Mr Muruganandam, Director, Vivekananda Nilayam, Pudukottai, Tamil Nadu

A quiet revolution in the rural areas of our country is transforming the
lives of the masses. India is defined by her rural population and her real progress can be only through their betterment.
Democracy, equality, opportunity, health and economic wellbeing are the key factors that make up this picture of progress. Bogged down by cultural and casteist politics, the farmer, the weaver and the fisherman have historically struggled to rise and let the country shine. Among the many revolutions
that are aiding the rise of the masses
is microinsurance.
Microinsurance offers an innovative new way to fight poverty by helping the rural poor systematically manage financial risks to their livelihoods and lives. Microinsurance represents an untapped market of nearly Rs 200 crore in India alone, according to a new study released by the United Nations Development Programme (UNDP.)
According to the study, the rural poor not only want insurance to be affordable, but also to protect against high-frequency risks such as serious ill health, accidents, harvest failure and fire.

NGOs and Microinsurance
Non governmental organisations (NGOs) and Self Help Groups (SHGs) are the best delivery model for microinsurance. Many of these outfits already have a deep reach into rural pockets. Microfinance is already being practiced and microinsurance is the next step.

Vivekananda Nilayam
Among the successful NGOs that have microinsurance as a very important mandate is the Vivekananda Nilayam in Pattukottai Taluk in southern Tamil Nadu. The organisation has been working in
the field of community development
since 1981.
Says Mr C Muruganandam, Director of the NGO, “The hamlet of Sethubhava Chatiram, in Madukur Village near Pattukottai town in Thanjavur district where we have our base, was a
very backward area when my father, the Late Mr P S Chidambaram, started this NGO to help the village folk with their most basic needs.”
In 1981, the place was plagued with malaria, there were no facilities for children or senior citizens and bonded labour was rampant. The people had no other skill other than agriculture.
They were not literate and were in the clutches of unscrupulous parties for buying seeds and basic agricultural resources. Many were landless labourers toiling for a few wealthy and exploitative landlords.
Initially, the NGO started working with these people in the fields of health and hygiene. They also helped them with the government eligibilities and benefits. Gaining trust among them, they introduced the concept of microfinance in partnership with the HDFC group. Gradually the community prospered and spread its wings to fisheries, plying boats, rope making and crab farming.
Progressive people
The NGO has also been successful in curbing and preventing HIV AIDS, anaemia and cervical cancer leading to the transformation of a backward community into one that is healthy and wealthy today. As a result 28 years later, today their children are going abroad for higher education, marrying into well placed families and, more importantly, they are responsible spenders with well run families.
Today, there are over a thousand self help groups (SHGs,) many of them magalir (women) groups who have been
given training in skills and accounts maintenance. This includes cottage industries like dairy farming.
Interestingly, out of the thousand SHGs only about 60 are run by men and all the others by women. As a result, the community boasts of confident and self supporting women folk. Apart from these, there are also a number of children’s homes taking care of the upbringing and education of destitute children.
The need for insurance
Any economic development has to address the question of risk cover and management. Among the group finance beneficiaries, when any member of the group was unable to repay his or her share of the loan, there was some amount of bitterness; the group would get disturbed and there would be an unnecessary rift among the members. Sometimes after taking a loan, the husband would die leaving the wife and children orphaned with no means to pay back the loan or start something for themselves. The only logical solution seemed to be insurance.
When the NGO talked to the community about insurance cover for their loans, as expected there were a number of the usual objections – ‘We are living a hand to mouth existence, where is the question of putting away money for insurance?’, ‘Paying back the loan itself is going to be a struggle,’ ‘Why should we think of death while we are still alive, it is inauspicious.’
The NGO countered these arguments by introducing the concept of microinsurance. “We told the community, ‘Don’t take the premium money out of your pockets. Set aside a minimum amount from your profits earned by your group.’ Slowly the people realised the benefits of insurance when conditions to their industry were unfavourable and they faced losses. The members of the groups were supportive of each other and readily came forward to bail out a member facing a sudden loss,” says Mr Muruganandam.
The best policies!
The NGO tied up with Life Insurance Corporation of India (LIC) and sold microinsurance products to the SHGs. The mindset was also changed by the many insurance camps conducted by private and public sector insurance companies. However, the community decided to deal with LIC because psychologically they felt they could rely on a Government body.
One of the two best selling microinsurance policies was Jeevan Madhur – A micro-insurance policy that provides social security to underprivileged people at a minimum premium of 25 rupees payable on a weekly basis for a life cover ranging from 5,000 rupees up to 30,000 rupees. The other was Jeevan Mangal – a term assurance plan with return of premiums on maturity. “Jeevan Mangal” – the microinsurance product is customised to cater to the distinct needs of the most vulnerable low income sections of Indian population. With an installment premium of as little as Rs 15!
Showing by example
“We have shown by example the benefits of insurance. Whenever there is bereavement in a family we are the first ones to be there to offer our condolences, and start the formalities for claims settlement.
Once we helped with the death claim benefits of a family, where both parents had died leaving behind a young son and daughter. Their chithi (mother’s younger sister) deposited the claim money in a fixed deposit which came in handy for the boy’s education and the girl’s marriage. This opened the eyes of the community to the benefits of insurance,” recounts Mr Muruganandam.
Assured by insurance
Today, the people of the community normally take a five year policy which can fetch them Rs one to two lakh on maturity which will be useful for major events in the family.
“The very same community that found it ‘difficult’ to put away even Rs 10 per month as savings has comfortably slipped into the habit of saving for paying their insurance premiums. We have about 5,000 policies ranging from Rs 5,000 to Rs 15,000 sum assured,” Mr Muruganandam says.
Microinsurance certainly seems the way forward for the down trodden rural pockets of India and the work of NGOs like Vivekananda Nilayam is commendable. The future of the country is insured if its people are insured!
Rangashree Srinivas

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One of the important values that Million Dollar Round Table (MDRT,) the US based international association of top performing insurance advisors, emphasises is this: ‘give back to the system.’

And that is what some leading insurance agents in India are doing.

Mr R K Shetty, 4 Divisional Vice President, Membership and Communication Division, MDRT

MDRT Club works for creating awareness among insurance agents about professional development and acquiring professional qualifications like MDRT membership.

Having learnt how to excel at their profession and having moved with  leading professionals from around the world, they now deem it their turn to help those who aspire to that professional standing.

For the sixth year this year they are organising an event called ‘MDRT Day.’ It is not just one day, but four MDRT Days at four venues across the country designed to show agents and advisors that they too can belong to this exclusive club, and giving them pointers on how to achieve it.

The core group driving the activities of this club includes Mr R K Shetty, Divisional Vice President, Membership and Communication Division, MDRT,

Mr Anand Jathan, Zone Chair, Zone IV MDRT

Mr Anand Jathan, Zone Chair, Zone IV MDRT (India, Pakistan and Bangladesh,) Mr Rohit Dhanani, Mr Sunil Sohoni, Mr Rajesh Satoskar and Mr K Ravi Kumar, all agents of Life Insurance Corporation of India based at Mumbai and the senior agent, Mr Brijbhooshan Chandoke from Kalyan near Mumbai.

2010 MDRT Days are to be held in February 2010.  The story of its organisation, however, is a pointer to the strategy of increasing MDRT awareness and membership in India.

Though the MDRT Club has been around for over ten years, the activity levels started picking up only in the last few years.

Understandably, the industry has been energised after the entry of competition which increased the level of awareness and visibility of insurance. This, in turn, created a focus on the quality and professionalism of the insurance agent, a good fit for the MDRT message.

Mr Brijbhooshan Chandoke, Agent, LIC, Thane, Mumbai

Qualifying for MDRT by commission means that an agent has to earn about Rs 7 lakh during the relevant calendar year. After that he has to pay a membership fee and actually become a member of the association to participate in its activities, the main one being the Annual Meet held in June, usually in the US or Canada.

