Agency Leader - No Business Asset

NOT EMPLOYEE
Life insurance agent (Unit Manager and Agency Manager) are representative of life insurer. This is clearly defined in the life insurance agent (and agency) agreement between life insurer and agent (Unit Manager & Agency Manager). Life insurance agents are representative of life insurer (principal).

BUSINESSMAN
Life insurer prefers to classified life insurance agents as businessman. The most common tagline when recriting new agent is, "Businessman - your income is unlimited, flexible time and you are your own Boss". Is life insurance agent a businessman???

OWNER OF HOTEL
I know of an entrepreneur that owns a chain of hotels. As a businessman (owner of hotels) - he have 2 main source of income from hotels. The first main income is from renting hotel rooms to customers. This is business revenue. The second main income is derived from capital appreciation of his hotel buildings and land. Business Assets are much more valuable than Business Revenues.

BUSINESS ASSETS
Buildings and lands purchased over a period of time appreciate significantly in value. A Businessman have the following options on his own business assets
1: Hire CEO (Managers) to manage the chain of hotels
2: Appoint his Children to manage the chain of hotels
3: Sell his chain of hotels

LIFE INSURANCE AGENCY MEMBERS
Life insurance agency members are perceived by life insurers to be "businessman". As a businessman - the first main income are commissions & overridings. Business Assets of the Life insurance agency members would consist of his policyholders, agents, unit managers and agency managers. However, in the event an agency manager  - passed away, suffers total & permanent disability or suffers critical illnesses - he is not able to do the followings:-
1: Hire CEO (Managers) to manage his agency
2: Appoint his Children to manage his agency
3: Sell his agency

CREATING BUSINESS ASSETS IN LIFE INSURANCE AGENCY
Creating Business Assets in Life Insurance Agency is not impossible. Such agency model have long been operating in developed countries like USA and Europe. Even developing countries like India and China offer similar opportunity. Fortunately, there is a growing awareness plus a minority of Malaysian agency members migrating to an alternative agency model that offers them an opportunity to build Business Assets in addition to Business Revenues.

BUSINESS MOTIVATION
Take 2 scenarios. If our Government were to offer Ahmad and Ali a piece of land each. Ahmad is awarded a TOL (Temporary Occupation Land) over 30 years. Ahmad has to return this TOL to the government at the end of the term. Ali is awarded a permanent freehold land.

Ahmad will develop his land based on the presumptions that it is temporary. He will probably invest the minimum ie planting cash crop like water-melon, sugar-cane, banana etc. This is similar to our existing traditional agency model where agency leaders are not able to build up his/her Business Assets thus discouraged him/her from building a long-term permanent business.

Ali will probably invest his resources on a more permanent basis like building, factory etc. Agency Leaders - must evolve to attract talented entrepreneurs to join our business. Offer talented Entrepreneurs the opportunity to develop and own his/her own permanent land - ie Business Assets.