LIC markets its plans or policies through various intermediaries such as agents, corporate agents, brokers and referrals. Among these different intermediaries, the business procured through agents constitutes 99.78%, while the business procured through all the other sources is 0.22% only, which shows that the basic strength of LIC is its huge agency force. In view of this, an attempt is made, in this article, to know how far the agents of the LIC are productive. Productivity is the talk of the day, as it is a means of promoting social progress and strengthening the economic foundations of human well-being.
It shows the relationship between input and output. Productivity can be defined as the amount of output produced relative to the amount of inputs used. Hence, improvements in productivity require an increase in the ratio of outputs to inputs. An improvement in this ratio might be achieved by cutting the resources required to create a given volume of output or by increasing the output obtained from a given level of inputs.1 In service organizations, the measurement of productivity is very difficult due to the intangible nature of services. However, in the life insurance sector, productivity of agents can be measured in terms of volume and value of sales, which can be expressed in terms of the number of policies marketed as well as the total sum assured under these policies.
The insurance agents including the corporate agents are intermediaries but not defined as such in the IRDA Act. However, since agents represent the principals, i.e., the insurers, their functions are akin to intermediaries and so they are termed as intermediaries. LIC markets its plans or policies through various intermediaries such as agents, corporate agents, brokers and referrals. Among these different intermediaries, the business procured through agents constitutes 99.78%, while the business obtained from corporate agents and brokers stands at a meager 0.20% and 0.02% respectively.2 |