India has been blazing trails in MDRT in the recent years. It is the fastest growing member country with almost 3,500 members in Table 2009 (for which they qualified in 2008.)

Actually, there were many, many more qualifiers who did not become members.  The estimate is that only one out of four or five qualifiers became members. That is, there were 10,000 or more qualifiers who did not take up membership.

Even more amazing is the fact that out of 30 lakh agents only a small fraction has qualified.

Which are all the same reasons why MDRT Club is getting very active. Earlier messages given by Mr R K Shetty in Premium underlined his conviction that India, on its own, could be the country with the largest number of MDRT members. It is with that potential and objective in mind that MDRT Club’s activities, including MDRT Days, are planned.

“We want to promote MDRT in India and show those people who cannot afford to become members or travel to the US the same air of excitement as prevailing there,” says Mr Shetty. The significant thing here is that even those who are not MDRT qualifiers can attend the meeting.

The idea, he says, is to announce, “Come and see how agents can organise meetings.” There will be thrilling and high profile speakers, participants can rub shoulders with qualifiers and top performers. Such meetings will boost their ego and motivate them, he lists.

The problem, Mr Shetty says, is that many people have heard of MDRT but don’t know exactly what it is. They picture it as this very big organisation of top class people, best of the best and so on.

Mr Rohit Dhanani 4 Agent, LIC, Mumbai

But, in India we have 30 lakh agents. They have heard of MDRT and know something about it. Many of them try to qualify and, many times, they fail.

“Our job through MDRT Day is to give them the right inputs on the most effective way of working. Tell them the small, small things they have to do to get the qualifying business,” he says.

Qualifying is nothing but a mindset, he says, sharing that many agents were intimidated by the idea and feel that only a top few can do it, and that it is ‘not my cup of tea.’

“We are arranging these meetings so that I and other qualifiers can tell them, “If  I can do it, you can do it too.”

And what is more, he asserts, if you do it once you can do it every year. As he said before – It is the mindset. The mindset to stay focused.

MDRT Days is being fashioned as a showcase for the MDRT experience not only for agents and advisors but also for sales managers and development officers and other senior managers who have heard much and would like to get a feel of a meeting along the lines of the MDRT Annual Meet.

“The purpose of qualifying is twofold. It is personal and professional growth, and also elevates the agents to international status” points out Mr Anand Jathan.

He too observes that the common perception among Indian agents is that MDRT is, ‘not for us, it is only for high flyers.’

This phobia is there at the back of their minds, he says and the purpose of MDRT Days is to demonstrate that it is for everybody. “Once you rub shoulders with the best of the people in your profession, you get more sales ideas and your motivation levels are high,” he says. And, he assures, “ you will go to the next level of performance and income!”

It is all tied up to a theme of MDRT – If it is to be, it is up to me  - Mr Jathan says. The advisors have to think, if I have to do better, sell more, qualify for MDRT, “mujhe kya karna hai?”

They have to think whether they have to join this kind of exclusive club, whether they should elevate their professional status or remain the same.

He also rings a warning bell. “Things are changing, if the Swarup committee recommendations are enforced, what are the advisors going to do? They have to think and plan for that future where they can charge a fee for their advice from their customers.

The theme for this year’s MDRT Days is ‘Times have Changed. Make a Footprint.’ Mr Jathan says it is very timely and urges advisors saying, “If you have not made a footprint in your profession, how will you convince your customers? You should be in a position to charge your customers a consultation fee! They should feel they cannot survive without you!”

That is not an easy challenge to take up. The financial world is changing and business has gone beyond the boundaries of countries. Horizons have expanded. How would an average advisor cope and how can he get prepared for the huge changes and challenges that are coming up every day?

That is the whole idea of joining hands with the best in the profession and learning from them, says Mr Jathan.

The MDRT Club, Mr Jathan says, started about 10 or 15 years ago. Mr P S Kochchar, one of the seniormost LIC agents, on attending an MDRT Annual Meet decided that he would bring this experience to his colleagues in India who were hampered by various factors including affordability and hence not able to attend such meetings.

He spearheaded the movement to bring an MDRT like experience to India and with him were others like Mr Praful Bakhshi, Mr Prabhakar Pai and Mr A J Louis.

Those days, Mr Jathan recalls, agents shied away from spending on such activities, but today the interest is higher and agents are willing to attend MDRT meets though it means spending 40 per cent of their first year commission for attending!

Mr Kochchar singlehandedly kept the interest going for a long time and then by 2004-05 when Mr R K Shetty became an office bearer in MDRT, he roped in likeminded people and “there was no looking back!” says Mr Jathan.

MDRT Days became an annual event, but not without some hard work to establish it.

The core group found itself going to all the seminars, conventions of the different clubs like Chairman’s Club and so on. “We even stood on the road distributing handbills that MDRT Day was being held in Mumbai!” recalls Mr Jathan.

They took stalls at industry events and found people avoiding them thinking it was too elitist. We had to literally call them and bring them to the stalls, he laughs.

As the event gained popularity the awareness among the Club members was that people may prefer to attend such a meeting closer to home, and hence was born the idea of multiple meetings.

This year it is being held between February 8 and 14 at Bengaluru, Delhi, Kolkata and Mumbai.

Mr Jathan, being the Zone Chair of MDRT and thus in charge of India, planned in advance the people he wanted so that he could give the movement a thrust in his year in office. He floated the idea of Company Chairs giving representation to eight or nine companies so that they could spread the word within their company about MDRT activities and membership. This was also to counteract the impression among agents that MDRT activities were basically an ‘only LIC’ affair.

There were series of meetings and responsibilities were shared out to all the office bearers so that a multi-city series of events could be carried out successfully.

The idea is to reflect the way MDRT also conducts its activities. ‘Clean and democratic’ as Mr Jathan describes it, each MDRT member is rated constantly on the level of participation and initiative he takes at all the meetings he attends. Whether it is volunteering to usher participants or helping with the arrangements, all the participants are scored continuously and it is this score that decides whether or not they are awarded posts like Local Chair and so on at the point in time when they are nominated to them.

“You have to put on the hat, wear the badge, and get working to earn your position,” Mr Jathan says. Sounds pretty much like what an agent has to do in his daily professional life anyway!

K Nitya Kalyani

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Mr B C Bhatia, DO, The New India Assurance Company, Mumbai

Twenty five years ago, in 1984, when Mr B C Bhatia, a Development Officer with The New India Assurance Company in Mumbai, was on his usual rounds in south Mumbai visiting clients, he took a small, but customary, detour to Mittal Towers, one of the posh office buildings there and reached an empty office in the building.

Today is not ‘usual,’ he thought to himself, as he spotted someone sitting in the office behind the glass panes!

As anyone involved in insurance sales would do, he walked right in and introduced himself. “A Britisher, one

Mr Taylor, was there with an Indian colleague and I offered them insurance services” This was the brand new office of the Mumbai branch of Oman International Bank!

The next day he got a call from the bank’s CEO’s office that the bank had bought an Ambassador car and needed insurance. Mr Taylor, a director of the bank, had told the CEO that all insurance should be done through one Mr Bhatia who had visited them!

That, for Mr Bhatia was the starting point of an entire portfolio of multi-national bank clients, 16 of them at one point!

And it did not come by chance either.

Mr Bhatia was keeping an eye on that office space in Mittal Towers from the year 1982 when a small board saying, “Opening Shortly – Oman International Bank” was put up there! Over the next couple of

years, Mr Bhatia detoured to the office whenever he was in the area and kept track of carpenters working or other developments.

From the time of its entry into the country he gave the bank simple office insurance right up to Banker’s Indemnity cover, a sophisticated fraud cover that he became a specialist in. Other banks like the Barclays Bank Group and the Calyon Bank, earlier known as Credit Lyonnais and Development Bank of Singapore all became his clients through references from his old clients!

