Thursday 26 May 2022

LIC: How the dead helped a salesman to become a star agent

 For decades, Bharat Parekh has scanned death notices in daily newspapers and staked out crematoriums in India's central city of Nagpur to sell life insurance, one of the world's oldest financial products.

"You don't need funeral invitations in India. You identify the bereaved family by the people carrying the bier. You approach relatives and friends of the deceased and introduce yourself. You tell them you are offering your free services to settle any claims on life insurance the dead person had. And you leave behind your visiting card," Mr Parekh says.

After the end of the customary mourning period, some families call him. But mostly he knocks on their doors. Mr Parekh makes sure that the death claim is settled in time. He finds out how the death has affected the family financially - are there unsettled debts, do they have adequate insurance, savings and investments?

"I understand death and its impact on families. I lost my father when I was very young."

Mr Parekh, 55, is one of 1.36 million agents of Life Insurance Corporation of India, the country's largest insurer. With 286 million policies and more than 100,000 employees, the 66-year-old state-owned behemoth - which has now made a much-hyped stock market debut - is a household name. More than 90% of its policies are sold by agents such as Mr Parekh.

Mr Parekh has hired more than 30 employees to run his business. Mansi Thapliyal

Mr Parekh is also one of the firm's star agents. He is an avuncular and neatly dressed man who speaks with the enthusiasm of a salesman and the zeal of a preacher of thrift. He has sold $324m (£248m) worth of life insurance, almost all of it in and around Nagpur, a city famous for its oranges. He says he "serves" some 40,000 policies - he earns commissions on nearly a third that he has actually sold. The rest he services - collecting premiums, settling claims - for free.

In a profession with no celebrities, Mr Parekh is one. Breathless media reports talk about him earning more than the chairman of the LIC. For nearly three decades, he has been a member of the Million Dollar Round Table, a group of the world's leading life insurance and financial services professionals. He's invited to talks at schools, colleges, banks and management schools. One of his motivational speeches, which he once sold on audio cassettes, is unabashedly titled: Meet the No. 1, Be the No. 1.

Thirty-five people work for Mr Parekh in his busy office, which offers a bouquet of financial services. Insurance, of course, comprises the bulk of his business. He lives in a sprawling apartment in an upscale neighbourhood with his wife, Babita, herself an insurance agent. One recent evening in Nagpur, Mr Parekh came to pick me up in his shiny new electric SUV, which he loves taking on long drives after 18-hour-work days. "Look, how fast she revs up," Mr Parekh said with childlike glee.

His rise has been swift as well. He has written a book, part memoir and part savings advisory. In it he quotes Walt Disney: "If you can dream it you can do it."

This is clearly a thought in hindsight. The son of a textile mill worker and a homemaker mother, Mr Parekh had literally no room to dream: he shared his family's rented one-room 200sqft home in a squalid neighbourhood with eight others, including his parents, four siblings and a widowed aunt. Life was tough: the siblings packed joss sticks into boxes to make both ends meet.

When he turned 18, Mr Parekh began selling insurance after his morning college classes. He would hire a cycle and cold call prospective clients, while his sister would look after the paperwork. His sales pitch was laced with homespun metaphors. "Life insurance is like a spare tyre when you have a puncture and your vehicle breaks down," he told a motor parts dealer, one of his first clients. He took out a policy and Mr Parekh earned 100 rupees (about $1.30; £1) as commission.

In the first six months, Mr Parekh sold six policies. At the end of his first year, he had earned about 15,000 rupees in commissions, which would go to keep the home. "It was difficult to sell life insurance. I would sometimes go home and cry," Mr Parekh recalled.

Insurance agents often have a bad reputation, and are regarded as vultures, preying on insecurities of clients. None of this has deterred Mr Parekh. Over the years he got smarter. He realised tracking the dead worked better than cold calling the living. His clients range from street vendors to businessmen. He forged relationships and networks.

One of Mr Parekh's clients is Basant Mohta, a fifth-generation textile mill owner, who works and lives 90km (55 miles) from Nagpur. He says 16 members of his joint family - at 88, his mother is the oldest and his year-old grandchild the youngest - have taken out life insurance through Mr Parekh. The two met on a flight. "I think life insurance is important. And more important is an agent you can fully trust and depend on," Mr Mohta says.

Mr Parekh believes part of his success is down to the fact that he has been ahead of the curve and spent on himself. He imported a Toshiba laptop from Singapore and computerised his records as early as 1995. He spent a fortune on getting finance training courses abroad. He bought one of the earliest mobile phone connections in India when call charges were prohibitive, and gave his employers pagers. He invested in an office, cloud-based technology and now has his own personal app. He puts up daily adverts in the obituary pages of local papers. He even sponsors fetes for children and their parents to "catch them young".

Indians have traditionally taken insurance to protect themselves against the risk of dying early and also for tax rebates and bonus pay-outs from the firm's profits. But times are changing. The LIC, by its own admission, is facing "stiff competition" from "mutual funds, bank deposits and small savings instruments, besides physical savings".

The insurer now plans to ramp up its digital presence, so that more clients can buy insurance online. Will this mean a diminishing role for people like Mr Parekh? "Not so," says Singarapu Srinivas, president of Life Insurance Agents Federation of India. "Agents will be always there. Selling life insurance requires face-to-face meetings with clients, who ask a lot of questions."

Mr Parekh welcomes the insurer's modernisation moves. "Business will grow further. And we will have more work to do," he says.

And it's a lot of work. For example, when Mr Parekh and his employees are not tracking down the dead, they are celebrating the living. After scanning death notices, he begins sending wishes to his clients on WhatsApp. "I have to send so many birthday, wedding anniversary greetings every day."

On the day we meet, he checks his phone and shows me what looks like a neat list of names, addresses, numbers and occasions. These are the 60 clients who are having their birthdays on the day, and 20 who are celebrating their wedding anniversaries. "I have to wish them all. Some I will send gifts," he says.

I ask him how he keeps track of the lives and moments of some 40,000 insurance policy holders.

"It's a secret," he says with a chuckle.

(Source: BBC)

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