TRAINING OF AGENTS TO COST MORE
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.
SOURCE:BUSINESS LINE
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