Taking cue from its Japanese partner Nippon Life's strategy, India'sReliance Life is introducing fixed salary for insurance advisors to reduceattrition and to further improve customer services.
The Anil Ambani-led Reliance group firm is launching the salary-based insuranceagent drive in semi-urban and rural areas.
"Yes, we are in the process to introduce a fixed income system forinsurance agents under our new format called career agent. The basic impulse isto provide a minimum fixed salary to agents in order to infuse a sense ofsecurity and professional commitment," Reliance Life Insurance Presidentand Executive Director Malay Ghosh told PTI at the company's off-site here.
The company plans to hire 5,500 career agents across 200 branches by the endthis financial year.
"We have already started recruiting career sales agents and deputing themin around 100 branches pan-India. We will give a fixed stipend to insurance agentsfor the first six months during their training tenure and help them pass thelicensing examination, before they become part of the company," Ghoshsaid.
Nippon Life Insurance, 26 per cent partner in the company, has all itsinsurance agents on its pay-roll. This fixed salary mechanism has helped theJapanese firm retain the talent pool and provide dedicated services tocustomers.
In India, insurance agents work on commission basis and have uncertain incomelevel. Hence, the industry is facing a very high attrition rate.
"We are trying to plug those gaps through our new programme and providetraining to young people with career paths. We will recruit new people on theback of fixed salary-cum-variable incentives to enable them connected with thecompany for a longer period of time," Ghosh said.
"We believe that the fixed salary-based mechanism will be a game-changerin the domestic insurance sector," Ghosh said.
Apart from recruiting career agents, Reliance Life plans to hire over 50,000insurance sales advisors on commission basis in the next seven months.
The company is eyeing to increase the number of insurance advisors to over150,000 by the end of the current financial year from around 120,000 now. Morethan 60 per cent of the company's insurance policy is sold through agents.
"We are planning to hire over 50,000 insurance agents by this fiscal-endso that net employee addition remains positive. The main objective is to expandour reach and business and increase market share," Ghosh said.
The company has over Rs 1,86,000 crore in assets under management and its largechunk is driven by agents working on commission basis.
The company recorded its first full-year net profit at Rs 373 crore in the2011-12 fiscal. It had sold over one million policies during the year,garnering a total premium of Rs 5,498 crore.
Reliance Life registered 140 per cent jump in net profit to Rs 19 crore in theApril-June quarter of the current financial year, as against Rs 8 crore in theyear-ago quarter.