Ashish Vohra in Calcutta on Thursday. Picture by Kishor Roy Chowdhury
Calcutta, Jan. 23: Max Life Insurance is betting on technology to arrest the growing attrition of agents in the industry.
The company plans to put in place an application in the tablets used by the agents in 150 of its 209 offices by the end of 2014-15 to boost new business premium.
According to regulator IRDA, agents constitute about 40 per cent of the new business premium of private life insurers.
However, the steady decline in agents has been a major hurdle. In 2012-13, private insurers appointed 2.83 lakh agents and terminated 4.14 lakh.
Ashish Vohra, senior director and chief distribution officer of Max Life, said the retention of 36,000 agents employed by his firm had become a big challenge.
“The demand for insurance is not rising and the market growth is almost flat. Further, with the introduction of the new regulatory changes, the income of agents is set to decline,” he said.
The application, called “New Works System”, will enable agents to sell policies more quickly and in a more transparent manner.
“Already in those offices where the system is implemented, the new business premium has grown 25 per cent,” he said, adding it will help the company achieve an overall 12-15 per cent growth in new business premium for the current fiscal.
However, even though premium collection will grow, margins will remain under pressure.
“We foresee margins to shrink because of new regulations and norms of the IRDA, applicable from January, that puts more value to customers. But, it is hard to guess how much right now,” he said.
He further said the activity ratio, a measure of the effectiveness of the agents in writing policies, is 25-28 per cent at present.
“The premium collection has increased where the system is implemented. This means that activity ratio will certainly improve,” he said, adding that this will help the firm to retain more agents.