Among the top Development Officers of New India, Mr Bhatia is proud of his balanced portfolio across different classes of business and his business performance of Rs 7.91 premium in 2008-09 and  a profitability of 25 per cent. In 2007-08 it was Rs 7.75 crore and 56.21 per cent. He has also been a member of the CMD Club since inception.

The Beginning

Mr Bhatia’s entry into insurance in 1972 was as a delivery boy in the office of his father, a Development Officer with National Insurance Company! That is where he learnt to introduce himself to clients and create relationships. At age 19, he had just finished college.

His father himself started as a delivery boy in the insurance agency office of his uncle, Mohanlal S Bhatia & Company in the 1940s before starting his own agency and then joining Ruby Insurance Company of the Birla group as an Inspector, the name for Development Officers back then.

When Ruby was merged with National Insurance following the nationalisation of the General insurance business in 1972, he became a Development Officer in National.

Earlier, he says, “my father had worked with various private sector companies like the South British Insurance Company, Maritime Insurance Company and Indian Mercantile Insurance Company. In Maritime Insurance Company, the British CEO at that time, took to him and sent him for Marine insurance training to London.” He was also gifted a Morris Minor car for his achievements in 1952 and the family still maintains it as a vintage car!

At National, says Mr Bhatia, his father was one of the top DOs among the four companies.

In 1977, Mr B C Bhatia joined New India as a Development Officer and began developing his own portfolio, as his father had always stressed. Starting with one big client in 1978-79 – Akai Impex – he developed his clientele and also his agency force.

Unlike in the case of Life insurance, his team of agents is small. Only eight persons, and that includes his son, Mr Ashish Bhatia.

Like his specialisation in multi-national banks, hospitals turned out to be another area of interest starting with Hinduja Hospitals who became his first client. Similarly with hotels. From insuring their premises to liability policies, he takes care of their business insurance needs.

Building Trust

How does one get and keep such clients?

The first job is, “to create faith in them and giving them service.”

To sell you have to start approaching them and you don’t get a response immediately.  Yet convince them they can trust you and they will start giving you business.

Pursuing the lead on Oman International Bank is one example, he says. Once the client is yours, you should be very firm with your service level, he says.

“When the client has trust in you and is giving you the premium cheque, he doesn’t ask you questions. At the time of claim, we should be at his doorstep to help him… just see how we can help him to get his claim and how fast and to his satisfaction…”

“Once that is in place, a client will get us another client,” he says. Just like his bank business worked out!

Carrying on the tradition

How does he get his agents, how does he find and recruit them?

“First of all I appoint him reporting to me as my assistant and just observe his ability. How he works, what interest he shows and whether he has an aptitude for this particular subject.

If he shows an interest then I give him the necessary training.”

His stress is that his agents bring in a balanced portfolio that includes commercial lines and personal lines. That is, industrial insurances like Fire and Engineering meant for large and small companies and their factories and establishments as well as policies for individuals like Hospitalisation or Personal Accident policies as well as Fire policies for homes.

His team’s portfolio comprises of about 40 per cent Fire insurance premium, 30 per cent  Health insurance and the rest is Liability, Engineering and Miscellaneous businesses.

Challenging Times

After detariffing of General insurance, how does he keep his team of agents motivated? With premium rates falling under the pressure of competition, commission earnings have also become very low.

“The more they do business the more they will earn,” he points out. “Today the premium rates have fallen, again the times will change!”

Falling rates will not be a continuous process, giving the highest discounts to the insured will stop. Companies will come to one point where they cannot give any more discounts.”

Moreover, he says, not every client is eager for discounts. They also respond to good service.

There is also the opportunity to give insurance policy to the small people – the individual entrepreneur or householder. Brokers don’t service this sector and the insureds need the help of agents.  “So, if you concentrate on this area, automatically, the organisation they work in also will be a prospective customer. It is like that!”

The lasting portfolio is the personal lines portfolio… and my business is also secure.”

Simply because, he says, an individual is not likely to shift his car policy each year from one agent to another, unlike corporate clients who move between brokers and agents when they see an advantage in pricing and so on.

Personal lines, he points out, also yield good commission rates. The 15 per cent commission is a good rate and the customer is not likely to demand a discount in premium rates the way a corporate client would.

That brings us to a completely different point. What is the reason why agents prefer to do Life insurance business and avoid General insurance? They say it is more difficult to sell, I ask.

Mr Bhatia completely disagrees. General insurance is a unique product. When there is risk to your property or health you have to take insurance and there is no other option. But there are other investment options that can play the same role as a Life insurance policy.

So it is easier to sell General insurance, he says.

But what about the impression that if one does not make a claim, the General insurance premium is a waste of money?

His typical argument is this: “Take your Mediclaim premium and total it for 15 years. It will hardly be Rs 1 lakh. After 15 years do you think you will be healthy? One hospitalisation will cost you the 15 years premium these days.”

End of argument!

Mediclaim is not his only target for his agents. He has trained them into a routine of going twice a month on weekends to housing societies and making presentations to the office bearers about simple covers they should have like third party liability insurance for their lifts or machinery breakdown cover for their water motors and water treatment plants.

Once they see the need for it, he gets his agents to sell them liability policies for the lifts that covers residents also. There is potential to sell householders policy to each and every flat in the society…. The potential is endless, he points out.

Competition has changed the insurance sector and the customer a lot, he says. Now the insurance companies have started giving extended cover according to the business requirements and the needs of the customer. “They are more responsive to that.”

Banker’s Indemnity cover earlier was restricted to certain coverages, now it covers transportation by courier, e-trading, computer crimes and liabilities caused by call centre activities. Extensions are available in the policy, he says.

“All these facilities have been extended as and when times have changed and players have started them.”

Service levels also have improved once the public sector companies realised that they could lose their customers to the private sector competitors.

Customers are also realising, he says, that low premium alone cannot be the criterion for choosing the insurance company. In a couple of years, he claims, customers who left public sector companies come back citing claims payment problems with private companies.

“The most important aspect of public insurance companies is that you are able to approach the management directly, at any level at any point of time.” This, he says, is not there among the competition.

Youth and insurance agency

Now that the education department has started college level courses in insurance, says Mr Bhatia, youngsters would start opting for a career in insurance.

His advice to them is born of his own experience:

“Start work from the junior level – maybe even as a delivery boy! People will talk to you, make you sit down and offer you a glass of water. This is your opportunity for personal contact – you can talk to them about other insurance products. Don’t think “I am a graduate, I should only sit in office as an officer!”

K Nitya Kalyani

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Mr P S Kochchar, Agent, LIC

Mention the name ‘pappaji’ and many Indian insurance agents will respond with delight and just a trace of apprehension!

For, the stern but cheerful Mr P S Kochhar loves and terrorises his beloved juniors – agents from around the country who flock to him to learn.

They say tough love never hurt anybody. Indeed it has helped thousands of agents whom Mr Kochhar taught, lectured and whipped into shape through his brainchild, the Life Insurance Round Table (LIRT.)

LIRT was born out of a 1986 visit by a small contingent of 15 Indian insurance agents to the Million Dollar Round Table (MDRT) Annual Meet in the United States, each paying $500 for the privilege.

‘Here was something very different and useful professionally, so why not help those from India who did not attend?’ thought Mr Kochhar. Thus was born Life Underwriters National Guild, which is a registered body, he narrates.

That took shape as LIRT and the first convention was held On December 28, 1988 as the Indian version of MDRT. Mr Prahlad Singh was the first president and speakers focussed only on education of the agent members and not on any company matters, he recalls.

A tradition that soon got established was that 2 to 3 pm was always an interaction session for delegates which led to the biggest gains since ideas were discussed and new ideas were sparked off!

Keeping in the spirit of interchange of knowledge, Mr Kochhar says, we did not allow anyone to choose their roommates (the convention was always a residential one) and this led to everyone meeting someone new and forming life long friendships! No Company sponsored the meet and members paid their own way.

