Reliance Life to introduce fixed salary for advisors

MDT/PTI 20 August 2012

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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