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Reliance Life to introduce fixed salary for advisors

Published: 20th August 2012 02:46 PM  |   Last Updated: 20th August 2012 02:46 PM   |  A+A-

Taking cue from its Japanese partner Nippon Life's strategy, India's Reliance Life is introducing fixed salary for insurance advisors to reduce attrition and to further improve customer services.
The Anil Ambani-led Reliance group firm is launching the salary-based insurance agent drive in semi-urban and rural areas.
"Yes, we are in the process to introduce a fixed income system for insurance agents under our new format called career agent. The basic impulse is to provide a minimum fixed salary to agents in order to infuse a sense of security and professional commitment," Reliance Life Insurance President and 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 end this financial year.
"We have already started recruiting career sales agents and deputing them in around 100 branches pan-India. We will give a fixed stipend to insurance agents for the first six months during their training tenure and help them pass the licensing examination, before they become part of the company," Ghosh said.
Nippon Life Insurance, 26 per cent partner in the company, has all its insurance agents on its pay-roll. This fixed salary mechanism has helped the Japanese firm retain the talent pool and provide dedicated services to customers.
In India, insurance agents work on commission basis and have uncertain income level. Hence, the industry is facing a very high attrition rate.
"We are trying to plug those gaps through our new programme and provide training to young people with career paths. We will recruit new people on the back of fixed salary-cum-variable incentives to enable them connected with the company for a longer period of time," Ghosh said.
"We believe that the fixed salary-based mechanism will be a game-changer in the domestic insurance sector," Ghosh said.
Apart from recruiting career agents, Reliance Life plans to hire over 50,000 insurance sales advisors on commission basis in the next seven months.
The company is eyeing to increase the number of insurance advisors to over 150,000 by the end of the current financial year from around 120,000 now. More than 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-end so that net employee addition remains positive. The main objective is to expand our reach and business and increase market share," Ghosh said.
The company has over Rs 1,86,000 crore in assets under management and its large chunk is driven by agents working on commission basis.
The company recorded its first full-year net profit at Rs 373 crore in the 2011-12 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 the April-June quarter of the current financial year, as against Rs 8 crore in the year-ago quarter.

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