The Ides of March is around and while it may bode ill for some — for the life insurance industry it is a time of good business.
It is probably the busiest time of the year as agents and sales officials scramble to meet targets, save their agencies and jobs and use the bait of tax savings to snare a few more customers before the end of the fiscal.
Industry leader and state-owned behemoth Life Insurance Corporation (LIC) makes about 20 per cent of its sales during this month. That’s been the trend for many years.
It is not very different for private sector players either, although a few individual players can sometimes derive as much as 30-40 per cent of their premium income during this month. A little over a decade ago, the industry (when private players had just come in) got as much as 50 per cent of the premium during this month.
So, why does this skew happen? RM Vishakha, MD & CEO, IndiaFirst Life Insurance, explains her company’s experience: “A lot of our customers are agriculturists and SME businessmen (who tend to look at tax savings towards the end). This is the season for agriculturists, since they would have just had their harvest and are willing to spend. And so a significant part of insurance sales happens at this time.”
Shamik Banerjee, Chief Marketing Officer, Aegon Life Insurance, which focuses a lot on online sales, said digital sales have not seen any such skew, while agreeing that about 12-15 per cent of digital business revenues comes during this month.
Banerjee says customers, whether they are salaried or self-employed, generally tend to wait till the last minute, although the online customer is now becoming more aware and doesn’t wait till March.
Insurance agents, meanwhile, have their monthly targets and quarterly appraisals. So, shouldn’t the sales be more evenly distributed?
That’s fine in theory, yet the last minute push is almost Pavlovian, akin to runners lunging for the tape on the homestretch.
“Changing the seasonality is still going to take some time. It is a noble thought. The intent is there. We are working on it. Next year, I would want to bring a bit more smoothening of the income curve if possible,” says Vishakha.