Some wonder if such a large amount of hiring is heightening the risk of mis-selling problems.
As the number of insurers takes off in China – particularly as the country has opened its doors to providers from other countries – has been taking off and this has caused the need for insurance agents to skyrocket.
The glut of hiring that has been occurring in the country is fantastic for people who want to work in the insurance industry.
That said, there are some experts in the industry who are forecasting that hiring so many insurance agents at such a rate could be problematic. Inexperienced agents who are working on commission have a higher risk of mis-selling policies. This activity could be expensive for both consumers and for the industry as a whole. At the moment, the Chinese insurance industry is still considered to be quite an immature one, as it has a penetration rate that is about half of the current figure in the United States. Moreover, it is only about a quarter of what Japan’s insurers currently cover.
That said, new regulations changes have opened the door for many more insurers and insurance agents.
Until now, insurance companies in China mainly met the growing demand for coverage in the country by offering their products through banks. That channel was reined in by regulators last year as a result of the assumption that inexperienced consumers had been making in thinking that the products should be considered to be as safe as bank deposits.
That caused a massive recruitment drive for filling insurance company jobs as these providers needed to be able to more effectively reach customers in a direct way. For instance, the largest insurer in the country, China Life Insurance Co., increased the size of its sales force by an estimated 28 percent in the first half of this year, alone. The second largest insurer boosted its own number of sellers by 25 percent. That company, Ping An, now employs about 800,000 agents.
That said, specialists in the industry are warning that if this level of growth of hiring insurance agents continues, particularly with a growing part-time workforce, the enthusiasm for earning commissions may outweigh their training and financial skills for matching consumers with the right products.