Take It Easy Policy

When Colonel S.S. Oberoi took premature retirement from the army in 1999, he had a choice: he could become an arms dealer or an insurance agent. He chose insurance since he wanted to get into a "clean business". Oberoi is now an agent for OM Kotak Mahindra Life, one of the 14 private companies that have entered the insurance sector since it was opened up in June 1999.

In the last six months, this 53-year-old has earned Rs 1.75 lakh through commissions, probably more than what he would have got as pension after retirement. And it's not just the retired queuing up to cash in on the next big employment opportunity. Fresh graduates, mid-level executives, even housewives have evinced interest in a sector that may throw up as many jobs in the near future as much-hyped businesses like call centres (which, according to Nasscom, is expected to generate 2.5 lakh jobs per year).

"There is a wave of hiring in the $8-billion-plus insurance sector and most of the demand is for agents," says Pankaj Khanna of jobstreet.com, who is besieged with calls from private companies desperate to fulfill their recruitment targets. Better still, look at the numbers. This calendar year, the insurance companies (including state-owned firms) will recruit over 2.5 lakh agents, which is an over-30 per cent increase over the existing agents' pool of eight lakh. The figure next year could be another two lakhs.

If you find these predictions a bit over the top, open the classified columns of any newspaper and you'll find a glut of ads inviting "young and dynamic" people to become insurance agents. Says Rajesh Sud, director, agency distribution, Max New York Life: "The insurance market here is seen to touch $25 billion by 2010. There is big opportunity."

It's not just private players (some of whom are taking on 2,000 to 3,000 agents a month) who're on a hiring spree. The state-owned Life Insurance Corporation (LIC) is also expanding its network—it plans to increase its pool by 25 per cent to 10 lakh before year-end. And it has got Ritu Nanda, wife of Escorts chairman Rajan Nanda and one of LIC's most successful agents with annual commission earnings of over Rs 1 crore, to feature in an ad campaign to attract people to become "their own boss".

Says Nanda: "This is a great profession. You work once and enjoy the fruits of that effort for a lifetime. No other profession gives you this edge." To compete with the privateers, who have joint ventures with foreign insurers, LIC is looking at aggressive advertising and promos to erase the "negative" image that its till-now ubiquitous agents have been saddled with. LIC is obviously scouting for suave, full-time employees rather than office clerks who traditionally doubled up as agents when it was returns time.

Clearly, the image of the insurance agent is in for a massive makeover. To begin with, they are no longer called agents by the private players. Their visiting cards introduce them as advisors or consultants. Plus, today's agent is one who's been professionally trained since the Insurance Regulatory and Development Authority insists on 100 hours of training followed by an examination. But most private players put their agents though another 50 hours of training.

The burgeoning demand for trained personnel has helped a new breed of entrepreneurs to set up training institutes across the country. At present, there are 240 private institutes, while LIC itselfs runs another 410. In the last two years, these institutes have imparted training to approximately four lakh agents.

Unlike other businesses, the cost of training (Rs 7,000 to Rs 10,000 per person) is borne by the companies. Entry barriers are low. All you need to be is an undergraduate. But most private insurers have not just restricted themselves to fresh graduates and have gone ahead and recruited former dotcommers, businessmen and bankers.For the new entrants, flexibility in timing coupled with an opportunity to earn decent commissions are two of the pluses.

Take the case of a Tata aig agent in Mumbai. Suresh Pishori left a manufaturing firm after opting for a VRS in 1996, joined the real estate business only to find that it was going through a major slump. Finally, he decided to sell insurance products in June 2001. Today he earns Rs 1 lakh a month and aims to up that to Rs 3-5 lakh a month over the next three years. (Typically, agents earn commissions that vary from 2 to 35 per cent.)

Rajesh Gadia, the 32-year-old graduate from St Xavier's college, Calcutta, faced a lot of resistance when he decided to become an agent. His family, which is in the steel business, thought the career was akin to begging. But Gadia's stint at Max New York Life has already earned him Rs 4 lakh last year, and he feels the sky is the limit when one looks at the potential. For 30-year-old Pia Chowhan, another agent with a private insurer, the challenge lies in overcoming people's mindblocks towards insurance agents. "It's difficult but it is working out for me because I have made Rs 3 lakh in commission in the first year itself."

But don't be fooled into thinking it's easy money. To be a successful agent requires hard work, making cold calls and getting rebuffed at times. One reason why the attrition rate in this business is quite high, more than what you witness in the software sector or call centres. For every 100 fresh agents, over 50 quit within a year. In fact, some companies have even witnessed unusually high annual attrition rates of 75 per cent.

"Low productivity forces many agents to leave. Therefore, in our company, we try and help them earn between Rs 25,000 and Rs 50,000 a month in the metros and between Rs 10,000 and Rs 12,000 in the non-urban areas," says Tremen Ahluwalia, chief marketing officer, OM Kotak Mahindra Life. Other firms too provide support systems to ensure their agents earn a minimum commission and don't drop out midway.

Given the high dropouts, insurance companies have become choosy. They look for people with drive and an ability to network. In some cases, they even meet the candidates' families to get an idea of their psychographic profile. Fresh graduates are, therefore, not the first choice. The average age of agents today is between 25 and 40 years with women forming a fifth of the workforce. Says Arun Tadanki, country manager of jobsite MonsterIndia.com, "It's not a career option for fresh graduates."

But while the mood is gung-ho, and there are jobs everywhere in the insurance sector, don't err in comparing this boom to the call centre explosion. The call centre business has grown by about 60 per cent and most are convinced India can become the back office for the world. "But insurance is a long-haul game and we still have to see how it lasts out," warns Tadanki.