The life insurance industry continues to face high agent attrition and this could have serious implications on servicing of policies.

According to the latest data published by the Life Insurance Council, there was a decline of more than 24,000 in the agency force in the first nine months of the current fiscal.

The 24 life insurers saw 4,98,476 agents exiting the industry and 4,73,671 agents joining.

A senior Life Insurance Corporation of India official said that his company, which is country’s largest life insurer, is on a major recruitment drive and plans to hire over two lakh agents this year.

Incidentally, according to the Life Insurance Council data, LIC has seen its agency force fall over a lakh to 10,76,835 as on December 31, 2015 against 11,78,377 as on December 31, 2014.

As of December-end 2015, the number of agents was down to 20,43,660, against 21,59,729 as of December-end 2014.

Manoj Jain, MD of Shriram Life Insurance, said the life insurance industry has seen a large number of part-time agents exiting the industry and the existing agents have become more productive. He said that insurers are also increasingly relying more on their full-time agency force and direct channels for business.

Recently, in an exposure draft on remuneration for insurance agents and intermediaries, the Insurance Regulatory and Development Authority of India (IRDAI) had proposed higher commission for agents in the first year as also subsequent years to incentivise them. Further, to plug attrition, the regulator had also said that insurance companies can give rewards over and above commissions.

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