Sources say the life insurance industry has lost over 2.5 lakh agents between December 2009 and December 2010, report CNBC-TV18 Avni Raja and Shruti Rajkumar.

Lower recruitment and high attrition. That's the latest double-whammy the insurance industry is reeling from. In one year, the life insurance industry's agency force has shrunk by more than 2.73 lakh agents. Of this the private players have lost about 2.1 lakh agents while life insurance giant LIC has lost almost 63,000 agents.
Industry sources blame this on one main reason: An IRDA mandate that all agents go through an online training program -- the move has hit agent recruitment in rural areas, especially because the number of training centres have also been reduced. This fall in recruitment is a problem for insurance companies, since they have to ensure that 18% of their premium comes from rural areas.

But what's hurting companies more is that this fall in recruitment comes even as they cut costs by downsizing their agency force -- essential, if profitability is to survive.