In September 2009, LIRT held its latest annual convention in Hyderabad. This was just a couple of days after the Consultation Paper on ‘Minimum Common Standards for Financial Advisors and Financial Education,’ was released by the Committee on Investor Awareness and Protection, the Swarup Committee, which recommended that insurance commissions be phased out and replaced with fee for advice by the year 2011.

True to his initiative taking nature, Mr Kochhar hammered out a representation to Mr Swarup, gathered signatures from all the delegates and presented it to the PFRDA official who was a speaker at the convention!

Characteristically it began:

“Dear Sir, We have discussed the issue in LIRT Annual Convention September 5-8, 2009 Novatel, Hyderabad and have come to the conclusion that the job of the agent needs to be explained to you as the Chairman of the Committee comprising of representative of RBI, SEBI & IRDA.”

“Agents apply healing touch when someone dies by handing over the cheque to the widow when others are collecting dues from her,” he says in it, hitting the absolute crux of the matter when it comes to the role of the insurance agent.

But talk about the background of the issue as such and he is not one to mince words.

“It’s all of our own making,” he declares sipping coffee at his Worli office that he reaches at 8 am everyday. An hour to himself and he is ready to meet anyone who wishes to see him.

“This is not the first time the industry invited stern comments or corrections from authorities,” he says, recalling the case of keyman insurance.

Keyman insurance was sold as a method of masking corporate remuneration by availing of the Section 10 (10) D benefit which makes the proceeds of a Life insurance policy tax free.

There was widespread misuse of this benefit by way of companies taking out keyman insurance for their top management and assigning the policy to the individual – for no consideration – so that he is entitled to the policy benefits. This lead Insurance Regulatory and Development Authority (IRDA) to enforce a new rule that only term policies could be sold under keyman insurance.

That is a case in point but, according to Mr Kochhar, the problem is more widespread. The entire insurance community is, he says, “selling premium instead of selling insurance.”

If you have a sum assured of Rs 25 lakh and the premium is Rs 1 lakh then the premium is about five per cent and this is a welcome thing. But there are Rs 25 lakh policies with Rs 10 lakh premium!

Insurance is being sold today only to make the red bottom line of the banks black he ruminates adding, “No officer of any bank knows insurance!”

Bancassurance will be weeded out on its own is his belief. There is no second year premium from this source he says and business sourced through bancassurance is creating negative values for the insurance companies. “Generally only after the third year will the insurance company start getting something after the commission, provisions and so on,” he explains.

Coming back to the Swarup Committee, he offers his objections in two statements. Firstly, he says, the commission is NOT high for the typical agent. For pension policies the commission is seven per cent and for single premium it is 15 per cent. Only banks get 40 per cent, he broadsides. Management expenses ARE high.

Secondly, Mr Swarup did not have any business to talk about commission rates since that is in the purview of the Insurance Act, 1938. “Until it is amended how can the Pension Fund Regulatory and Development Authority (PFRDA) Chairman make such a statement?”

Not only PFRDA, but the Securities and Exchange Board of India (SEBI) and IRDA are all equally responsible for this statement because they had representatives on the committee and nobody opposed it, he says.

Let us come to the commission payment now, he challenges! “As an agent I call 100 people, get to meet only 10 and only one of them buys a policy.” If you think of that, the commission is not big at all.”

“Who will pay fees in addition to premium (here)?” he asks pointing out that the premium has to be reduced first since it contains an element of commission to the agent.

As for the question of charging a fee, “if people come to you to buy insurance then they will pay fees. To deserve the fee you should be an expert like a doctor, advocate or chartered accountant. They have several years of education and specialisation.”

In the 55 to 60 years I have seen this business I don’t think anyone has come to me. Even after we go to them many say, “kal dekhenge…”

If insurance is mandatory, then it is different, he ruminates adding, “I don’t expect fee business to emerge at all. If at all there is a fee it will be a fraction of the commission because the commission will be on the premium. But then, when people are asking for rebate where is the question of their paying any fee?”

The committee dwelt on the commission income of the agent, he says but that is a misnomer. If you deduct an agent’s expenses from his gross receipts very few agents will have income……

Recalling that the fees instead of commission suggestion came by way of a ‘clash of interests’ as perceived by the mutual fund industry, Mr Kochhar says that a mutual fund investor normally seeks an agent to carry out a decision that he has already made. It is a one time, short-term investment that he can withdraw partially or completely any time. Also the same agent can sell the funds of any fund house.

“But insurance is a long term commitment and we agents represent only one company.”

As for Mr Kochhar, he turned 76 recently. He had resolutely decided to not include his family members in his business just for the purposes of income division. So in 2007, he converted his individual agency into a corporate agency ‘to show accountability to my clients who must know that there will be someone representing them when it is time for the claim.’

The beginnings

Mr Kochhar started his career in 1953 at Kolkata as an Inspector of Agents with General Insurance Society of Ajmer.

Within two years, Life insurance was nationalised and it was all LIC and the post came to be called Development Officer eventually.

In 1969, when he was made Assistant Branch Manager he discovered that he earned less than a DO and was unwilling to cut corners by not spending on visiting agents. He requested that he be made DO again, but since that was not possible, he resigned and became an agent on September 13, 1969!

Then and now

After 40 years he looks back and says “we people were the torch bearers.”

Today also we are the ones who take the stage, but the difference is there is a lot of contribution by companies by way of advertisement. LIC now spends 100 times more on publicity, this was not there earlier and the sole advertisement message was the presence of the agent, whether in Mumbai or in a remote village.

Those days new plans were rarely introduced. Now, everyday there are new policies and they are confusing. “But they are not answering the needs of the people, only the needs of premium,” he harps. “Unless we stop talking of premium, it won’t improve, we have to talk of insurance.”

Mr Kochhar and LIRT also set up a training institute in 1988, Market Maxima Academy, in association with Life Underwriters Training College (LUTC,) Bethesda, Maryland, the US.

It started off a whirl of activity, “taking classes all over India every week for 13 weeks by rotation in places like Kolkata, Nagpur, Thiruvananthapuram and Kottayam.”

This continued for well over a decade but LUTC and he parted company in the year 2000 and the Indian activity, which came under a different management, withered away, he said.

Lessons

These are his lessons for younger agents.

“First, don’t rebate. It is not necessary.” He has lots of stories of how he lost business because of his adamant ‘no rebating’ approach. None of which has made him regret it, he says. “If they will rebate, why should they work?” he asks referring to agents, and admonishes them with “Don’t work for other people, work for yourself!”

The second lesson is that insurance is born out of necessity and so, the duty of the agent is to find out the need and not offer a manufactured product. “Don’t be a retailer, be a doctor.”

And a third lesson is not required, he ends. “Till a policy becomes a claim it’s your moral duty to service it. Service begins after it is sold.”

Learn or leave!

There is so much attrition of agents that only 10 per cent of recruited agents are still there after five years. In the first year 50 per cent leave, he says, and that is a worldwide phenomenon!

And adds with his characteristic matter-of-fact derision, “there are development officers with 150 agents and they don’t even know if they are dead or alive!”

“We never selected the right people and we went after numbers,” is his analysis.

There is so much in the press and electronic media about insurance that agents and DOs should also learn.

To both agents who won’t learn and DOs who won’t guide them he has only one thing to say. “Leave.”

K Nitya Kalyani

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Mr Rajesh Tagore, popular trainer of sales professionals, especially Life insurance agents

When a salesperson enters the profession,he may have a deficiency of knowledge. Once he gains knowledge, it is always a deficiency of execution says Mr Rajesh Tagore, popular trainer of sales professionals, especially Life insurance agents.

Based in Mumbai, Mr Tagore travels around the country constantly, keeping a busy schedule of training sessions. Rarely is he at home in his sparsely furnished duplex apartment in Andheri, sparsely furnished because it is also part of a busy schedule of bookings – for Hindi movie shootings!

