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Insurance is a flourishing industry with several national and international players competing and growing at rapid rates. The period from 2010-2015 is being projected as the 'Golden Age' for the Indian insurance industry. For entrepreneurs, it's a perfect
Insurance is a flourishing industry with several national and international players competing and growing at rapid rates. The period from 2010-2015 is being projected as the 'Golden Age' for the Indian insurance industry. For entrepreneurs, it's a perfect home-based opportunity.
THE US$ 41 billion Indian life insurance industry is considered the fifth largest life insurance market and is growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. The demand for insurance is increasing due to unprecedented growth of population. Risks pertaining to different types of disasters and accidents have increased and thus, more and more people prefer to insure their lives, homes, vehicles, businesses, etc. As per the data released by the Life Insurance Council, the apex industry body of all life insurance companies in India, total premium collected increased 13 per cent to US$ 41.05 billion in calendar year 2010 from US$ 36.23 billion in 2009. The insurance sector has also shown a lot of potential in terms of business opportunity, especially as home-based business, for both men and women. Mostly, all insurance companies sell their policies via insurance agents, who earn a good amount by way of commissions and fees. Before going into details, let us know more about the history of the industry in India.
History of insurance
The Insurance Regulatory and Developmental Authority (IRDA), established in 1999, is the administrative agency of the Government of India for supervising and developing the insurance sector. It was only post 1999, with the incorporation of IRDA that private companies started emerging in the sector. The Indian insurance market had a lot of hidden potential with people getting aware of the benefits of getting themselves insured and also had the money to invest. Therefore, the IRDA felt that the time was ripe for opening gates and making way for foreign insurance companies.
Since the establishment of IRDA in 1999, there has been a tremendous increase in the number of insurance companies. Informs Rajender Sud, Director and Head Agency Distributions, Max New York Life Insurance Co Ltd, “Life Insurance in India till 2000 was synonymous with tax saving. People did not understand the need for life insurance and not much effort was made to improve customer understanding of the need for life insurance products. Year 2000 was the perfect setting for private players to enter and explode the sector with innovative products, improved service and refreshingly new distribution strategies.”
Till 1999, there was only a single player in this field. However by 2004, the number of players in Indian market had moved up to 14, which further went up to 16 by 2007 and 23 as of now. All insurances besides life insurance fall under the category of general insurance. General insurance comprises insurance of property and business against fire, burglary, etc, personal insurance such as accident and health insurance, and liability insurance, which covers legal liabilities, etc.
Ensure your returns
As per estimates, in the last 11 years, more than 22 international insurance players have made in-roads into the country. Witnessing the success of these companies, it is evident that this sector has a lot of potential for aspiring agents. Sud states, “Insurance agents are trained professionals who provide need-based financial solutions to customers on behalf of the company. They are the face of the company and are instrumental in not just the success of the company but in also creating an image of the company for a long-term relationship. Insurance agents are very helpful both to the life insurer and the policyholder. Most of the time, they are the communication channel between the two and play a very important role in selling and helping in ongoing policy servicing.”
The job offers the flexibility to operate as per the convenience and does not require capital investment to begin with. The agents do not have to invest any money and have the freedom to work as per their own timings from the comfort of home. Regarding finances, an agent can earn up to lakhs of rupees through commissions. This shows the tremendous opportunity this sector provides to make money.
The opportunities are limitless for an insurance agent. Besides being in a noble profession of providing financial security to countless unprotected and under-protected households, this line of career also provides scope for immense personal growth. Agents can also recruit more agents under them, thus supporting the social cause of employment and livelihood.
How to become an insurance agent
Insurance business is one such occupation that offers high potential for relatively inexperienced professionals to make significant income within their first year of employment. There are not many rules and regulations for becoming an agent for any insurance company. Anybody above the age of 18 years and minimum education uptil Class XII can think of making money by becoming an agent. Sud says, “There is a minimum qualification criteria and an IRDA certified examination that needs to be cleared to become an agent advisor. Although the regulations prescribe minimum educational qualification of Class XII, most of Max New York Life Agent Advisors are graduates, while some are very highly qualified.” Life insurance is not a profession for introverts, people who are too sensitive and weak willed. Insurance agents must possess a fighting spirit, be goal-oriented, thrive on challenges and should be able to handle disappointments and failures. Moreover, an individual has to obtain a licence from IRDA in response to a 50-hour training carried out by the insurance company. After training, the individual has to give an examination and score a minimum of 50 per cent to get the licence to start practicing as an agent. Adds Sud, “After the selection process, agents are trained in-house to ensure optimal control on quality of training. Each agent is trained for 100 hours as opposed to the mandatory 50 hours stipulated by the IRDA before beginning to sell in the marketplace.”
Be ready for failures too
Becoming an insurance agent can guarantee success only if you are hard working and ready to face failures. Initially, every agent can sell easily to his near and dear ones. After reaching a saturation point, he may have to face many 'no's' and see failures when his prospective clients do not buy any policy. However, in spite of all this, an agent can do well if he maintains his will power and devote more and more time to his profession.
Therefore, it would be apt to say that agency distribution in life insurance is totally built on the entrepreneurial model, where individuals who have strong networking skills, ability to understand people's needs and align products to those needs can do wonders. This entrepreneurial venture is more suitable for housewives and other home-based entrepreneurs, who have commitment, perseverance, time and a desire to work hard.
Benefits for insurance agents
Being an insurance agent, you can reap high profits in the long run. Some benefits are as follows:
Work from home, no investment: An insurance agent does not have to go to office everyday. He can work from the comfort of home any time. Moreover, he does not have to make any heavy investment.
Time flexibility: An agent does not need to put in the whole day for this. He can work for just two to three hours a day.
Work according to requirements: An agent can work in accordance with the amount of money he wants to earn. More hard work and dedication, more will be the benefits and vice versa.
Facility of part-time job: It is a perfect opportunity for people who want to earn extra income while doing their regular jobs. Investing two to three hours everyday is not a difficult task for minting money.
Profile of insurance agents
There are few profiles that the companies prefer to target. These are as follows:
Housewives: Housewives can become perfect insurance agents, as they have a wide network of friends and relatives. These women go for kitty parties, yoga, walks and other recreation and are in touch with neighbours regularly.
Students: Students with free time and a wide network of friends and families can also become agents.
Retirees: They also have friends and a lot of free time to converse with people to make them aware of the benefits of taking a life or general insurance.
Working professionals: Professionals having a wide network of colleagues and friends can become agents to make extra income.
The insurance company planning to enter India must have at least an experience of 90 years in the world.
Foreign companies were allowed ownership of up to 26 per cent only. They had to tie up with Indian companies if they wanted India expansion. Companies like ICICI Prudential Life, Max New York Life Insurance, etc have 74 per cent of Indian share while 26 per cent belongs to foreign companies like Prudential and New York Life