After a sedate existence Tata AIG Life Insurance Company
Limited is expanding its distribution network in an aggressive
manner. The company, which had 81 branches as on 31 March,
2007, has 169 branches three months later. And, it has
chalked out plans to have 205 branches by the end of August
the media in Chennai on Tuesday after launching a new
whole life unit linked life insurance whole life policy
(ULIP) InvestAssure Gold, the insurers chief distribution
officer Joydeep K Roy told the media that the company
wanted to consolidate its operations before expanding
branch expansion will also lead to a 30-per cent increase
in Tata AIG''s agency force of 23,400 at present. "Unlike
other life insurers we follow a strict agent recruitment
policy, which keeps our agency churn low," Roy said.
AIG''s agency system is based on a two-tier model. The
first tier agents and the second tier form the business
associates or agents who are promoted to the next level
based on performance. These associates also get to recruit
new agents and manage them.
since market penetration is possible through a strong
distribution network coupled with vibrant agency force,
individual agents account for half the company''s total
premium, with the other half coming from other distribution
channels like banks, corporate agents and brokers.
company''s average premium per policy is over Rs15,000.
A substantial 55 per cent of the total premium comes from
unit-linked policies, with traditional policies bringing
in the rest. Therefore, the company sells a decent number
of plain term assurance policies. According to Roy, the
policy lapse ratio is around 14 per cent. As to the spread
of business he said all the four regions contribute more
or less equally.
AIG is the only private life insurer to have adopted the
zonal business model unlike, the centralised model followed
by other companies. According to Neetasha Joshi, senior
vice president and South zone business head, most of the
decisions barring those relating to claims have been delegated
to the zonal offices. "This in turn has resulted
in faster turnaround time and increase in business."