If insurance items have been as easy as immediate noodles, how can agents mis-sell them, asks Aegon Religare Life Insurance’s Chief Company Officer
I went into the meeting with Amit Kumar Roy, Chief Agency Officer of Aegon Religare Existence Insurance coverage, prepared to grill him about the mis-marketing of insurance coverage, complicated merchandise and agent attrition. But Roy, who has worked across 11 Indian states in his 2-decade-long insurance career, turned it into a rollicking conversation, with a humorous and trus2rthy take on the profession.
Why do insurance coverage products have to be so difficult?
As my medical professional after joked, if a patient comes to you with headache, you (insurance coverage guys) really do not give him Saridon, but the chemical formula to make it. That is how mis-promoting transpires. You try to confuse the buyer and promote him a strategy that he can not afford. I feel lifestyle insurance is necessary for 2 basic things. 1, it is a provision for contingency. If you live extremely prolonged, you get assured revenue if you reside as well short, your nominees get the benefit. I actually feel that insurance must not be sold for returns at all. Though existence insurance coverage organizations manage the most assets across the world, returns tend to be very low. 2, I believe the very best characteristic of insurance coverage is that it creates compulsory savings. It is like a Chakravyuh. After you commit, you have to pay out the premium each 12 months there is no escape.
I don’;t forget how an agent offered me a policy with a ₹6,700 premium way back in 1991. In these days, the premium was massive and I couldn’t even afford it. But my father explained that I have to consider a policy and I did. I felt like Abhimanyu I received in, but couldn’t come out. Above the many years, it has become much easier to shell out the premium. I would not have saved that cash without having the policy.
Life insurance coverage is a crowded industry. What can a new entrant do that is diverse?
We program to do 2 items that are different. For 1, Aegon Religare would like to sell insurance as a simple safety merchandise. Today, a lot more and much more insurance coverage is offered to people who really don’;t need it. The truth is that daily life insurance coverage is a middle-class and lower middle-class product. Wealthy folks do not really need to have protection. Daily life insurance coverage is not a ₹50,000 premium game it must be a ₹10,000-15,000 dedication. Aegon Religare was the first to supply on the internet term ideas in the sector at a really lower premium.
I would like to have items which are as simple as Maggi noodles. Maggi was a hit since it offered at ₹2 and was so easy to make.
And 2, we are actually choosy about our agents. Generally, they join, really do not really recognize goods, and promote to their uncle, aunts and neighbours. After they meet a target, they depart. The consumer tries to get in touch with the agent, but can’t reach him. That is why so a lot of policies lapse. Policies really do not lapse due to mis-promoting. They lapse simply because the vendor also did not realize the solution. I have therefore created it mandatory that Religare agents need to have to meet their customers 4 occasions a 12 months. I inform them, “Don’t try out to uncover 25 buyers. Find 10 and service them nicely. They will continue to purchase from you.”
Eight lakh agents left insurance last fiscal, but LIC fared better. How are you tackling agent attrition?
That is also why LIC has the highest persistency ratio (the number of consumers who renew their policy). It has an 85 per cent persistency, while our quantity is about 58-59 per cent. There is no rocket science to this – if my agent stays, my client will remain. That is why we are trying to construct agent incentives based on persistency. We do not spend the complete commission upfront, we pay out component of it if the consumer renews. We also have quite sturdy publish-product sales verification. If I have sold you a policy, someone from our Mumbai office will get in touch with you and verify no matter whether you have understood the item. Even if they have a hint that you haven’t, they will stop the sale.
If you seem at our on the internet product sales, the persistency is 95 per cent. That tells you that if a buyer requirements a policy and buys it, he will not let it lapse.
Insurance promoting is not a Webpage 3 occupation. None of us will ever tell our children to go and turn out to be an insurance agent. For that reason, there is nothing at all wrong with the task becoming component-time. I hire agents only if they are graduates and commit to coming in for coaching every Saturday for 3 hrs. Agents get skilled not just on selling, but on supplying other services − how to calculate taxes, how to program the EMI and how to determine the existing worth of potential liabilities.
And I do consider agents make adequate funds. The regulator has accomplished appropriate by decreasing the program fees. Today, the item is eye-catching by itself and insurance coverage offering is significantly more viable.
(This report was published on March 30, 2014)