The Insurance Regulatory and Development Authority (IRDA) mandates a comprehensive due diligence process for prospective agents to maintain a fraud-free work environment. Mis-selling and premium pocketing can engender negative sentiments among customers, many of whom may not fully grasp the intricacies and benefits of insurance products.
Despite evolving technology and diverse selling channels, individual agents remain pivotal in the insurance business. IRDAI data underscores their significance, revealing that in 2020-2021, individual agents were responsible for bringing in 58% of the business for life insurers, with their contribution to new premiums escalating from Rs. 3.44 lakh crore to Rs. 3.65 lakh crore. This pattern is consistent in general insurance as well.
The future success of insurers hinges on their ability to select, appoint, and retain a large cadre of suitable and capable individuals. These agents are key not only to market and sell insurance but also to sustain and enhance their productivity over time. However, building a strong 'Agency Vertical' presents multiple challenges including attracting skilled candidates, speeding up agent training, and ensuring retention.
High Agent Turnover : Over six years, from April 2015 to March 2021, more than 38 lakh agents were appointed in the life insurance sector, but the net addition was only about 3.87 lakhs due to a high dropout rate.
Evolving Workforce Expectations: The pandemic reshaped work culture, influencing agents' expectations about how companies treat them. Aligning with organizational culture, offering development support, mentorship, and maintaining continuous engagement are now more critical than ever.
Costly Workforce Churn: When an agent departs, insurers incur significant costs in recruiting and training replacements, who often take their clientele with them, impacting the company’s financials.
Inadequate Training: Proper training is crucial as it equips new agents with necessary skills and shows the insurer's commitment to their long-term success, which can help mitigate turnover.
Streamline the Pre-onboarding Process : Ensuring a systematic and smooth onboarding process helps new agents integrate into the company culture and set proper expectations.
Enhance Training : Training should focus on helping agents better understand customer needs and offer comprehensive insurance solutions.
Continuous Support and Monitoring: Proper handholding, along with regular monitoring and reviews, are essential. Digitizing these processes can improve efficiency and effectiveness.
Job Segmentation: Differentiating job roles and tailoring training to meet diverse product knowledge and skills can cater to varied agent needs.
Ongoing Skill Development: Continuously developing agents' skills is vital for their performance and retention, fostering a more productive agency force.
By addressing these challenges head-on, HR leaders in the insurance sector can enhance the efficacy and loyalty of their agents, ultimately leading to a more robust and resilient business model.