Insurance
Reliance Life to introduce fixed salary for advisors

The Anil Ambani-led Reliance Life is launching the salary-based insurance agent drive in semi-urban and rural areas

 
Bangkok: 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, reports PTI.
 
The Anil Ambani-led Reliance group company 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.
 
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% 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 1.5 lakh by the end of the current financial year from around 1.2 lakh now. More than 60% 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 Rs1.86 lakh 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 Rs373 crore in the 2011-12 fiscal. It had sold over one million policies during the year, garnering a total premium of Rs5,498 crore.
 
Reliance Life registered 140% jump in net profit to Rs19 crore in the April-June quarter of the current financial year, as against Rs8 crore in the year-ago quarter.
 

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COMMENTS

Sabapathy Narayanan

4 years ago

Welcome trend!
All the Insurance companies should follow this type of Career Agents Path to enable to reduce the attrition rate.
Sabapathy Narayanan

EPFO considering minimum pension of Rs1,000 per month

The Labour Ministry has sent a proposal to the Finance Ministry to fix minimum pension of EPFO subscribers at Rs1,000 per month, irrespective of their contribution towards the scheme

New Delhi: Subscribers of the retirement fund body Employees Provident Fund Organisation (EPFO) may soon get a minimum monthly pension of Rs1,000 after superannuation, if a proposal in this regard is cleared by the Finance Ministry, reports PTI.

 

"Labour Ministry has recently sent a proposal to the Finance Ministry to fix minimum pension to the EPFO subscribers at Rs1,000, no matter what their contribution is towards the scheme," a source privy to the development said.

 

On the recommendations of the EPFO, the Labour Ministry has proposed to the Finance Ministry to either withdraw the two year bonus given to subscribers on completion of 20 years of service or bear additional burden of Rs539 crore every year for fixing minimum pension of Rs1,000.

 

At present every subscribers who completes 20 years of service is given benefit of additional two year bonus while tabulating his or her pension.

 

According the the EPFO, if this two year bonus is withdrawn, the exercise of fixing minimum pension at Rs1,000 would be a revenue neutral exercise besides pensioners getting about 5% relief.

 

However, if the Finance Ministry does not go for this alternative, the government would have to shell out Rs539 crore every year in addition to its existing payout of Rs994 crore annually for contributing 1.16% of basic pay and DA to the pension fund.

 

According to data, as on March 2010, there were 35 lakh EPFO pensioners of which 14 lakh get a monthly pension of less than Rs500.

 

The number of EPFO pensioners getting a monthly pension of Rs1,000 is seven lakh. The data reveals there are cases where pensioners are getting a monthly pension as low as Rs12 and Rs38.

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About 10 lakh bank employees to go on strike on 22-23 August

Employees from around 47 banks are planning to go on a two-day strike on 22nd-23rd August to protest the proposed reforms in the banking sector and outsourcing of jobs

 
Around 10 lakh bank employees and officers working in 27 public sector banks including State Bank of India (SBI) and 12 old generation private sector banks and eight foreign banks will resort to two days nationwide strike on 22nd and 23rd August, says United Forum of Bank Unions (UFBU). UFBU is the umbrella organisation of five employee unions and four officer unions of state-run banks in the country.
 
The Chief Labour Commissioner has called the bank union on 21st August for a conciliation meeting on strike notice, the statement added.
 
The UFBU said it is against the proposed banking sector reforms, unilateral imposition of the Khandelwal committee report and want appointment on compassionate ground. 
 
"The banking reform measures are retrograde but the government is still pursing the same and hence our protest," the statement said.
 
The Banking Laws Amendment Bill, 2011, which is before Parliament, contains provisions such as raising of shareholders' voting rights from 10% to 26% in private banks and suppression of bank boards.
 
There are about 87,000 branches of public sector banks across the country. The state-owned lenders control about 75% banking business.
 
UFBU is opposed to recommendations of the Khandelwal Committee which was appointed by Central Government to suggest changes in Human Resource policies in the banks. Here are the points raised by the UFBU...
   
1. From 1950s, we have common wages and service conditions.  Now, this committee has recommended Bank specific wage structure based on profitability, productivity etc.
2. All these years we have uniform wage and service conditions.  Now, the committee wants introduction of fixed and variable pay concept.  A portion of wage will be fixed and balance will vary according to performance.  This is impracticable in the banking sector and will result in division of employees and promote sycophancy.
3. The committee has also recommended that settlements with unions on transfer of employees to be reviewed and to give free hand to the managements to transfer employees from place to place.
4. The Committee has suggested 50% of officer vacancies should be filled directly from the market instead of promoting clerks.  This will seriously affect the career of employees.
5. The report says that minimum qualification for appointing a clerk should be graduation.  All these years, matriculates are eligible to join the Banks.  Now, lakhs and lakhs of such unemployed youth will be deprived the opportunity.
6. Similarly, so far, the qualification to join the banks as peon / class IV employee is 8th Standard failed.  The committee says that it should be matriculation.  This is also absurd.
7. The Report says that Banks should not make any appointments in the urban areas but workload in the banks warrants the same.
8. The committee has suggested outsourcing of all the regular bank jobs which is unfair labour practice.  
 
"All these measures are anti-employee and anti-trade union and they are targeted to attack collective bargaining. Further overlooking the settlement the Government is giving unilateral guidelines on various service conditions. UFBU is opposed to such unilateralism," the bank unions have said.
 
UFBU would held massive rallies in all district places and cities across the country. "In Mumbai there will be rally at the Azad Maidan on 22nd and 23rd August, said Vishwas Utagi, general secretary, All India Bank Employees Association (AIBEA). 
 

Nine unions, All India Bank Employees Association (AIBEA), All India Bank Officers Confederation (AIBOC), National Confederation Of Bank Employees (NCBE), All India Bank Officers Association (AIBOA), Bank Employees Federation Of India (BEFI), Indian National Bank Employees Federation (INBEF), Indian National Bank Officers Congress (INBOC), National Organisation Of Bank Workers (NOBW) and National Organisation Of Bank Officers (NOBO) have given the call for strike under the UBFU umbrella.

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