In the
last article, we looked at cost benefit / profitability for life insurance
companies, it is an established fact that Productivity and Activity are
important parameters to reduce operational cost as it increases new business premium thus giving better ROI.
In this article we will explore productivity of Tied agency and Corporate
Agents in detail.
Share of individual policies of different channels
|
|
Private
|
LIC
|
Total
|
||||||
|
|
Individual Agents
|
Corporate Agents
|
Others
|
Individual Agents
|
Corporate Agents
|
Others
|
Individual Agents
|
Corporate Agents
|
Others
|
|
2007-08
|
59.73
|
26.97
|
13.31
|
97.99
|
1.91
|
0.1
|
88.01
|
8.44
|
3.54
|
|
2008-09
|
56.16
|
25.73
|
18.11
|
97.66
|
2.31
|
0.08
|
85.38
|
9.22
|
5.4
|
|
2009-10
|
48.42
|
35.95
|
15.62
|
98.06
|
1.91
|
0.03
|
84.66
|
11.1
|
4.24
|
|
2010-11
|
47.65
|
38.2
|
14.15
|
98.06
|
1.86
|
0.08
|
86.44
|
10.24
|
3.33
|
|
2011-12
|
48.12
|
37.72
|
14.16
|
98.1
|
1.64
|
0.26
|
88.55
|
8.53
|
2.92
|
Traditionally,
the individual tied agent were the dominant players in the market. Gradually
corporate agents have also occupied significant space in the arena (as seen
above). Insurance industry employs around 23 lakh individual advisors, bulk of
them working for LIC. Though we have seen a drop in No of Individual agents
(20% from 2009), still the channel contributes around 88% of overall business
for industry.
|
|
No of individual Agents (in lakhs)
|
|||||
|
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
|
Private
|
8.9
|
13.27
|
15.93
|
15.75
|
13.02
|
10.81
|
|
LIC
|
11.03
|
11.94
|
13.45
|
14.03
|
13.37
|
12.78
|
|
Industry
|
19.93
|
25.21
|
29.38
|
29.78
|
26.39
|
23.59
|
Source
:- IRDA
The next
data points are more shocking, the average productivity of LIC agent is 9 times
the average productivity of private insurance industry. Is this clear that
average no of individual policies sold by private insurers have been
consistently lower to LIC and have also seen a downward trend. Private insurers
have dipped from 7 policies to merely 3 policies in 2011-12. Even employee
channels are not able to maintain the same ratio of Agency for LIC. This is a
serious concern and need to be addressed immediately.
Productivity:-
|
Average No of individual policies sold by individual Agent
|
|||||
|
|
2007
|
2008
|
2009
|
2010
|
2011
|
|
Private
|
7
|
6
|
4
|
4
|
3
|
|
LIC
|
32
|
28
|
28
|
26
|
27
|
|
Industry
|
20
|
16
|
15
|
15
|
16
|
Source
:- IRDA
Similar
numbers can be seen on CA front also, where a huge decline was seen in CA
partners. (70% drop compared to 2007). The no of CA for Private industry has
been reduced to one third of 2007 level.
|
|
No of corporate Agents
|
|||||
|
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
|
Private
|
1906
|
2070
|
2091
|
2420
|
1870
|
642
|
|
LIC
|
409
|
345
|
415
|
510
|
295
|
240
|
|
Industry
|
2315
|
2415
|
2506
|
2930
|
2165
|
882
|
Source
:- IRDA
LIC has
put lot of efforts on corporate agent front also, there CA productivity is
increasing for last two years.
|
Average No of individual policies sold by CA
|
|||||
|
|
2007
|
2008
|
2009
|
2010
|
2011
|
|
Private
|
1798
|
1857
|
2289
|
1976
|
2533
|
|
LIC
|
1905
|
2190
|
1606
|
1708
|
2194
|
|
Industry
|
1815
|
1908
|
2172
|
1933
|
2474
|
The
objective of this article is to create some awareness about the scope in
improvement for private players. In coming articles I will share some of the
best practices across globe in increasing productivity.
Do share
your feedback on this
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