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  Insure success  
  By Charandeep Singh

WITH a huge population base and large untapped market, insurance industry is a big 'opportunity area' in India for national as well as foreign investors.

India is the fifth largest life insurance market in the emerging insurance economies globally, growing at 15-20 per cent annually. This impressive growth in the market has been driven by liberalisation, with new players significantly enhancing product awareness and promoting consumer education and information. The strong growth potential of the country has also made international players to look at the Indian insurance market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players


The World Insurance Report of 2009 describes the penetration of life insurance in India as 'still woefully low'. India had 16 per cent of the world population, but only 1.68 per cent of the world life insurance market in 2008. A mere 20 per cent of the insurable population aged 20 to 60 years is currently covered by life insurance. The average number of policies held by per Indian consumer is just 1.33 as against 5.2 policies per consumer in mature markets. As we can see from the numbers, the potential for expansion of the market is huge especially with rising per capita income and a growing middle class that is expected to constitute 32 per cent of the total population in 2010. The insurance penetration levels as a percentage of GDP is expected to grow to 6 per cent by 2012 from the current 4.8 per cent which would translate to a CAGR of 13 per cent for the industry in the next five years.

Insurance companies in the developed world, where insurance has a much higher penetration, realise the huge potential of insurance industry in India. Add to it the fact that the possibility of Foreign Direct Investment (FDI) cap in the sector rising up to 49 per cent and we have just another factor that holds promise of leading the growth in this industry. Although currently FDI is capped at 26 per cent, it's expected to be raised soon. This will result in increased investment by foreign companies, especially by the foreign partners of private life insurance companies.


A person with "Courage of Conviction" can be a golden resource for selling insurance products. Job opportunities offered by insurance companies are myriad. Since, the industry is predominantly manpower centric. The thumb rule in insurance is "More the Merrier" According to M.S. Sidhu, former National Head Corporate Business Bajaj Allianz, "To have maximum fleet on street pays, as it increases the number of distribution hands, and only training cost is involved. So, it is an inexpensive proposition as well". It works on a simple adage, more the number of "distributing hands" in the market the higher is the revenue generation. So the requirement of human resources is abundant.

Jobs in insurance sector are basically characterised in two categories -- firstly, those who are on the payrolls of the companies and are permanent employees. Second category is that of the part timers. Those who are on the payrolls are the distribution managers. Basically, the manager, the sales team are the first line managers.

Candidates with good leadership abilities, apart from excellent networking skills, are the ones who are most successfull in this job.

For the job of the distribution manager most of the companies scout for local talent. According to U.S. Samundri, Senior Divisional Manager with Bajaj Allianz, "Since one of the important job requirement of the distribution manager is to recruit and if the person is an outsider having no local know how, he won't be able to have quality people in his team". These candidates get internal promotions and apart from their basic salary package companies float good incentive schemes through which their income levels go up, and they touch higher echelons of their insurance career.

The backbone of the insurance industry are the financial advisors associated with each organisation. They are the ones who constitute the sales team of distribution managers. They are the part timers. Normally people with good social contacts, homemakers, retired persons and sometimes youngsters who have a strong desire to earn money, are the ones whom the companies associate with them as financial advisors.

Summing up the job fitment of Insurance advisors, Jatinder Sandhu, Location Head with leading Life Insurance Company, says, "We want greedy people not needy people as our advisor force". Companies have extensive and elaborate reward and recognition programmes to keep the their advisor force upbeat, which can be in the form of doling out extra money, to higher percentages of commissions to organising foreign junkets for their star performers.

ING Life Insurance has launched a special module for its consistent performers where by advisers who perform consistently for two years, will be able to have a team of advisors reporting to them and then they are designated as Financial Consultants.

Alternate avenues

These days banking institutions have also become very proactive in selling insurance; since it is high profit earning franchise or them. So there is channel, which is called Banc assurance channel in which banks have tie-ups with specific life insurance companies and they sell the insurance products of those companies with which they have a tie up with. The modus operandi with which the banc assurance channel works is that insurance companies give dedicated resources to the bank, and they use the database of the account holders of the bank to further life insurance proposition to them.

Another model on which the life insurance companies work these days is called the alternate model. In this model the insurance companies give franchise to individual units.

“It is a high profit-sharing model in which the salary of the resource persons is borne by the insurance companies and the profits generated in lieu of the sales of insurance products is shared between the company and the franchisee holder,” quips Sharat Kapoor, senior executive with a leading life insurance company.

The days ahead

The Indian Insurance sector is a colossal one and is growing at the rate of 15-20 per cent Insurance adds to about 6 per cent of India's GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long-term funds for infrastructure development at the same time strengthening the risk taking ability of the country." India with its huge population of over1.2 billion and poor coverage of only 35 per cent of insurable potential has a long way to go” says Dr Pritam, former Executive Director with Life Insurance Corporation of India.

Opportunities galore

The advent of globalisation has given rise to competition amongst the life insurance players. With as many as 23 Life insurance companies operating in India, the consumer has myriad choices to fill his product portfolio. Similarly, when these companies operate in India, they require human resources to operate which leads to employmentgeneration. More jobs on offer result in high per capita income, which will lead to the overall development of country.

With an annual growth rate of 15-20 per cent and the largest number of life insurance policies in force, the potential of life insurance industry in India is huge. Foreign companies that are interested in FDI have deeper pockets compared to the relatively small Indian insurance companies. They bring with themselves the 'best practices' distilled through years of rich experience that they have had in this industry. This augurs well for the insurance sector because the deep pockets and ‘best practices' of foreign partners can be dovetailed with the awareness of the Indian psyche and marketing experience, of their Indian counterparts to create a synergy, which can increase the reach of insurance in India making it more egalitarian. All these companies when the set up their Joint Ventures in India they need educated human resources to work for them. This reduces the white collared unemployment.

Insurance is one industry, which is highly manpower centric, so these companies serve as high employment generation centres. With India being an agrarian set up, and not very vastly urbanised, in order to shore up their revenues the companies have given a bigger thrust on rural penetration. Most of the life insurance organisations are setting up more and more offices in rural India and thus, generating employment avenues for the rural youth. With this trend, rural youth also has a chance to get an exposure to the Corporate Culture. Thus when they move to other cities for better prospects this exposure comes handy for them. (Courtesy: The Tribune)
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