Agents and Guaranteed Income Continue to Play an Essential Role in the Insurance Sector
Updated On Jan 28, 2020
Insurance companies have discovered that the central role in the insurance sector is being played by the humble agents in the business, and the customers in turn prefer guaranteed income when it comes to life insurance.
The Executive Vice-President of Future Generali India Life Insurance Co. Ltd., Subhasish Acharya shares, “We are an agent-centric firm and do a large chunk of our business through agents. India is one of the most under-insured nations and we feel that increasing the number of agents and digitally empowering them is the best way of increasing business.”
As per the records, the gross premium of late touched Rs. 5.53 trillion in India comprising of Rs. 1.51 trillion received from non-life insurance sector and Rs. 4.58 trillion received from life insurance. But, calculating premium as a percentage of GDP, the insurance penetration has reached 3.69% only.
Acharya shares that the growing number of agents will enhance the growth of the insurance sector and set better boundaries by exploring the untouched parts of the sector. In most cases, there is a single insurance company for 40 agents. So the job opportunities that can be created here can be huge, added Acharya. As of March 2019, private insurers have more than a million agents and LIC has around 1.18 million of them.
Surprisingly, LIC does new business premium worth slightly more than Rs. 60,000 Crore in comparison to private insurers at about Rs. 20,579 Crore of new business yearly.
Significantly, there is a lot of scope for expansion, as opined by Acharya, considering the low insurance density or per capita insurance premia collected in India, which was $74 in comparison to $567 globally, $2,879 in Western Europe, and $406 in China.
As estimated by an India Brand Equity Foundation study, the life insurance industry may reach up to $280 billion by 2020 from $94.48 in 2018. However, the life insurance sector will grow at rate of 12%-15% every year for coming 3-5 years.
Acharya shares, their individual customers mostly go for a guaranteed plan, so they know the amount they are required to pay and in return the expected income from it.
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