What ails the life insurance industry today? Well the biggest worry is lapsation. They have other worries too – like the Swarup committee report, the small ticket size, the poor public image, the lack of communication skills in the sales force…but clearly the biggest worry is lapsation.

It beats me completely as to how an industry (leaving out the boss, LIC) has not been able to do one story of successfully settling a claim! If life insurance is bought by people to protect their loved ones – is it not logical that the media should be full of stories on how they settled a claim quickly and put the family back on its feet. Well not a single story. Not yet. And I have spoken to a few life insurance companies.

The other area of regret is projection of the agent! Of course the agent is not spoken at all by any of the advertisements, barring Bajaj. This person is no paragon of virtue – the kind of stories that they can tell is amazing. Many of them specialize in ripping the client, but there are many decent folks too. Mostly it is the case of not telling the client the whole story, but the life insurance industry has never (repeat never) celebrated the ‘good’ agent. Every agent aspires for being the ‘biggest’ agent rarely (or almost never) the best agent. Even companies like Max New York Life which is more dependent on the agency force, has not (never?) spoken about how the ‘agent’ can help the customer ‘find a solution’. Really sad, and I hope somebody from Max is reading this blog :). To me the Max route of creating ‘best’ agents is itself looking good – even they are not (not yet I presume?) celebrating the good agent.

So ..what ails the industry? Poor, pathetic and inadequate communication with the end customer! So even if you have a few hundred million rupees as your advertising budget you are not creating enough of an impact. Sad.

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  1. Subra

    The agent problem you mentioned .. How much part of it is known by the “Decision makers” aka CEO’s and MD’s of companies , how tough it is to make good agents ? I am really not sure what is the issue ?

    Commision based structure , low quality training ? No proper intention of “educating custormer” ?

    What is it ?


  2. Subra,

    I have an experience to be told..I was looking to buy a basic term life insurance plan for myself. Given that I wanted to diversify my risk..I intended to buy two different plans from different vendors. (LIC and Birla Sun Life).

    In both the cases, I had real trouble explaining my requirements to the agent. They simply do not understand that I need a basic no-frills-attached term plan.

    For LIC: I have not been successfully able to buy it yet…the agent took multiple conversations and my brutal refusal to listen to anything else by term plan. After that he just vanished..may be his boss is not eager to sell term plans.

    For Birla Sun Life: I initially contacted some agent, who was on the same lines of the LIC’s agent. So I then contacted my CitiBank RM, who was intelligent enough to understand m requirement and even suggested and provided comparison on multiple term plans available.

    So what I am trying to explain is..may be the agent on which these insurance companies thrive upon are simply not educated enough to understand the clients insurance and finance requirements. Instead, all the training they are provided is along the lines of sales and marketing..and that is what should be fixed.

  3. The insurance company which shows animated sales agent – is too aggressive for its own good. After all premiums have been paid – it has the nerve to send a letter which is designed such that – you almost think you have defaulted/or you need to pay one more tranche of the premium! They have the termity to call you too. Of course a terse reply that you are complaining to IRDA does the trick!
    I have a feeling that people from the most aggressive and visible bank on business channel have been recruited at the top in this company!

  4. I never bought LIC but I know two close family members who had horrifying experience with LIC agent, in one case human agent in other’s case PolicyBazaar.com.

    I am afraid of LIC and it’s agents to say the least. 🙁

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