'To curb insurance mis-selling, train agents'

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'To curb insurance mis-selling, train agents'

Khyati Dharamsi/ DNA MONEY | 2008-10-28 13:40:06

insurance

Selling insurance isn't easy. Ask any agent and he'll tell you what all one has to endure to sell a policy. Yet, there are scores in this country who more than survive on selling insurance.

Nagpur-based Bharat Parekh, for one, makes as much as Rs 12 crore a year selling policies of Life Insurance Corporation. Parekh, who started selling insurance at the age of 18 some 25 years ago, is also a mutual fund distributor and has recently published a book, 'Adding more to Life…' based on his experience.

He spoke to Khyati Dharamsi about how he managed those enviable numbers.

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What made you join LIC as an agent?

I was in my college and was looking for some additional income. Then I saw an ad in the newspaper about LIC recruiting part-time agents, paying them Rs 300. The thought of additional money attracted me and insurance distribution eventually turned out to be my only profession.

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When did you decide to go the high-networth-individuals way?

Initially, I was just selling policies to relatives and rickshawallahs, but I knew if I had to move up I had to do something different and hence the HNIs. Now, I don't ask people to buy policies from me, instead they call me up and tell me "Bharatbhai, I want to buy policies from you."

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There was this gentleman who called me up once just to understand about an aspect of employee insurance, the way I explained it to him, he was so convinced that he decided to buy insurance from me alone. He even flew down to Nagpur from Mumbai, just to get the mandatory medical test done for the insurance policies.

Which tricks of the trade helped you in the initial years?

I used to contact people looking at obituary ads in the newspapers. I tried to build relationships with people using different ways. Those days there were no examinations to become an insurance agent, but there were several courses that helped you sell and I learnt from these.

Any specific incident you might want to narrate?

Once I wrote to a renowned chartered accountant in Nagpur, seeking an appointment. I mentioned my telephone number at the end of it and requested him for just two minutes over the telephone. He called me up and asked, "You think I have time for a life insurance agent?" I said I am sorry, sir. I had lost hope, but later I started thinking about how to convince this person. I called up one of my staff to cut out a demand draft of Rs 5,000 in the name of the chartered accountant and enclose it with a letter stating, "You have been kind enough to provide me two minutes. Here is the compensation for the time you have granted." The CA immediately called me and granted a meeting. When we met, he apologised and said, "Main bada aadmi nahin, aap bahut bade ho professionalism ke mamle me" (I am not a great man, you are. You are more professional than I am). He granted me a cheque for Rs 2.18 lakh, apart from returning the cheque I had sent him.

How do you manage to keep Bollywood stars happy?

I do the financial planning for some Bollywood stars. Those who are not my clients, I try to maintain a relationship with them as well. I look at newspapers and in case there is any development, I send a congratulatory note. We also enclose a PowerPoint presentation along with that and our website address, so that they know about us.

These days there are several software to help insurance agents cull out the birthdays and anniversaries of their clients. How did you go about when nothing existed?

We used to maintain a diary with the details of each client and the records. I used to take help of my twin sister to do that. There was a lot of discipline that I had to bring about in my life. It was painful then, but it helped me grow.

Have you suggested any measure to the Insurance Regulatory and Development Authority (Irda) for curbing mis-selling?

I haven't suggested anything to Irda. But, I believe there should be no initial examination to become an agent. Many people do not join the industry fearing that one examination, which is not really tough to clear. Give the agent some training and let him stick around for at least six months with the development officer and then test him.

But, won't people who do not know anything about insurance tend to mis-sell during the first six months?

Okay, don't let them sell, but just observe them and train them.

Do you think insurance companies have the time and the money to spend on training insurance agents for six months?

LIC has all the necessary facilities… Also, I believe that there is a need for financial education of the customer as well, which is essential. You also need to trust your financial advisor to make the right financial plan for you.