Productivity of the agency force is the key factor for boosting insurance sales. Agents of state-owned Life Insurance Corporation of India (LIC) are demonstrating that by outperforming their competition in the private sector.

According to the Insurance Regulatory and Development Authority (IRDA), the average number of policies sold by an agent of LIC was 29, almost 10 times that of his private sector counterpart.

That outselling has not been an aberration. It has been the trend for the last five years. LIC’s agents managed their outperformance last year too, when the life insurance business was on a slide.

What accounts for such a difference in the performance of agents selling relatively similar products?

P. Srinivasan, member of the chairman’s club of agents in LIC and president of the life insurance underwriters’ guild, explains, “The success of LIC is because they believe in direct distribution. Other companies depend on alternative channels.”

Elaborating, he said, “Only an agent, who is a family friend, can talk about death and the position of family members after death. You need to build a strong agency force that is recruited by a stable managerial force.”

According to A.K. Sahoo, Executive Director and Chief of South Central Zone of LIC, the DNA of the corporation is rooted in sales. “Right from the beginning, we are a sales driven force and accordingly put in place a system of incentives and encouragement, making agents members of different internal clubs depending on their performance,” he said.

Brand name Apart from an agent’s hard work, the trust and brand recall that goes with LIC are big advantages. Agents of private life insurers have to take pains to explain details about their company, especially in rural areas.

M.R. Kumar, an insurance advisor working for ICICI Prudential Life, agrees with this. “Sometimes, I face difficulty in trying to prove the dependability of our company. When it comes to money, trust still goes with the public sector in rural markets. The structure of incentives for agents and internal systems are more encouraging in LIC,” he adds.

LIC has an agency force of 11.72 lakh while private companies have 9.49 lakh agents working for them.

Not surprisingly, the market share of LIC had increased to 72.70 per cent during 2012-13, compared with Rs 70.68 per cent in the previous year while private life insurers’ share declined from 29.32 per cent to 27.30 per cent.



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