Employee Satisfaction of Insurance Agents: Empirical Evidences

By Das, Sudhir Chandra; Agrawal, Anuj | Review of Management, December 2012 | Go to article overview

Employee Satisfaction of Insurance Agents: Empirical Evidences


Das, Sudhir Chandra, Agrawal, Anuj, Review of Management


Introduction

Insurance is as old as civilization (Mishra, 1991). The origin of the word "Insurance Agent" is parallel to the insurance. Nobody can imagine the existence of insurance 'without insurance agent' in any form or the other, in past and even today. For operating business, insurance companies open their offices and branches in different states and cities. However, no one is about to come himself/ herself to purchase the insurance product. Insurance agents need go to the people personally and make them initiate and understand about the product and persuade them to buy the insurance product. That's why insurance strictly involves personal selling activities.

This has given birth to insurance agent or insurance advisors in insurance business. Insurance agents are the life blood of insurance business (Singhvi, 2006). Insurance agents are the person who makes the people aware with the need and necessity of insurance product. Generally they are very close to the prospect and they are such type of specialist of financial field, that they takes no time to access the financial and future needs of the prospect. According to the size, structure of the family, business and profession, and the intensity of risk on the life of the prospect they are able to suggest right insurance product to the prospect which match the future needs as well as the present financial position of the prospect. If they able to convert the prospect into the client they not only secure the future of their client but also they become the motivator for their client for the habit of regular and long term saving in their life which ultimately converts into a great benefit for their client after a long time when he is alive.

We have no word to praise insurance agents for the role they play in the life of their client. Not only this but also they give a praiseworthy contribution in the growth & development of the country by inspiring small savings which ultimately converts into a large sum of capital for the industry, infrastructure, and protection of the country. In lieu of such a great work they get remuneration from the insurance companies. Their remuneration is simply known as commission which depends on the sum of money they collect from the policyholders. For decades, agency was the only distribution channel for life insurance in India. Even today, when so many alternatives of agents have emerged still this channel is ruling the roost in life insurance in India (Singhvi, 2006). The reputation and sales of insurance company often hinge upon the image, agents portray and the services they render (Cliffs, 1974). Public as well as private players of insurance in India are getting a significance share of their total business through the help of this channel.

At the time of nationalization, there were three categories of agents designated as 'Chief Agents', 'Special Agents' and 'Agents' all of whom worked on commission basis. With the promulgation of LIC Act, 1956, all the contracts subsisting between insurers and their chief or special agents and between chief agents and special agents were terminated in accordance with the provisions of section 36 of the Act (Malhotra Committee Report, 1994). The agency structure in the Indian insurance market has been changed drastically after passing IDRA Act 1999. Through this Act Insurance Regulatory & Development Authority of India promulgated IRDA (Licensing of Insurance Agents) Regulations-2000 and has laid down the following stipulations for a person to be considered eligible for appointment as an agent:

* A person should have attended the age of maturity and should be capable of entering into a contract under the provisions of the Indian contract Act.

* The person should not have suffered disqualifications like fraud, breach of trust, forgery, misrepresentation, cheating or similar offences, or any other disqualifications described under the Indian insurance Act.

* The person should have passed the 10t standard or its equivalent for those residing and working in rural areas and the 12th standard or equivalent for others. …

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