The bathtub scene towards the end of the Oscar Award winning film Slumdog Millionaire was shot here, says Mr Tagore with a laugh! The apartment, thanks to its previous owner, is famous as a shooting location!

Knowledge, coming back to his training mantra, is something you have to not only acquire, but have to pay the price to acquire. Sadly, he says, the culture of learning does not exist among insurance agents in our country.

“It’s a very sad statement I have to make,” he says reflectively.

But learning, he says, will take you everywhere. The essence of his sales training is something he calls the Referable Approach and it depends on learning.

The initial stages when a salesperson lacks knowledge you can call his technique the Rejectable Approach. When the prospect knows that the salesman is deficient in knowledge, he turns him away.

Once the salesperson manages that deficiency he graduates to the Receivable Approach. Now the prospect is ready to listen to him.

But at this stage and for moving beyond this stage and reach great heights in selling, the agent has to invest a lot in himself, training himself and developing his implementation techniques.

That is when he can graduate to the Referable Approach. For this, says Mr Tagore, he has to not only learn but pay the price for learning!

Learning can mean anything from how to overcome call reluctance to increasing his level of activity. Any typical agent, says Mr Tagore, meets four or five persons a week. Many times, none of them is new! They should meet at least ten new persons  a month and sell to 50 new people a year. Says a surprised Mr Tagore, 99.5 per cent of them don’t do this!

Once he gets over any reluctance, he teaches them to develop a two call process. The first call or meeting, is for educating the prospect. It is not for selling.

You can gather information, you can tell him the benefits of Life insurance but

selling should be only in the second call, he says, and that meeting will happen only if the client is interested.

These calls are much more successful in not only bringing in sales, but also in obtaining references from those prospects!

From 1998 I have never made a sales call, Mr Tagore proclaims. Having moved from the Rejectable to the Receivable to the Referable Approach by then, he has people calling him asking for his training programmes!

“I am educating people on how to reach the referable approach and I am fortunate to practice it also,” he says. By that he means that his sales process is much advanced. He gets his clients by reference on his terms without getting up from his chair. “I study the companies who approach me and don’t take it up if they are not fit!”

Early Days

From selling trade ads in Yellow pages to training sales professionals, Mr Rajesh Tagore’s is an interesting journey.

He comes from a Telugu speaking family living in semi-urban Orissa and moved to Mumbai in 1988 to work. It happened because his sister, newly married and living in Mumbai, was making Rs 3,200 a month selling rubber stamps! That sounded like a fantastic opportunity coming from a hometown where there was no way to make a living.

When he came to Mumbai, he began selling carbon paper door to door.

“I did not know how to sell, I did not know the language,” he recalls. He survived simply because there was no way to go back.

“I worked hard and succeeded out of ‘no’ choice,” he says.

He knocked on 80 doors each day to sell his carbon paper and got 75 rejections. His colleagues told him nobody had lasted more than one year on this job!

That is when he discovered a ‘strange’ attitude he possessed. “Hearing a ‘No’ did not have any emotional impact on me,” he recalls!

Read and Implement

Another fortunate habit that emerged was reading. He read books and attended training classes, absorbing messages eagerly. Given that his father ran a magazine for which he would do all the editorial matter and coordination, his reading habit was well developed.

When he travelled hours together on Mumbai trains he would read books on sales. More importantly, the next day he would implement what he read!

His all time favourite book is Tom Hopkins’ “How to Master the Art of Selling.”

Coming up second is Joe Girard’s “How to Sell Anything to Anybody.”

I found the first ten lines of the introduction itself very exciting, says Mr Tagore, referring to the fact that Joe Girard, a car salesman, was the top salesman for 13 years inspired him and “I wanted to become like him!”

One of the ideas he found in the book was to get to know the birthdays and wedding anniversaries of his prospects and clients, and to wish them.

From that day he asked everyone he met, visited or revisited for this information. Remember, he would implement immediately what he read!

Soon he had a huge database and all he would do was to wish them on their special days, he never attempted to sell them anything or make a pitch. Soon he had 100 people to wish each day!

Yellow Pages and the art of selling

From this beginning, he moved to selling classifieds advertisements for Yellow Pages directories brought out by Dave Thompson Associates (DTA.) His selling techniques were well practiced and it

resulted in his becoming the top salesman for the company! That is when the company decided to start in house training and in due course a new career was born for Mr Tagore to culminate in the year 2000 when he became a full time trainer!

But in the interim he left DTA in 1995 to publish his own Yellow Pages and has the distinction of bringing out the only colour Yellow Pages in Mumbai and in India!

It was a struggle to survive in the market, says Mr Tagore, but “I learnt a lot about selling.”

At DTA he had met his future wife, Rina, and it was with her support that they went through the heady days of the Yellow Pages saga! Even today, it is Rina who holds the fort while Mr Tagore loses

himself in session after long session of training when, say delighted organisers, it is difficult to get him to stop!

He had also learnt, he says, that he was at an advantage when it came to selling since “My understanding about selling was a thousand times better than anyone else I know.”

The Yellow Pages era came to an end when the Internet started establishing itself among common people in the late 1990s and so he got into full time training in the year 2000.

And, on to training

His training career was spurred by Mr Santosh Nair, himself a leading trainer and earlier star salesman at Eureka Forbes. He invited Mr Rajesh Tagore to take on a special assignment for in-house training at Coca-Cola and trained him how to train, he says.

When he was doing a Coca-Cola session, it so happened that his insurance agent called him up routinely and they both happened to be in the same hotel!

Mr Tagore invited him to spend some time sitting in on the programme out of  courtesy, not knowing this would lead him into a big opportunity!

The agent of Life Insurance Corporation of India (LIC)  got very excited about the training and got his office to invite Mr Tagore to speak to 200 agents. The year 2000 Dussehra saw Mr Tagore giving his first seminar to development officers and agents of LIC Branch 91C, Santa Cruz, Mumbai.

Among those who attended was Development Officer Mr Mihir Lokhandwala, now the Western Zone President of the National Federation of Insurance Field Workers of India (NFIFWI) who had only one thing to say, “We want you!”

Rarely, says Mr Rajesh Tagore, one comes across a leader who also educates his team. And how! He was booked for 100 seminars in the next one year.

LIC training is different he says. Earlier he had pitched his training courses to Procter & Gamble. However, there was a problem. And that was that they wanted him to leave out his stress on how they could earn more, if they worked more. The remuneration structure was such that incentives were capped and the sales representatives could actually earn in that company only within a limited range!

Not willing to drop his message that a salesperson should chase his dreams, that he could fly without wings, Mr Tagore turned away from that assignment.

But Life insurance was a selling opportunity without end! The remuneration structure in LIC, the only company when he started out in this field, was conducive to the agent dreaming big dreams and achieving them.

They had the motive to earn, but not to learn, he ends sadly, though training as an activity has been taken up by the company widely with service providers like Datacomp Web Technologies also taking up training to emphasise their positioning.

Most Admired!

Whom would he rate as great in this field? Mr P Srinivasan, LIC Agent at Coimbatore, Corporate Club member and Founder-President of Life Underwriters Guild of India (LUGI.)

“I called him out of the blue one day at noon and he had met three persons who had approached him and he had closed the sales!” says an amazed Mr Tagore rating his sales process as ‘ultimate!’

Bharat Parekh of Nagpur, one of the top agents of LIC and a Corporate Club member too, is another much admired person on Mr Tagore’s list. “He is still open to learning!” he says with wonder.

K Nitya Kalyani

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Mr Anand Jathan, Agent, LIC, Mumbai

All eyes are on Seoul, Korea for that is where the 2010 MDRT Experience meeting is to be held between March 11 to 13. The meeting, which is a sampler of sorts for the Annual Meeting of the Million Dollar Round Table (MDRT), is open to non-members as well.

