If an FMCG sales manager accompanies a life insurance advisor during all his calls on a day, he would definitely acknowledge that selling a policy is substantially different from the usual sales process in which a tangible product or an instant service is exchanged for value in cash or cheque.
Visiting a shop, a bank or a hospital triggers the sales process, but the sale and purchase of life insurance begins with the potential customer being visited by the salesman. It is essentially a process of influencing a prospective buyer by creating a need in his mind for the product, which is more for peace of mind vis-?-vis financial security and not for immediate consumption.
Convincing such people to pay a large amount as single premium or an amount over a long period in instalments, irrespective of fluctuations in future income, is definitely a very challenging and complex activity. Selling without a commodity on the shelf is highly dependent on one?s ability to influence a prospect through a transaction based on core propositions of benefits, matching them with the felt need of the buyers, strength of logic for an immediate decision, value of the brand and assurance of continued service.
Marketing officials of insurance companies need to thoroughly understand the factors that lead to a win-win situation for the salesman as well as the customer. Each sale is the beginning of a relationship that is expected to last for 20-30 years. Sales force management strategy is hence very crucial to a company?s success, and it needs to be drawn up with care and sufficient insight regarding the sales process on the part of the managers responsible for distribution.
The advisor is expected to have acquired the competence to positively influence current and future customers by his knowledge and willingness to serve in more than one way. He is to win the customers to such an extent that he is accepted and recognised as a family member. This could be possible only if he is propelled by the belief that what he sells is for the benefit of the society and his is one of the humblest professions.
Acquiring knowledge about all financial products and the basic elements of financial planning is the first step in one?s quest for the aforesaid image. Salespeople have to learn the art of exercising tremendous patience in all circumstances and must have the guts to overcome several ?NOs? before hearing one ?YES?.
A sales person must cultivate a positive attitude to survive in the profession. He needs to be continuously focussed on what is best for new as well as existing customers. More often than not, he has to manage a hostile environment to reach a prospect and, finally, sell him what is the best for him. He needs to concentrate on what is most suitable for the customer, rather than on what is more rewarding for himself.
His performance will also depend on how well he is supported by his company. In real practice, salespeople suffer from support deficit in almost all companies. In spite of this, there are people who have scripted great success stories and have emerged as role models. Without such committed salespeople, LIC would not have been as great an organisation as it is today. They have shared the vision of the corporation and have relentlessly worked to take the message of insurance to every nook and corner of the country.
Similarly, there are several highly successful young advisors working for private insurers and helping the industry raise its share in GDP. It hurts the sentiment of dedicated foot soldiers when they are branded as mis-sellers. For a few medical practitioners indulging in unethical practices, the community does not brand all doctors as monsters. Like every profession, the insurance salesman also needs to be treated with respect.
The complex responsibilities and the time, energy and skill deployed in concluding a sale must be adequately compensated. The relevant regulations have to take care of such issues so that the tribe grows and expectations of the industry from the nation are fulfilled. If timely care is not taken of such critical issues, the life insurance sector will stagnate like the mutual fund industry.
The symptoms are already reflected in the business figures for the last two years and the slow growth rate up to July this year. Customer centricity does never mean that only customers should benefit even at the cost of all other stakeholders. If the interest of the customer is to be protected at any cost and if pricing is the only yardstick, then there is a strong case for providing support to insurance companies through subsidies from the state. After all, the companies are providing social security to millions of people every year, which, in any civilised society, is the responsibility of the government.
The case is even stronger than some industries enjoying subsidy as insurance companies provide the economy long-term funds at low cost for developmental activities. When the government wants to reduce fiscal deficits by disinvestment, it depends heavily on the financial muscle of the insurers.
So an ever-decreasing number of retail distributors may prove to be the greatest barrier to achieving desired growth. Unless and until we have adequate feet on street, financial inclusion will remain a distant dream.
Policyholders, business leaders and regulators must clearly understand the sales process and the importance of having a well-groomed and enthusiastic army of advisors for moving ahead towards the sector?s objectives. In our country resources are available in plenty, but a conducive ecosystem must be created to maximise productivity of each resource. Today, a terrible myopia seems to be afflicting all those who matter.
The writer is former MD & CEO, Star Union Dai-ichi Life Insurance
