Compliance, governance an integral part of insurance sales: Maini

Compliance and governance is an integral part of insurance sales - Anuraag Maini, Executive VP - HR and Training, DLF Pramerica Life Insurance Co Ltd.

A couple of point as a backdrop before I answer this – one is that insurance as a product, specially life insurance products, is not bought but sold; this means that your sales force plays a very important role in the sales process and hence the success of the business. These characteristic are very different from the other industries as insurance products are, by nature, more difficult to sell than say a tooth brush or a post-paid recharge voucher which are goods one would need to buy anyway. The second element that defines the industry is that it is a very young sector, with only 10 years of existence since private players have been allowed to operate in this space; as a consequence, the industry is still trying to figure many things out, for example, the distribution model that will work, whether one should have captive sales teams or external teams, what role will online will play in the future and so on. These challenges are not there in the west; hence many products developed there are still evolving in India. So India is witnessing many experiments.

In the insurance space, people need not necessarily be experts on insurance but must have an inclination towards financial products and towards understanding the needs of the client; it requires a bit more specialization and inclination towards the product than in the FMCG industry, for example. The element of trust is crucial in insurance as the product is nothing but a promise for the future. In the occurrence of an event, there is a promise, so it is imperative that our sales people understand what they sell and sell what is needed by the client and align the two. Therefore compliance and governance plays will play an important role, going forward. And aligned to the previous point, there is a need to maintain relationship and drive for the long-terms profitability and sustainability of the business.

One of the biggest challenges faced by the insurance industry in India is the exorbitant level of attrition. This is a huge structural problem that we industry players are to blame ourselves. Typically, a front line sales person knows he or she has 20 private insurance companies to choose from, and it is not difficult to shift even if one has worked in a company for only 3 or 4 months. Again this takes us back to the maturity of the industry, there is a need for companies to stop these practices and help the industry evolve by minimizing such movement of people. <

</</div>

Focusing on hiring the right people will be the key. If the right people are on board, 50% of the job is done. In our case, we are tightening our selection process by investing in profiling people; it is costly but we believe it is important for the mid and long-term profitability. In the hiring process, background verification is important. Going forward, more and more focus on compliance and governance will be owned by the sales teams so it is essential that the people you hire are apt for this job.

Once the person is on board, induction and training in the first few weeks is crucial. Most attrition in our industry happens within the first 3 months as people who are not able to perform feel pressurized and decide to move out. As an organization, we have the obligation to provide the right knowledge and environment so that the person can perform. So focus, on first week and first month, is essential. Training starts with product training, then networks, negotiation, and then in-field training with managers. That means that even managers must be trained to train their subordinates. Training must include a combination of classroom, on-the-field training and e-learning, which has the right combination in investment, effectiveness and motivation.

Career enhancement is also a key component in the sales person’s life-cycle for motivation and retention. Define milestones in the career of the sales person, plan training interventions, so that every 3 to 4 months there is a high impact intervention. Additionally, in the sales offices there is a weekly refresher conducted by the training manager at each branch.

Another very important component is rewards. For insurance, cost of sales is a very important angle when looking at profitability of the business. In majority of the Western countries, this industry has a very high risk component with low base pay. We did not see that traditionally in India but increasingly the trend is changing. For example, last year we were the first company that took 40% of the fix component and made it variable over and above the incentive plan; basically our incentive plans are based on premium, number of policies and renewal of business. We thought this will make it difficult to attract people from the market but we have not seen any negative impact. At the end of the day, if you are a good performer your payout will show so your good performers get more incentive and the budget gets distributed more effectively.

Recognition initiatives are equally important. From celebrations at the local, national, and international levels, sales people are most motivated for the recognition they get for their efforts.

Sales people, especially in insurance, undergo a lot of stress as a result of numerous rejections in any given day. Therefore it is very important to create a high energy culture to keep them motivated

Focusing on hiring the right people will be the key. If the right people are on board, 50% of the job is done. In our case, we are tightening our selection process by investing in profiling people; it is costly but we believe it is important for the mid and long-term profitability. In the hiring process, background verification is important. Going forward, more and more focus on compliance and governance will be owned by the sales teams so it is essential that the people you hire are apt for this job.

Once the person is on board, induction and training in the first few weeks is crucial. Most attrition in our industry happens within the first 3 months as people who are not able to perform feel pressurized and decide to move out. As an organization, we have the obligation to provide the right knowledge and environment so that the person can perform. So focus, on first week and first month, is essential. Training starts with product training, then networks, negotiation, and then in-field training with managers. That means that even managers must be trained to train their subordinates. Training must include a combination of classroom, on-the-field training and e-learning, which has the right combination in investment, effectiveness and motivation.

Career enhancement is also a key component in the sales person’s life-cycle for motivation and retention. Define milestones in the career of the sales person, plan training interventions, so that every 3 to 4 months there is a high impact intervention. Additionally, in the sales offices there is a weekly refresher conducted by the training manager at each branch.

Another very important component is rewards. For insurance, cost of sales is a very important angle when looking at profitability of the business. In majority of the Western countries, this industry has a very high risk component with low base pay. We did not see that traditionally in India but increasingly the trend is changing. For example, last year we were the first company that took 40% of the fix component and made it variable over and above the incentive plan; basically our incentive plans are based on premium, number of policies and renewal of business. We thought this will make it difficult to attract people from the market but we have not seen any negative impact. At the end of the day, if you are a good performer your payout will show so your good performers get more incentive and the budget gets distributed more effectively.

Recognition initiatives are equally important. From celebrations at the local, national, and international levels, sales people are most motivated for the recognition they get for their efforts.

Sales people, especially in insurance, undergo a lot of stress as a result of numerous rejections in any given day. Therefore it is very important to create a high energy culture to keep them motivated

Strategic HR

Compliance, governance an integral part of insurance sales: Maini

Topics

Author