As Zone Chair (Elect) of MDRT for India, Pakistan and Bangladesh, Mr Anand Jathan,  Mumbai based veteran Agent of Life Insurance Corporation of India (LIC,) has a year of hectic activity ahead. His immediate aim is to send as many Indian agents to attend it as possible.

Working under the leadership of Mr R K Shetty, who is going to take over as Divisional Vice President, Membership Communications Division, a worldwide function for MDRT, Mr Jathan has a one point programme: to increase the Indian membership of MDRT.

Once that meets with success, his focus will turn to getting them to attend the MDRT Annual Meeting to take place in Vancouver, Canada in June 2010, but the Seoul MDRT Experience meeting is seen as a good intermediate step.

“This is because many Indians have not been able to attend the MDRT Annual Meeting due to visa denial by the US,” says Mr Jathan. The annual meet usually takes place in North America while MDRT Experience takes place in an Asian location, making travelling and stay expenses less.

Moreover, “You don’t have to be an MDRT qualifier or member to attend the MDRT Experience,” says Mr Jathan. As pointed out, it is a sample event for agents to get a foretaste of what they could do if they are part of MDRT.

The registration fee for MDRT Experience is 6,30,000 Korean Won (1 USDollar = 1257.83 KRW) and this roughly converts to Rs 23,500.

The two step plan has gained urgency because MDRT membership is stagnating from western countries and it is Asia that is bringing in any growth at all. Growth has been stagnating and attendance at the annual meeting took a hit in 2009 dipping below 5,000 after a long time. In recent years over 7,000 delegates participated in the MDRT Annual Meeting but this dipped to 4,600 in 2009.

But that is something the India MDRT apparatus is determined to change. (Read Rising for a Common Cause, Premium, July 2009, page 44)

A strong point in favour of a qualifying agent becoming a member of MDRT is his company’s encouragement and, most importantly, financial support to pay the membership fee and registration fees for the annual meet.

Says Mr Jathan, “When a company promotes MDRT, it is a win-win situation.” LIC had 359 registrations in 2009, he says of his own company. But it has 1992 qualifiers. If they became members they could easily be one of the largest contingents!

“Now LIC wants to be No: 1!” he says and intensive meetings have led to a company wide programme to develop the MDRT membership base among the company’s agents.

It is not only LIC that is his focus. He has recommended that all the India office-bearers of MDRT work for this mission right from the India Chair nominee Mr Sunil Sohoni to the Area and Local Chairs.

A new introduction is the Company Chair. Each Life insurance company now has a designated person for MDRT activities to take the message across to the agents of the company.

The India Chapter – as it hopes to become shortly – is also actively pursuing MDRT to schedule a visit of the President and the Vice President for MDRT Day celebrations planned across India. Planned for October or January, two locations, Mumbai and Bengaluru are on the cards.

Above and beyond all this, Mr Jathan has his own persuasive ways to convince an agent to qualify for MDRT. As India Chair a couple of years ago and then as Member of the Whole Person Committee last year, he has been giving speeches at every opportunity. One of the catchy

presentations he gives goes like this: if you were to qualify for MDRT for its own sake, and maintain it for five years, from the eighth year you would have an annual income of Rs 7.6 lakh in renewal premium alone! And this would continue till the policy term. Not a bad goal to set!

K Nitya Kalyani

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The 2009 Top of the Table (ToT) Annual Meeting of the Million Dollar Round Table (MDRT) meeting invites members to ‘embrace change,’ the theme for this year’s meeting to be held at Grand Hyatt Kauai, Hawaii, the US from October 7 to 10. Members and their spouses can attend.

The speakers and topics are Mario Armstrong, Unlocking the Power of Technology to Increase Business Growth, Thomas C. Bates, Private Split Dollar: An Alternative to Third Party Premium Financing, Robert Buckman, Change Is Good: The HARD and REDCAR Strategies, G. Scott Clemons, Here be Dragons: Navigating the Uncharted Waters of Today’s Economy, Tim Ferriss, The 4-Hour Workweek: Cutting-Edge Productivity and Lifestyle Design, Seth Godin, Invisible or Remarkable? The Power of Leadership and Tribes in Creating Marketing That Matters, Paul Greenberg, Welcome to the Era of the Social Consumers, Tom Hegna, The Right Tools to Help Boomers, Cindy Leines, Build a Brand That Sells, Ian Morrison, The Second Curve Meets the Flat World: Managing the Velocity of Change, Lawrence J. Rybka, Reassessing Insurance Carriers and Products in a New Era, Peter Schiff, The Collapse of the U.S. Bubble Economy and What It Means for Investors and Lee Woodruff, Life Changes in an Instant. MDRT’s web site, www.mdrt.org, gives the following additional information and advice:

Open Sessions have been introduced again due to popular demand. They offer a unique opportunity to get timely, fresh information on the topics that most concern you right now. During Thursday’s Main Platform session, you will help create topics for Friday afternoon’s Open Sessions Breakout. These Open Sessions allow you to engage in a mutually encouraging dialogue with other ToT members who are facing the same market challenges, productivity obstacles, and genuine concerns about the future of our industry and international monetary policy.

Come to the meeting prepared with topics you would like to discuss and ideas you can share. These topics will be used to create open breakout sessions, led by you or fellow attendees who will share their expertise. Bring your best practices, and lead or sit in on an Open Session. This is what ToT is all about: expert members sharing with one another!

No Handouts

The ToT is going green! Beginning with the 2009 Annual Meeting, ToT will no longer be providing printed handout materials to attendees on site. The handout materials will be available at www.mdrt.org beginning in September and will remain posted until November. Attendees will have the ability to download, save and print any or all of the handouts available. Handouts will be in PDF format.

Travel Visa Information

If you are traveling to US to attend the 2009 ToT Annual Meeting, we strongly encourage you to apply for your visa early. Processing times vary depending on the visa office.

If a member who is registered for the ToT Annual Meeting is unable to obtain a visa, the cancellations fee schedule will apply.

MDRT has no influence on a member’s visa application for travel to the US and is not responsible for the outcome of a member’s visa status. All decisions regarding visa applications are made by the local U.S. Embassy and U.S. Consulate officials.

Visa Letter

If you require a Visa Letter to attend the Top of the Table Annual Meeting, Please send an e-mail requesting a letter to Carmen Blume at cblume@mdrt.org.

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Mr R K Shetty, Agent, LIC

Mr Radhakrishna Shetty operates out of a second floor office very close to Shiv Sena Bhavan, the headquarters of the Maharashtra power centre political party, in India’s financial hub, Mumbai.

For several years, this leading Agent of Life Insurance Corporation of India (LIC) has been watching throngs of people being attracted by the charisma of an idea, a belief rooted in regionalism and linguistic pride.

It is a very different belief that led Mr R K Shetty, as he is known, to a very different organisation; belief and pride in his work as an insurance agent and the spread of professionalism. He qualified and became a member of the Million Dollar Round Table (MDRT,) the association of leading insurance sales professionals from across the world, in the mid 1990s and started playing an organisational role in 2000 when he became Local Chair for Mumbai.

He has just returned from the MDRT Annual Meeting in Indianapolis, the US, in early June when he was elected Divisional Vice President (DVP) of the Membership Communications Division.

He will be one of the 15 DVPs in MDRT and will hold this post for one year starting September 1, 2009.

His elevation comes at the end of a two year term as Regional Chairman, of one of the five regions that MDRT has split the world countries into, in 2007 and 2008.

As DVP for Membership Commications, Mr Shetty has the responsibility of leading and overseeing the activities of a network of nearly 400 members appointed to promote MDRT membership around the world, says a press release from MDRT.

The appointment comes at a significant time when Indian membership in MDRT has been growing spectacularly and shows promise of even more impressive growth.

From just 224 members in 2003 and the 14th position in the world, the Indian members numbered 3,970 in 2009.

