A branch manager at Edelweiss Tokio Life Insurance in Nashik earning nearly Rs 24 lakh per annum suddenly chose to quit. The reason? He wanted to become a managing partner (MP) for the life insurer even as his remuneration dropped to just one-tenth of his earlier income.
What could have led him to opt for this seemingly losing proposition?
As a managing partner, he got to be an entrepreneur and have the independence to work at his pace. And more importantly, he had the opportunity to earn a much higher remuneration - over and above the Rs 2.4 lakh annual income he received as a managing partner - from the policies sold, from his own office provided by the life insurer.
This initiative, the first of its kind in the industry, currently has 17 such managing partners working in their independent offices. While these individuals are still employed with the insurance companies, they get the freedom to work from their own offices like financial consultants.
Vikas Bansal, Chief Human Resource Officer, Edelweiss Tokio Life Insurance said the idea is to boost 'intrepreneurship' in the company through the managing partner system. This, he said, benefits both the parties, since the insurer gains from the additional business procured through this channel while the individual is able to earn significantly higher.
Intrepreneurship refers to individuals who are able to function as an entrepreneur even while being employed in a firm. Companies encourage intrepreneurs to improve productivity and boost innovation.
“Each of these individuals is like the head of his company. These MPs can take their own business decisions and also hire staff members. If these individuals need loans for setting up the office, we help with that. These people gain from our brand presence and we gain from their distribution skills,” said Bansal.
Agents and other Edelweiss Tokio Life employees can apply for the MP position. The company then does a detailed evaluation and conducts interviews to verify if these individuals will be able to set up an office, hire people and make the business sustainable.
Bansal explained that unlike a regular agent working for the company, an MP is the head of the office and decides their own work hours. He added that the potential to earn is multi-fold since these individuals are the actual owners of the particular office.
For the April 2018 to February 2019 period, there was a 38.5 percent growth in Edelweiss Tokio Life’s first-year premium to Rs 350.68 crore. For the nine months ended December 2018, the 13th-month persistency of the life insurer stood at 81.9 percent (by premium). Individual agents account for the majority of policies sold by the company.
In the future, Bansal said these managing partners should be allowed to sell all kinds of financial products so that a customer can buy multiple such savings/investment instruments from the same individual.