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Recruitment of agents could slow down as the life insurance industry switches to a new syllabus and examination pattern from October 1.
Further, the cost of training agents for insurance companies could go up.
While the new syllabus is beneficial, experts in the insurance industry said that recruitment of agents could be temporarily impacted. This could impact business development, particularly in the case of insurance companies which rely heavily on the agency channel.
The number of agents in the life insurance industry has fallen drastically after the commission for selling unit-linked insurance products was slashed in September 2010 from 15 per cent to 5-6 per cent.
The number of individual agents has gone down from 29.78 lakh in 2009-10 to 26.47 lakh in 2010-11, according to the Life Insurance Council.
The insurance regulator has asked the insurers to implement the new syllabus in September but the latter requested for some time. On September 9, the regulator had a meeting with the representatives of life insurance companies and agency training institutes to discuss the modalities of the implementation of the new syllabus from October 1.
One of the concerns raised by the agency training institutes was that training under the new syllabus will take up to 70 hours, which is longer than the mandated training of 50 hours.
Insurance companies expressed reservations that if the training hours go up then the costs that they will have to bear will also go up substantially.
“For us, our agency force is the backbone of our distribution network. Let us see how the new syllabus unfolds. Hiring of new agents is likely to be impacted for some time till we come to terms with the nature and content of the programme,” said Mr Deepak Sood, CEO and Managing Director, Future Generali Life Insurance.
The new syllabus will have chapters such as “Fact Find” — a tool to help understand customers financial goals and facilitate need-based selling — and also a chapter on other financial products to enable the agents to truly understand what they are selling, said Mr Vijay Sinha, Senior Vice-President, (Product Development and Marketing), Tata AIG Life.
“We have to give our prospective agents training under the new syllabus. The regulator wants to professionalise the agents so that they understand the consumer needs better,” said Mr R.R. Dash, Zonal Manager (Western Zone).
The State-run life insurance behemoth, Life Insurance Corporation, is planning to add 30,000 agents in its Western Zone, he added.
The new syllabus is very hands-on and interesting compared to the present syllabus, which is very theoretical, said Mr S.K. Sinha, Head, Agency Channel, Star Union Dai Chi Life Insurance.
“Our training institute itself will take some time in developing the content as we do not have an in-house agents training programme,” added Mr Sinha.
Star Union Dai Chi Life Insurance has 750 agents and is looking to add 5,000 agents this year.
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