Bajaj Allianz Life Insurance Company plans to double its ‘active’ agency force to about 60,000 agents this fiscal, its Managing Director and Chief Executive Officer Anuj Agarwal said.
Currently, about 28 per cent of its 1.10 lakh agents are ‘active’ — defined as those who are able to sell at least one policy every month. Bajaj Allianz Life earns about 45 per cent of its premium income through the agency channel.
Asked about churn in the agency force, Agarwal admitted that it was a challenge. He said the present commission structure (which allows for a substantial first year commission of around 30 per cent followed by 5 per cent in the second year and thereafter) contributed to a situation where the agent was more interested in new business rather than renewing the earlier business.
In order to address this skew, Bajaj Allianz Life has built in a criteria that a portion of the income of the sales manager (who handles the agents) will be based on the renewals of insurance policies done during the year.
This year, that system is being introduced to two more levels above the sales manager so that the entire sales force is aligned to the philosophy of earning more through renewals, Agarwal said.
New business upThe company’s new business premium grew 4 per cent to ₹2,702 crore in 2014-15 despite losing a key banking partner, Agarwal said. The company’s renewal premium rose marginally to ₹3,315 crore in 2014-15 from ₹3,215 crore in the previous fiscal.
Agarwal said that he expected both these parameters (new business as well as renewal) to show a substantial improvement in the current fiscal, although he declined to give a specific target. He drew attention to the improvement in the persistency parameters (the 13{+t}{+h} month persistency of its products had risen to 67 per cent in FY15 compared to 61 per cent in the previous fiscal).
The company had reported a net profit of ₹876 crore, down 15 per cent in 2014-15.