Are we wasting money/energy on Training Insurance Agents?

Are we wasting money/energy on Training Insurance Agents?

We had predicted 50000 agency managers in life insurance companies will lose their jobs

On an average 20 agents /advisors/financial advisors working for life insurance companies report to 1 agency manager. We had predicted that changes in ULIP and reduction of commission to be paid to intermediaries will result in marginal agents to lose interest opt for cancellation of their license or selling life insurance they will be left with options compelling the insurance company to cancel their license.

Yes this has happened

Source Economic Times

As you will notice from this news time in the Economic Tunis licences of 10.45 lakh agents have been cancelled. It we take the following costs.

1. Recruitment / Selection
2. Advertisement for hiring agents
3. Executive / Managers time in selection / training of agents
4. Cost of logistics – office / conference Room.

We estimate it will add up to Rs.50000/ agent. This means money spent on 10.45 lakh agents resulting in the expenditure of 10.45 Lakh X 50000 = Rs.522500 Lakhs (Rs.5225 crores) has been wasted.

or Rs.52250 crores.

It is a big loss.

Profit Rule for Life Insurance IPO’s Is Scrapped

Profitability of the Life Insurance Companies was one of the important conditions for coming out with IPO’s. The profitability figure for some of the Insurance Co’s is:

The insurance regulator has scrapped the minimum three-year profitability clause for life insurers to float initial public offerings. This is good news for many companies that would have struggled for a long time for raising the capital.

With this move we can expect more and more life insurance companies to come out with IPO’s and this will give a good boost / growth to Life Insurance Company.