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Tuesday, August 11, 2009

LIC not to sack non-performing agents for first three years

Life insurance behemoth Life Insurance Corporation (LIC), now revamping its marketing strategies to regain its lost market share, has decided not to sack any agents for the first three years despite non-performance.

Currently, the corporation has 14 lakh agents and is planning to increase the agency force by 20% by the end of this fiscal. Confirming the development, LIC managing director DK Mehrotra said the corporation has amended its Agents' Rule 1972 to bring about the change.

"The new norms have come in to effect since August 1. Agents can't be terminated even if they are unable to achieve their target on completion of one year. An agent is normally asked to cover at least 12 lives and collect the first year premium of Rs 1 lakh in one year. But, now we are asking them to cover 36 lives and collect Rs 3 lakh in 3 years. Now we want to nurture the agents and give them time to grow. An agent would not terminated because of non-performance for the first three years. We would provide all kinds support him for three years,'' he told FE in an exclusive interview.

The corporation has regained 10% of its market share in the first quarter of 2009-10 in terms of first premium income.

Mehrotra also said the corporation is looking to double its agency force within the next five years.

The corporation also has opened direct marketing channel where any customer can pay their premium.

"We choose senior business associates among the development officers who work on 3% cost ratio and expense to the income. We have got a total of 24,000 development officers on our fold. They can open their own office. 400 have already signed an agreement with us for such an arrangement,'' he said.

The corporation is also appointing direct selling executives (DSE) to work on fixed monthly salary The idea is to tap high-end customers who cannot b bothered to visit the branches, but were willing to buy an insurance policy from the LIC .

DSEs will contact them directly and collect the premium from them at their doorstep. The scheme, which was kicked off on August 1, is at an experiment stage, and the corporation will scale it up after getting the requisite experience.

"These special category agents are being imparted special trainings before making them full-fledged agents. So far, 170 such agents have already been appointed by us in this way. These agents will be put on contract for three years,'' he said.

source: Indian Express Finance

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