education campaign was main focus of private co.

    ” The client base” which Banca channel have is the only reason, why all top 3 private sector are doing good. They are bundling their product with insurance.

    I do agree Digitalization will act as catalyst for insurance industry & peneteration can improved but above all we need to strengthen our client base by good service, so that our persistency will improve.

    Lastly, we need to design innovative product with package or bundled.
    E.g. Product for Jet Privileged customer, Paytm, OLA, UBER, McD, Dominos, Mobile Operator, 5+ star Hotels, Thomas Cook, etc

  5. True Sai. Every insurer is giving priority for recruitment and adding numbers but are not seriously working in making them active. Ensuring the consistant and continuous performance by 90% of Agency force is also vital for survival of the channel.

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