During first quarter April-June 2012, corporate agents have witnessed increase of 13% in their commission income while, individual agents and brokers have witnessed a slight fall. Consequently, portion of commission earned by corporate agents has also gone up to 47% out of total commissions paid in first quarter of 2012-13 as against 42% in corresponding period last year.
These are the findings of an analysis of eight large life insurers. Eight life insurers that were considered for the analysis are SBI Life, HDFC Standard Life, Max Life, ICICI Prudential Life, Birla Sun Life, Reliance Life, MetLife and Aviva Life.
Total commissions disbursed by these eight life insurers during April-June 2012 increased marginally by 1% to Rs 539 crores as against Rs 533 crores in corresponding period last year.
Total commission paid to corporate agents during April-June 2012 stood at Rs 253 crores as against Rs 224 crores in corresponding period previous year.
Generally, life insurance companies depend on corporate agents (including bank partners), insurance brokers and individual agents for distribution of their products. Individual agents and corporate agents are allowed to sell insurance policies of one life and one non-life insurance company, while there is no such restriction on insurance brokers.
During first quarter of FY’13 individual agents earned commission income of Rs 255 crores as against Rs 271 crores in first quarter of FY’12, a drop of 5.6%.
During April-June 2012, insurance brokers earned commission income of Rs 35.6 crores as against Rs 38.4 crores in April-June 2011, a drop of 7.3%.
Corporate agents have seen an increase in their commission income as corporate agency channel has expanded over last few quarters; it has increased its presence in Tier II and Tier III cities. Also, corporate agents generally focus on traditional insurance products where commission rates are higher as compared to Unit-Linked Insurance Plan (ULIPs).
MetLife has seen a steep rise of 158% in commission disbursements to corporate agents. During first quarter of FY’13 MetLife paid Rs 15.75 crores to corporate agents as commission as against 6.1 crores in first quarter of FY’12.
ICICI Prudential Life disbursed Rs 61 crores to corporate agents as commission during April-June 2012 as against Rs 34 crores in corresponding period last year, a rise of 80%.
However, during first quarter of FY’13 commission income for corporate agents of Aviva Life decreased by 33% to Rs 5 crores as against 7.5 crores in first quarter of FY’12.
The commission income of individual agents of HDFC Standard Life increased by 70%, during April-June 2012, to Rs 30 crores as against Rs 17.7 crores during April-June 2011.
Private life insurer, Max Life insurance has announced its maiden interim dividend of 5.1% for its shareholders.
