Insurance companies, which do not have banks as promoters, are adopting a multi-channel distribution model rather than just relying on either bancassurance or the agent network.

For insurance companies not backed by banks (that is, the company is not promoted by a bank nor does it have a bank as a stakeholder), hiring and training have become a more critical function as the share of sales from bancassurance has gradually declined.

Also, most companies now train agents to not just sell products, but also offer financial advice to customers and recommend products based on the individual customer's needs.

One of the ways to improve the efficiency of the agency channel would be to free up agents' commissions and reward them based on their sales volumes, say company officials.

For Tata AIG Life Insurance Company, the share of sales from the agency channel has been over 67 per cent since the last two years, said Mr Vijay Sinha, Senior Vice-President, Marketing and Product Development. The agent strength is about 69,000 . This year the company has hired about 7,000 agents since April and may add 1,500-2,000 more every month.

Apart from the regular sales-based training, the company also offers need-based training. For senior advisors, the company offers a programme on the basics of financial planning.

“The emphasis is on need-based sales. There is a lot of emphasis on the idea that we are a protection provider in the financial space and not just a provider of savings product,” Mr Sinha said.

Bajaj Allianz Life Insurance Company has seen the contribution from bancassurance channel increase from 13-14 per cent in 2008 to over 25 per cent in the last financial year, said Mr A. S. Narayanan, Chief Distribution Officer, Bajaj Allianz Life Insurance.

The company has a network of 1,75,000 agents across the country. This year the plan is to add 30,000-50,000 agents.

According to Mr Narayanan, last year, the agency channel did face a lot of challenges across the industry due to regulatory changes. Therefore, though a lot of the non-serious agents opted out, it has been a good opportunity for the serious agents.

“For those agents able to sell significant volumes and do need-based selling to their customers, it is a good opportunity. The regulator too is pushing for more need-based selling,” he said.

The company is also investing on alternative channels such as Web sales and telemarketing, he added.

For Aviva Life Insurance, the share of sales from bancassurance and agents has been in the ratio of 50:50 for the last three years, as it follows a bancassurance-centric model across the world, said Mr T. R. Ramachandran, CEO and Managing Director.

The company has about 30,000-35,000 agents and will add about 7,000-10,000 more this year.

Aviva Life is also open to a tie-up by way of sale of equity stake to a bank, should such an opportunity arise, Mr Ramachandran said. Apart from the mandatory training for securing the IRDA licence, agents also undergo a programme for suitability analysis. This helps them to recommend the most apt products to their customers.

“The next step in the evolution of the agency channel would be to train them to become independent financial advisors, who can sell more than just one company's products. This is present in many parts of Asia and we would like to see it in India as well,” Mr Ramachandran said.

For Birla Sun Life Insurance Company, about 65-70 per cent of the individual life business is generated through agency force and another 15 per cent through the bancassurance channel.

Currently, the company has 1.5 lakh empanelled advisors, said Mr Mayank Bathwal, Chief Financial Officer, Head of Institutional Sales.

Training involves product and sales training, providing marketing support and adopting enhanced Customer Relationship Management tools to maximise the customer lifetime value.

Any regulatory change which can further facilitate creation of a professional, full-time agency force, is welcome, Mr Bathwal added.

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