How to pursue a career as a Micro-Insurance Agent?

What is Micro-Insurance?

Micro-insurance is a category of insurance policies tailored for the economically vulnerable section of the society to insure themselves, their household and other assets at a lower premium. It is a tool to support people with low incomes and to meet their insurance needs at a lower premium. Hence, the role that micro insurance plays thus becomes inevitable. Micro-insurance business was procured largely under the group portfolio. Life Insurance Corporation of India (LIC) contributed the most both in terms of policies sold and number of micro-insurance agents. With the notification of the IRDA (Micro-insurance) Regulations 2005, by the Authority, there has been a steady growth in the design of products catering to the needs of the poor.

All types of insurance agents - individual insurance agents /corporate insurance agents or insurance brokers appointed under the regulations are entitled to sell Micro-insurance products, however a specific specie known as Micro-Insurance Agent is also promoted by IRDA to engage Non-Government and other organisation to help in spreading Micro-insurance products to the economically deprived population.

Who is a Micro-Insurance Agent?

Micro agent was a channel in the insurance industry that was developed for deeper penetration of insurance product into the rural and social sector into India. The concept of ‘micro insurance agent’ was introduced in 2005 with the object of engaging grassroots level organizations NGOs, cooperatives and SHGs, individuals who are close to and have direct engagement with a large section of the under privileged segment.

Microinsurance promises to support sustainable livelihoods of the poor. Liberalization of the insurance sector and Government Schemes has created new opportunities for Microinsurance to reach the vast majority of the poor, including those working in the informal sector.

Insurance Agents are specified organisation licenced by Insurance Regulatory and Development Authority of India, (IRDAI) to act as an intermediary between an insurance company and its clients. They are trained professionals and requires a licence and training from IRDA.

Types of Micro-Insurance Agent:

In contrast to other types of Insurance Agent (Independent and captive) Micro-Insurance Agent works in Rural and social sector and they are the key driver that facilitates popularisation and penetration of insurance product to rural and social sectors. They are also key participant and who promotes Government sponsored insurance programmes. As per the Regulations, the following entities can act as a Micro Insurance Agent

Knowledge and Skill Required:

A micro insurance agents should have good customer service skills and can provide the highest levels of service to clients. These skills include the ability to connect with locals proactively, solve their problems, customise services and provide human contact between the customer and the company. An insurance would like to Identify the right agents who can harness the full potential of the vibrant and dynamic rural markets.

Even individual like owners of kirana shop, fair-price and medical store owners, petrol pump and PCOs in rural areas are also allowed to act as specified Person and can join a Micro Insurance Agent.

At least twenty-five hours of training by the Insurers in the languages recognized by the Constitution of India is required to be conducted to all micro-insurance agents and their specified persons in the areas of insurance selling, policyholder servicing and claims administration.

Expected Employer:

It may be noted that micro insurance products can be distributed by micro insurance agents, and they cannot distribute any other insurance product.

Micro-insurance agent can be appointed by an insurer (Life, General or health) by entering into a deed of agreement, which shall clearly specify the terms and conditions of such appointment, including the duties and responsibilities of both the micro-insurance agent and the insurer. A General Insurance Company can appoint such agents for various lines of business, and it may appoint either in the Manufacturing sector and or in the Service sector.

A micro insurance agent may only work with One Life Insurance Company, one General Insurance Company, one Agriculture Insurance Company of India Ltd and with any one of the health insurance companies registered with the Authority.

Scope

Micro finance currently considered as an obligation and not an opportunity. Under the provisions of regulations, all micro insurance policies fulfills the social obligations requirements of the Insurer.

The micro insurance industry is faring very well for the past few years in India and further growth in value and volume. With an Insurable population of above 625 million life in India, Micro insurance business holds a lot of potentials to expand and develop in India. Despite all challenges, micro insurance industry offers a great scope for development in our country and that is the reason for big insurance players entering Micro Insurance Sector. India is a predominantly rural country and will continue to be so in the near future.

Typical Job Profile

Distribution of Micro-insurance Products may involve following activities:

1. Maintaining a register of all members and their dependants covered under the insurance scheme alongwith details of name, age, address, nominees and thumb impression/ signature;
2. collection of proposal forms;
3. collection of self-declaration from the member that he is in good health;
4. collection of monies for issuance of contract or remittance of premium;
5. distribution of policy documents;
6. assistance in the settlement of claims;
7. nomination; and
8. any policy administration service.

Expected Salary/Income:

The remuneration including commission shall not exceed the limits as stated below:

For Life Insurance Business:

• Single Premium policies - 10% of the single premium
• Non-single premium policies - 20% of the premium for all the years of the premium paying term

For General Insurance Business:

• 15% of the premium.

For group insurance products, the insurance company decides the commission subject to the overall limits prescribed in the Regulations.