What are agency problems What are some approaches to solving

What are agency problems? What are some approaches to solving them? do not copy paste

Solution

Great Question!

In Financial Industry business will be done in different models and Agency channel is one of it. Since I have worked as an Agency parnter with One of the Top Insurance company in India, I hope that my answer will be helpful to you.

There is different kind of Agnecy channels to distribute Financila Products like Fixed Deposits, Insurance, Mutual Funds and so on. I found some of the problems as below

1. Agency channels income depends on the sales volume. if there is no sales in that month then there is no income.

2. Since they will not get salary/ Fixed income from the Company, they will go through stress to generate business.

3. Agencies only concentrate on high volume of sales instead of knowledge and sharing, hence they are unable to spend time for the learning and development.

4. Agencies will work on commision basis and there is threat for commision rate flactuations due to competitors.

Ideal Approches to solve these problems

1. Agency channel should be treated as a partner with the company.

2. An attractive Income method will help the agencies to sustain long term. My approach is to provide them Fixed and Variable income (commision percentage).

3. There should be company\'s support in terms of Training and Development of Agencies.

Please let me know if your view on Agency is different from what I have answered here.