If the system on which LIC is working is implemented, it could mean that only those who are expected to stay longer and exhibit certain characteristics would be taken into the system.
You apply for an agent recruitment examination conducted by the Insurance Institute of India. You pass the examination and join Life Insurance Corporation of India (LIC). However, even before you join them, LIC will be able to look at your profile and ascertain whether you will stay for long or not.
B Venugopal, Managing Director, LIC said: “We are working on this system and the technology will be able to identify as to how long an agent is expected to stay with the company. While we are yet to implement it, this will be helpful in determining the longevity of an agent.” He was speaking on the sidelines of the D&B Insurance Summit.
If implemented, this would mean that only those who are expected to stay longer and exhibit certain characteristics will be taken into the system. Since LIC employs the largest number of agents in India, it is to be seen how this technology is implemented at the end stage. Data from the Life Insurance Council showed that LIC had 1.12 million agents as on June 30, 2017.
In the current financial year, 45,291 individual agents were deleted from the system, while 48,953 agents were added. The life insurance industry, as a whole, had 2.08 million agents as on June 30, 2017. Agents are the biggest channel of distribution for LIC.
A handful of human resource firms in India have used data analytics to predict how long an employee will stay in the company. But it is not yet being used on a wider scale.
Agent attrition is one of the pressing issues in the insurance industry. Agents are the key source of distribution of insurance policies and about 60-65 percent of the insurance policies are sold through agents, showing that dependency on this channel is high.
Insurance Regulatory and Development Authority of India (IRDAI) had earlier reduced the pass percentage for agents in the qualifying examination from 50 percent to 35 percent. This has allowed more number of agents to enter the system.
Further, IRDAI also decided to remove minimum persistency criteria (the minimum number of policies sold by agents that have to be renewed), leaving it to the board of each life insurer to have their own norms on persistency, the insurance regulator said. Prior to this, agents were required to have a minimum persistency rate of at least 50 percent to remain in business.
There was a decrease in the number of insurance agents from FY11 till FY14. In FY12, for instance, almost 1 million life insurers quit, according to data from IRDAI’s annual reports.(News Courtesy :moneycontrol)