In an attempt mainly to protect its topline regardless of profitability, the four public sector general insurance companies are considering re-appointing retiring development officers and marketing executives on contractual basis, said officials. But the move has evoked a mixed response, including heart burns.
The proposed scheme would allow development officers retiring on or after March 31, 2016, to be re-appointed as business associates provided they procured a premium ranging between Rs 1 crore and Rs 2 crore based on their place of posting.
The business associates will be paid a remuneration of their last drawn basic pay, subject to achieving the business target.
If the targets are not achieved, the remuneration will be reduced accordingly. However, a minimum remuneration of 40 per cent of their last drawn basic pay will be paid.
They will also be paid volume allowance, conveyance allowance and profit incentive.
The scheme, however, does not talk about the profitability of the existing business and whether it is prudent to retain them at all.
Currently the business channels for the National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance are development officers, agents, brokers, micro-offices and direct sales people.
“It is a welcome move by the companies. At an average each development officer will do a business of Rs 2 crore per annum. Each company may have a minimum of around 1,000 such officers. So the potential business to be retained within the fold is around Rs 2,000 crore per company,” S. Vasudevan, Secretary General, All India General Insurance Field Workers’ Association (AIGIFWA), told IANS.
On the other hand, some of the officials manning the micro-offices/one man offices are upset at the development. The micro-offices are manned by administrative staff-clerical/officers having an aptitude for marketing and also by development officers and those promoted from the development officer cadre.
“A development officer is serviced by a full-fledged branch. On the other hand we have to procure business and complete the documentation. Our remuneration is only our salary. Many of us do business equivalent or better than a serving marketing executive,” a clerk at a micro-office of a government insurer told IANS, preferring anonymity.