India was in the third position after the US with about 10,000 members and Korea with about 5,000 members.

“India can easily become the leading country in terms of membership,” Mr Shetty told Premium at his Mumbai office. Behind this assertion is the fact that about 12,000 Indian agents have qualified for MDRT membership by virtue of the business they do, but do not actually become members by paying the fee.

Mr Shetty’s mission is to convert the qualifiers into members and to then enthuse the over 30 lakh agents community in India to qualify for membership.

Prior to his formal election, Mr Shetty was sounded out about his willingness to take the responsibility. Once he conveyed his interest to MDRT, although the election was to be in June 2009 and his term to start from September 1, 2009, he set to work!

He talked to his own company, LIC, and convinced the management to make it a priority to support agents to qualify for MDRT and, once they did that, to pay their membership dues to join the organisation.

“I conveyed to the management how MDRT is an international professional body that has been consistently promoting excellence and performance amongst agents. No doubt LIC has been helping agents but, if it makes MDRT membership a focus, it stands a good chance of becoming the top-most company in the world in terms of the number of MDRT members!” LIC, he says, has about 9,000 qualifiers!

The logic appealed to them, he says with satisfaction, and LIC announced its “MDRT Drive” with extensive motivational, support and monitoring and handholding activities from the branch to the Central Office level. (See Premium, May, 2009, Page 7 ‘LIC on MDRT Drive!’)

“A child, when it takes its first few steps, needs support,” says Mr Shetty, describing this effort and appreciating the response of Mr D K Mehrotra, Managing Director, Marketing, LIC.

The Indian private sector companies already provide different levels of support and motivation for their agents to qualify and join MDRT, and their numbers will swell the Indian contingent!

Home turf is obviously a good place  for Mr Shetty  to start membership efforts because India has been the fastest growing contingent within MDRT in the last couple of years. This trend reflects what has been happening in Asia.

Says Mr Shetty, “In 2003, MDRT membership worldwide was 28,000. It was 39,000 in 2008. This entire increase has come from Asian countries!”

“Of MDRT members, 54 per cent are from Asian countries,” he points out.

The flip side is that, in 2009, the total membership slipped from 39,000 in 2008 to 31,000. The recession in the US and other western countries has meant that insurance agents found their business falling and hence could not qualify.  Many who did qualify might have been hesitant to pay the membership fees and join up.

On being elected, Mr Shetty called for a meeting of the five Regional Chairmen and urged them to chalk out a programme for holding two MDRT Days in key centres in the countries they cover. One is to be held in October or November so that attendees can still qualify by end December for 2010 after being enthused, and the other in January or February when those who have qualified should be urged to become members.

He also discussed with them the need to support and guide members  to get their visas and travel to the US for the Annual Meeting.

“I told them that the MDRT Day should be celebrated in such a way that the participants think, ‘if this is MDRT Day in my hometown, imagine what MDRT Annual Meeting will be like,’ and become members!”

Mr Shetty, who has qualified for the fifth consecutive year for Top of the Table (ToT,) MDRT’s highest category of qualifications is all set to have a very busy year promoting memberships!

“I want to do what no one has done,” he says, “break all records!”

And if he is doing it for a common cause, there is nothing better the agents community can do than wish him all success!

K Nitya Kalyani

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Mr Mukesh Thakker, DO, The New India Assurance Company

It was Rs 18 crore in 2002-03, Rs 33 crore in 2004-05 and Rs 52 crore in 2007-08. In 2008-09 Mr Mukesh Thakkar, Development Officer (DO) with The New India Assurance Company’s New India Centre Branch, Colaba, Mumbai earned for his company Rs 58 crore worth premium. From then till now, he remains the company’s top DO!

“I had the full support of my branch and that’s why I could do it,” he says. And how! The entire branch was carved out of the Divisional Office only for his DO code, that is, for  business sourced by him and his ‘team!’

Motor team

His team is quite different from your usual team of agents under a DO. He does mainly Motor insurance business and his ‘agents’ are car dealers who are corporate agents.

Motor insurance may be a steadily growing portfolio, but it has always been a problem child of the General insurance industry. Liability claims and uninsured vehicles have always kept the portfolio loss making. Recently, the detariffing of Own Damage (OD) cover led to premium rates falling by up to 50 per cent. The pooling of the Third Party Liability (TP) cover has added its own instability to the business.

Added to this is the market’s reaction to the changes. Customers now want discounts on OD cover and sometimes this is to the extent of the agency commission of 15 per cent.

Not a smooth road

Motor insurance is a difficult business, but it provides daily cash flow into the company and into its investment portfolio. So companies never ignore it. Earlier customers took Motor insurance without their own knowledge because the vehicle dealer and financier took care that it was done. Once they were out of the influence of these two, many vehicles, specially two wheelers, just went without insurance.

The importance of insurance was felt only when an accident took place and customers received their claims cheques. Once that happened they were generally customers for life.

But today, says Mr Thakkar, we find that competition is so unhealthy that customers who have just received claims also renew with a different company. This is because the customer is promised the No Claim Bonus which the old company will not be able to give. How? By hiding the fact that a recent claim was paid and not insisting on renewal notices for proof of claim history.

He is also alarmed at the trend of the same insurance companies rejecting the claims of this new customer, citing ‘wrong declaration, something that the agent of the company had ‘concealed,’ and not really the customer, who might have gone along, but is now paying the real price.  They also unilaterally cancel the OD portion of the insurance policy without refunds to the customer.

“These dishonest practices,” says Mr Thakkar, “are spoiling the market.”

In his own case, he discreetly verifies the claims history of a vehicle before renewal and puts the renewal notice copy on record to confirm a no claim status.

“But my agents are losing business,” he observes.

“Earlier, the philosophy was, ‘pay claim, get business,’ and I used to tell my agents, ‘don’t be afraid of claims, it will bring you more customers through word of mouth publicity,’ he recalls with irony!”

Staying afloat

Mr Thakkar covers a huge volume of the premium segment vehicles in Mumbai metropolitan area. And speaking of claims, almost 25 per cent of the claims during the 2005 Mumbai floods were for his clients!

Major chaos and bad publicity about the General insurance industry’s claim settlements, Mr Thakkar says, were overcome thanks to an initiative he led on behalf of Mumbai Regional Office I of New India to standardise claim slabs.

Mr Mahendra Dhruva, and Mr B N Mehta, senior and well respected surveyors and Mr Thakkar held three meetings with all the major automobile manufacturers and hammered out a commonly agreed claim amount structure.

The surveyors determined the fairest level of flood water damage for water having come to the floor level, the seat level and above seat level. The manufacturers, for their part, agreed that their workshops would charge those rates and slowly one by one the General insurance companies agreed that they would pay those lumpsum claims.

This avoided any one-sided haggling and delays over the claims quantum as well as differential labour rates. It also avoided the ‘evasive’ tendency of some of the new companies, says Mr Thakkar, who wanted to pay nothing but washing charges.

The larger claims for higher levels of damage were dealt with on a case to case basis as the numbers of such claims were not high.

“This joint initiative gave us lot of mileage,” he says, and he should know because he had a 25 per cent market share in the losses paying out about Rs 25 crore out of the Rs 100 crore that the industry paid out in Mumbai that year.

The 25 or so automobile dealers in Mumbai, of Maruti, Hyundai, Honda and of commercial vehicles too that Mr Thakkar services are his mainstay. He barely does about Rs 10 lakh premium through individual agents who do some Mediclaim or Fire policies.

It was only in 1999, 17 years after he entered the profession that Mr Thakkar decided to specialise in Motor insurance.

“I had lots of friends who were arranging car loans and they placed business with me.” Seeing that this could be a lucrative line to develop Mr Thakkar started getting in touch with automobile dealers and,

using his Regional Transport Office (RTO) contacts expanded the business.

