The agents of the four public sector general insurance companies have appealed to the entities for financial assistance as their livelihood has come under strain amid the COVID-19 pandemic and accompanying restrictions.
Foot soldiers, the agents market Fire, Marine, Motor and Health insurance products of the companies. They earn commissions, which in turn are proportional to the business they procure, by way of new or renewal policies, says Rapolu Sudhakar, all India president of General Insurance Agents’ Federation Integrated (GIAFI).
“Every agent is scared to venture out as the same is risky due to the pandemic conditions and [thus] no fresh business is available to them. Further, getting renewal business has also become difficult as customers are postponing renewals due to lack of funds and for various other reasons,” he said. In an appeal recently to The New India Assurance Company; United India Insurance Company; National Insurance Company; and Oriental Insurance Company for financial assistance, GIAFI said the agents procure 55 to 60% of the business of the companies.
In support, the general insurance agents cite the assistance Life Insurance of Corporation of India (LIC) is providing to its agents. In a communication recently, the LIC had said that the lockdown has restricted the movement of agents of the Corporation and they are not able to meet their customers for collection of premium and new business. This has resulted in sharp loss of the renewal commission income of the agents.
Given the situation, the life insurer approved an exclusive COVID-19 interest-free advance for agents who have completed five years with the Corporation. It announced that the maximum advance will be ₹50,000 or an amount equal to last year’s renewal commission, whichever is less. The advance, to be paid in two instalments, is to be recovered in 24 monthly instalments beginning October.
Mr. Sudhakar said the recent letter to the four companies was the second appeal GIAFI was making, with the first made in March. He said this is the time the companies should assist the agents and thus retaining them.