China's life industry has seen the number of insurance agents more than double from 3.25 million in 2014 to 7.37 million in the first quarter of this year. This growth, however, belies statistics which show that the 13-month retention ratio stands at below 30%, warns Mr Zhang Yingbin, the Chairman of the Insurance Culture Media Group.
Equally worrying, the incomes of insurance agents are falling. He said that the average first year commissions (FYC) of an agent reported last year was less than CNY20,000 (US$2,940) but this is reported at less than CNY15,000 currently.
The declining trend has also affects higher tiers in the agency structure, with a director's average income tumbling from the CNY1.08 million reported last year to CNY490,000 this year; manager, from CNY397,000 last year to CNY247,000; and supervisor, from CNY73,000 last year to CNY47,000.
He said that the high attrition rate in the agency force means vast amounts are lost by insurance companies on subsidies for new recruits, training expenses, and agent registration fees. The loss is estimated at more than CNY104 billion a year. He said that the low retention rate also means millions of orphaned insurance policies.