Abhishek Bachchan LIC Agent – Peformance
Abhishek Bachchan, actor, also LIC agent
Abhishek Bachchan entered the ranks of LIC agents some time last year, but has not achieved anything remarkable so far. Quite unlike his relative, Ritu Nanda, the wife of Escorts group chairman Rajan Nanda.
Ms Nanda has been in the LIC business for the last 19 years, and has occupied the top slot in the country in terms of sum assured and first premium income (FPI). Last year, Ms Nanda earned Rs 9 crore as FPI. In fact, the Escorts first family has four LIC agencies in the family, registered in the names of Ms Nanda’s daughter, Natasha, her son, Nikhil, and her daughter-in-law, Shweta, who is also Abhishek Bachchan’s sister.
They are not the only ones. In fact, it is a trend with high net worth individuals to own an in-house LIC agency. Brij Pal Das, owner of the Clarke group of hotels, was an LIC agent for 30 years. The late VN Gadgil’s daughter, Archana Bhalerao, has been one for a number of years and “a whole lot of MPs, MLAs and CAs are LIC agents today”, says Mr AP Singh, senior divisional manager, Delhi Circle 1, LIC.
What is the motivation? “It is to get satisfaction and a sense of fulfillment,” says Ms Nanda. More important, perhaps, is that the celebrity gets to keep a large part of the premium income, which comes as commission and may run into crores of rupees, within the family.
For instance, if an individual or a family collectively pays Rs 1 crore every year as premium for a policy with a 15-year maturity period, the agent is entitled to a commission of 30 per cent of the premium paid during the first three years, which works out to Rs 30 lakh, and another Rs 2.5 lakh for every subsequent year. This works out to an additional Rs 30 lakh. Thus, the total commission income over 15 years works out to a whopping Rs 60 lakh.
Market sources say that many wealthy people use this route to give legitimacy to their cash income. Others use it as a side business or to supplement the main income.
According to Mr Singh, “There are two types of agents — celebrity and celebrated. Celebrity agents are different from celebrated agents — any successful agent is a celebrated one.” He says, “Celebrity agents are yet to be celebrated in the insurance field, Abhishek Bachchan being an example.”
While Ms Nanda takes home an annual commission income of more than Rs 1 crore, with last year’s figures pegged at Rs 1.33 crore, Nikhil Nanda mustered Rs 1.88 lakh, and Shweta Nanda, Rs 55,000. Archana Bhalerao walked away with Rs 5.37 lakh for the year, 2000-2001.
However, from LIC’s point of view, there is no premium on celebrity status. “The institution is more interested in enabling agents to become celebrities in insurance salesmanship,” says Mr Singh. Elaborating further, he says the celebrities have different priorities and they are not adept at providing after-sales service.
He points out obliquely that they are more interested in FPI and the commission that accrues from the premia.
However, becoming an LIC agent is not as easy as it used to be. As per the IRDA guidelines formulated last year, aspirants have to undergo 100 hours of training before getting a licence. After that, they have to pass a pre-licensing test conducted by the Insurance Institute of India, Mumbai, then an interview.
Only then can they get the licence, which is issued by IRDA.“The thrust is to infuse professionalism amongst the agents so that they can sell need-based products and render post-sales service,” concludes Mr Singh.