Sai Services, one of Mumbai’s leading Maruti dealers, was the first channel partner to sign up and this specialisation led him straightaway to a Rs one crore business in the very first year, and for the very first time.

The rise

Born and brought up in Mumbai, Mr Thakkar was doing average business till a new Divisional Manager (DM,) Mr Ramesh Bhise, was posted to his Divisional Office. “I flourished,” Mr Thakker succinctly describes the three year period from 2001 till 2004 when Mr Bhise retired.

The one valuable thing that the DM did was to create an atmosphere in office whereby the petty rivalries and sabotage between development staff and administrative staff were erased and the entire DO force started working as a team.

“He made us understand that development and administration teams each had a distinct role to play and placed faith on us. We are enjoying the fruits of it today,” says Mr Thakkar, equally acknowledging the way Mr Salve, the current DM, is sustaining that spirit and momentum.

On his part he used the opportunity given by the positive office atmosphere to put into practice what he believed. “Give the customer the correct information and he will understand it even when you have to reject the claim,” he says adding that unfortunately our marketing force is just behind commissions and run away when there is a claim.

On time service!

How he became popular and successful is an interesting story.

He was not doing good business early in his career during the public sector monopoly days. He noticed that clients and the marketing force would keep waiting for the surveyor to turn up. The surveyors  would come when they were ready to do so because they knew that the business would never go away from their hands. Slowly the inertia and the lack of accountability wore down the sales force’s enthusiasm to sell and the intention to service.

Mr Thakkar decided to take things into his hands and started getting the name of the allotted surveyor and fixing the time of his visit. He also kept the client informed, thus delighting the latter when things started happening as announced.

“People were naturally surprised when there was a call at 7pm from a public sector company,” he says.

Nowadays, he says, the insurance company gives names of the entire panel of surveyors to the dealer and they call up and fix the schedules. “I come to know only after the vehicle is repaired,” he says.

There is also a flip side to this. There are many in the surveyor profession willing to beg dealers for assignments and they are doing whatever the dealer tells them, ridding the profession of its respect. “The dealer takes the photo and the surveyor writes the report,” he says with dismay.

Coming back to years ago, when he took that proactive role, inquiries started coming in for new business. Anyone in the marketing field knows, he says, that if you take care of your customers, they will take care of you. That was one thing he became very clear about: ‘Don’t give false promises.’

“On day one if you tell the truth, everybody understands.”

Yet he works hard to get the claim paid, delivering the cheque at the doorstep of the customer. “My personal wish is that the client should never come to my office. If I get 10 quotes when I want his business how come I go missing when a claim comes? If I can collect his premium at his doorstep I should deliver the claim cheque at his doorstep too!”

“When a claim comes, we should be beside the client, on his side, he expands. If I cannot pay, I should explain why.” And that, in a nutshell, is Mr Mukesh Thakkar’s philosophy of business, his strategy.

K Nitya Kalyani

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Mr Harish Desai, ,DO, LIC, Mumbai

A firm believer in concept selling, Mr Harish Desai, Development Officer (DO) Goregaon Branch 688, Life Insurance Corporation of India (LIC), Mumbai, insists that an agent must understand a prospect completely and, in turn, make prospects understand themselves and their real needs. The agent must explain the life cycle demands to the prospect and sell them the best possible package.

Twenty-three years as a DO with Life Insurance Corporation of India (LIC), 58 agents in his team, two of them Top of the Table agents, four Chairman’s Club members, two Zonal Club members and a premium earning of Rs 5 crore last year is impressive statistics! To top his achievements, he has been named Ace DO thrice! However, in spite of monetary success, Mr Desai decided to focus more on training than earning. Since 2004, he has turned his attention to empowering LIC agents with the knowledge that they have the best backup from the biggest insurance company in India and great success is within every agent’s grasp.

Advantage LIC

“LIC agents come with great contacts, prospecting is not their problem. Closing is,” says Mr Desai emphatically. He tries to strengthen agents’ confidence by making them aware of the stability of the institution they represent. He encourages his protégés to sell concepts and not remain mere product pushers. “Private insurance companies employ marketing savvy people to sell. They encourage advisors to sell aggressively, sometimes resorting to inflating the virtues of the product. LIC agents have no need to do so. This is what I stress on,” he says.

Training programmes

“When LIC announces a new product, agents act as if it is the last product in the world. I tell them, ‘Hold on! Do not merely sell a product. Understand the needs of the customer. Give him or her the best deal.”

Mr Desai’s philosophy has become so popular and shown such positive effects on agents that he is often invited by other divisions as far as Kolkata and Chennai to train agents. He also conducts training programmes for the National Federation School of Insurance Studies (NFSIS,) an educational institute set up by the Chennai Division I unit of National Federation of Insurance Field Workers of India (NFIFWI.)

He has developed a unique training module of three hours to a full day focusing on concept selling and motivation. “I typically address 100 to 1,000 agents in a seminar and allocate 60 to 70 per cent to technical knowledge and 30 to 40 per cent to motivation. They are trained agents, they only need to be helped with the finer aspects of selling.” adds Mr Desai.

Keep them happy

While addressing other DOs, he emphasises agent retention as the main theme.

“There is a lot of competition from private insurance companies. If we do not make an effort to help our agents sell better, they will just move on to another company,” he adds.

He believes that just as a dissatisfied customer can walk away from you, a dissatisfied agent will also leave you. On the other hand, just as satisfied customers refer you to new customers, satisfied agents will bring you new agents!

“If you want your agent to stay, give him knowledge, keep him happy,” advises Mr Desai.

He recounts an interesting case when an agent hailing from a community of menial workers got disillusioned because he was not able to earn enough. He wanted to take up the job of a sweeper with the municipal corporation. Mr Desai encouraged him to adopt concept selling and trained him towards this. Soon the agent saw a 50 per cent improvement in his sales figures. Today he earns up to Rs 6 lakh as commission per year!

“He used to live in a slum, but today he owns two tenements and a shop,” says Mr Desai. He also points out that the agent’s customers are not just from the lower strata of society but even the Managing Director of the third largest share broking firm in India! He sold him a Rs 3 crore policy with a Rs 24 lakh annual premium.

Selling high

Perhaps as a living example of the heights that can be achieved in selling insurance, Mr Desai himself closed a deal on behalf of an agent. The premium amount, a mind boggling Rs 5.5 crore per annum! “I want my agents to truly believe that they should not set a mental limit for how much they can sell. This is a need based selling profession and human needs grow. We should make the client understand that if they can afford it now, there is no better place to park their money than insurance. Which other investment offers such complete security?” he argues.

Policy feeds

Mr Desai has the habit of preparing a detailed premium calculator, analysis, benefits and other technical aspects of any new policy introduced by LIC.

“I keep the language brief and simple enough even for a non-English speaking person to understand. The whole document is seldom more than a page,” he explains.

He distributes this document widely to agents through his email ID database. He does this like a service because he believes insurance is a ‘pious’ profession and he wants to help the agents who are like messiahs delivering a safe life to their customers. He recently sent out such an analysis for ‘Jeevan Aastha’, which many agents found very useful.

Finding agents

The common route to recruitment is the direct approach through the employment exchange or placing advertisements in newspapers though that cannot be done officially. But the best way is by word of mouth, says Mr Desai. An old agent bringing in a new one is the most ideal. “I look for three main things in a prospective agent – maturity, sincerity and character,” he says.

Final say

Mr Desai asks DOs to emphasise patience and perseverance. “It must be impressed upon the agents that they can see the business grow only after a few years. They must not look for instant gratification. Most importantly, they must be made to realise that only after five years as an LIC agent, their renewal commissions will start kicking in unlike in private companies.”

“Embrace concept selling and keep trying. Even if at first a prospect says ‘No’, don’t give up. Try once more. Often the circumstances would have changed and you will find a plum sale on your hands!” he advises sincerely.

Rangashree Srinivas

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