Insurance agents, staff need a pandemic-proof policy

Insurance agents, staff need a pandemic-proof policy
Insurance agent Ravi says business has been hit by the pandemic. Photo: TA Ameerudheen

(Note: This is Onmanorama's special project that tracks the impact of lockdown on people from different strata of Kerala society. Read all the nine stories here.)

Ravi is a senior insurance agent in Kerala’s Kasaragod district. After enrolling with the Life Insurance Corporation of India (LIC) in 1993, he won many accolades for bringing in large volumes of business. Endowed with excellent networking skills, he has been selling various insurance products with consummate ease among his non-resident Indian friends, businesspersons and salaried people.

But the COVID-19 pandemic and the resultant lockdown have shattered Ravi’s business plans. He could not meet even a single new potential customer in the past two years. “Insurance agents have to pursue potential customers personally. With the pandemic, house visits have come to a halt. Now we depend on mobile phones to talk to customers, but it is not as effective as personal meetings,” says Ravi.

The COVID-19 scenario in the Middle Eastern countries and the economic slowdown there too affected Ravi’s business. “Most of my clients are non-resident Indians in my village and neighbouring areas. They are going through a difficult phase and I could not ask them to invest in insurance schemes during this tough time,” says Ravi.

The lockdown has hit the insurance agents hard because their income is dependent on the policies they sell and the commission on premium payments. Selling new policies became very tough because of the financial crisis. Agents say they cannot sell products to people who are facing an uncertain future. The economic scenario has impacted policy renewals too.

It is a double whammy for insurance agents, says All India Life Insurance Agents’ Federation’s – an independent organisation of LIC agents – national president K Ramachandran Thonnakkal. “Agents are reeling under a severe financial crisis now. Only those who are good at using technology to connect with survive now. Veteran agents who rely on traditional canvassing methods such as house visits and personal meetings have been hit hard,” he says.

In Kerala, the Life Insurance Corporation of India has close to one lakh agents while the other insurance firms account for close to 50,000 agents. Around 50 per cent of them are above 60 years.

In order to overcome the crisis situation, insurance agents have been demanding a contributory pension scheme and membership in Employees State Insurance (ESI) Scheme that will help them survive difficult situations. “Agents are the vital cogs in the growth of insurance companies but they never get their due. Agents should be given pension and ESI benefits,” says Ramachandran.

Development officers, who manage the agents in the Life Insurance Corporation, too bore the brunt of the lockdown. Many of them failed to bring in new agents on board and match their performance in the previous financial years. But what shocked them most was the LIC’s decision to terminate six Development Officers – four from Kerala and two from Tamil Nadu – for their failure to perform well in three consecutive financial years. Two of them have obtained stay orders from the courts against their termination.

LIC rules state that Development Officers who fail to bring in business proportionate to their salary and maintain a certain number of active agents under them for three consecutive appraisal years will face the axe. A Development Officer, who prefers anonymity, says the termination is unjustifiable. “It is gross injustice to the employees. The pandemic has wreaked havoc everywhere, but how can the LIC be oblivious to the market conditions? Our offices remained closed for 57 days. The company should have considered this before issuing the marching orders,” he said.

He said one of the terminated employees missed the target by a whisker. “He worked hard to meet the appraisal objective even during the pandemic. He was so close to achieving the target. The company terminated him without considering these facts,” he said.

With the markets gearing to open up, insurance agents and development officers hope they can salvage the lost business and make up for the losses in the last two years.

Ravi, the agent who was mentioned in the beginning of this story, feels that the pandemic has taught people the importance of buying insurance cover. “This increased awareness will help us get more business and make up for the losses,” he says.

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