Interview with Mr Sohal Lal Kadel, President, Insurance Brokers Association of India as published in The Insurance Times Journal
1. After liberalisation it was expected that the number of insurance brokers in India would grow very rapidly. However till date there are only 285 registered brokers in India. Do you think this number is sufficient to cater the all India market. Also many brokers are opting not to renew their license. Can you highlight the reasons.
–   Number of 285 brokers is not sufficient. To penetrate the insurance it has to go up. Many states do not have even one broker registered in the state. At many places Retired / VRS taken officers from insurance industries are not available. IRDA also has to take a lenient view in issuing Brokers License. It is also true that many brokers are opting out.  At the time of applying for the license the industry was seen very lucrative but due to De-Tariffing in all segments and due to unhealthy cut throat completion among the insurers the broking at present does not looking lucrative. This may the reason for opting out.
2. Getting a new broker’s license in India is quite time consuming. Do you think the process must be simplified so that more companies can be attracted towards this profession.
– Â Â Yes, I agree with you.
3. How do you feel the insurance brokers can reposition themselves in this changed environment.
–   On thing is clear that in last 10 years some awareness has come in the country. Liability segment may be more attractive. We have seen AMRI accident, Mumbai terrorist accident. Besides this, I am of the view with my own experience that once a corporate get a taste of experienced brokers service he would not discontinue the service of brokers.
4. Do you think the excessive competition is taking the toll of providing quality services by the brokers. Instead of providing cover on merit basis, the brokers are mostly competing on prices and as a result they are not able to provide comprehensive service.
– Â Â Yes I agree.
5. IRDA has recently allowed the brokers for insurance consultancy on a limited basis. Do you think this limit should be removed and brokers should be allowed to do consultancy without any restriction so that they can share their expertise and lower the operating expenses.
–   IBAI was requesting to IRDA on this matter since very long. I feel that at the time of framing the Rules for brokers there should not have the condition that broker cannot provide the claim consultancy where the policy has been not issued under their code. Even after 9-10 years of existence of brokers, the market share is hardly 20 – 25% with the brokers. As per regulation broker represent the insured. The IRDA should have given the opportunity to the insured to use broker service. However, we are thankful to IRDA to consider our request to make a beginning. I do hope that Authority will remove all restrictions very soon.
6. Do you think Sub brokers should be allowed?
– Â Â Yes. The IBAI is vigorously following IRDA to allow Sub Broking.
7. What steps are being taken by IBAI to make the consumers aware about the role of brokers so that their reach may increase.
-Â Â Â Â IBAI is using platform provided by many chambers of commerce and industry to propagate the services provided by brokers. We also taking help of print as well as electronic media to spread the message to insuring public.
8. Do you think IBAI should introduce Continuous Professional Development program as in case of other professional institutes so that the broker members are aware of the latest developments in the insurance industry in India.
– Â Â Yes, we are working in this direction.
9. The cost of training in case of brokers is very high in comparison to insurance agents training. Do you think it should be reduced.
Yes
10. It is it is being heard that IBAI has been allowed to partner with IRDA recognised training institutes to impart renewal training. Your comments
–   We are thankful to IRDA that they have agreed for this request. We also do hope that in near future we will have more partners in this segment.
11. Do you think the insurance brokers should also position themselves as Risk Management consultants and advise the corporates to go for full insurance of assets and employees in order to safeguard the interest of shareholders rather than to suggest for the lowest quote for the properties to be insured.( Sometimes properties undervalued/some risks are removed to lower the insurance premium)
–   This is the fundamental obligation of a broker to provide this service. Otherwise what is the difference between an Agent and a Broker? Most of the properties are insured at Depreciated value.
It is the duty of broker to make insured to understand the consequence of under insurance. Â I am of view that the SEBI should insist the insured to get a certificate from Broker that they have insured their asset at Reinstated value and taken all the insurance coverage to cover their asset as well as liability.
12. Â Any other thing you’d like to comment upon
–   I feel that future of brokers is very bright. It is temporary phase to suffer due to cut throat competition among the insurer.
