 "irdai")
Even as reforms are initiated for the insurance sector to grow bigger, the insurance companies, both general and life, are facing hurdles, with the lack of human capital seen as a key challenge for them. One reason for this is that the talent pool has not grown the same way as the increase in the insurance companies.
Casparus Kromhout, managing director and chief executive officer (MD and CEO) of Shriram Life Insurance Company said, “Although the number of insurance players has increased over the last year, there haven’t been many talents from niche backgrounds such as actuarial science, underwriting, statistics, finance, and risk management.”
The number of life insurance companies in India stood at 23 in 2010, which currently stands at 24. Meanwhile, the non-life insurance companies, including the general insurer, rose to 33 in 2022 from 23 in 2010. The insurers believe that as much as skilled human capital is necessary across specialised areas like technology, underwriting, actuarial and data sciences, among others, at the same time, the workforce should also be skilled in customer-centric operations, agile sales and distribution to boost the business of insurance companies.
Voicing a similar opinion, Chinmay Adhikari, CHRO, Universal Sompo General Insurance, said, “The challenge lies not just in finding manpower for traditional roles but in securing adept professionals equipped to navigate the intricacies of a tech-driven future. The demand for skills is outpacing the conventional supply, emphasising the urgency to bridge this gap and forge a workforce ready to navigate the nuanced demands of the evolving insurance landscape.”
The Insurance Regulatory and Development Authority of India (Irdai) has taken several initiatives to boost the adoption of technology in the insurance space. The regulator continues to organise an ‘Open House’ on the 15th of every month for the fintech and insurtech companies.
The regulator also believes that insurance companies, aided by technological tools, could pivot towards paying certain claims in the near future without the policyholder having to file it.
“It is time for the insurance industry to reinvent and introduce more responsive tech-led avenues to cater to the needs of over 140 crore (1.4 billion) Indians and their businesses. It is time to become future ready,” Debasish Panda, Chairman, Irdai said during his address at the Global Fintech Fest (GFF) in September.
In October, at the 19th Insurance Summit 2023, Neelesh Garg, MD and CEO of Tata AIG General Insurance said, "The health insurance segment, the largest in the (general insurance) industry, saw increased awareness during the pandemic, but challenges persist, with two-thirds of individuals still self-insured in health and a significant portion of vehicles uninsured.”
“This industry needs fresh thinking and human capital to achieve 'Insurance for All' by 2047. Human capital is the most important raw material, and it is the training and retention of these that is key for the growth of the sector," Garg said.
Irdai is seeking to provide ‘Insurance for All’ by 2047, when every citizen will have appropriate life, health and property insurance coverage, and every enterprise will be supported by appropriate insurance solutions, besides making the Indian insurance sector attractive globally.
At the 19th Insurance Summit 2023, indicating the impact lack of skilled capital can have, B C Patnaik, Member (Life), Irdai, said, “Assets under management (AUM) face a challenge due to a lack of skilled individuals in marketing and relations. Most life insurance companies have asset values of less than Rs 10,000 crore, posing a significant hurdle. There has been a lack of investment in human personnel in the administrative and marketing wing of insurance companies. Recognising these challenges, institutes like National Insurance Academy (NIA) are called upon for support to build capability.”
According to Irdai’s Annual Report, as of the financial year ending in March 2022, the overall AUM of the insurance industry stood at Rs 55 trillion. Out of which, the AUM of the life insurance industry stood at Rs 50 trillion and the non-life industry was Rs 5 trillion.
Apart from these, lack of awareness is considered to be a key factor that withholds the growth of the insurance sector. Employees who can understand and effectively communicate it to the general public will help to further boost the penetration of the sector.
“The workforce can effectively educate and inform the public about the importance of insurance, clearing misconceptions and promoting its role in financial planning. Those equipped with insights into local customs, languages, and economic dynamics can effectively help in increasing the penetration and ensuring strategic outreach with underserved areas and connecting with potential customers,” said Adhikari of Universal Sompo General Insurance.
In a bid to counter the shortage of human capital, insurance companies are investing in employees by recruiting directly from campuses coupled with giving training to the new recruits and conducting exams to gauge their capability as it will aid in increasing their productivity.
“In the dynamic landscape of the insurance sector, brimming with growth potential, the complexity of the subject demands a skilled workforce to drive its widespread adoption. The biggest difficulty in the insurance sector is the war on talent. It has prompted us to explore alternative avenues, such as returning to campuses to cultivate fresh minds and internally nurture their skills,” said Rajive Kumaraswami, MD and CEO, Magma HDI General Insurance Company.
“In our recent onboarding of management trainees from non-insurance backgrounds, the employees have undergone comprehensive training and successfully cleared IIRM exams. Our commitment extends beyond recruitment,” Kumaraswami added.
Speaking on similar lines, Kromhut of Shriram Life Insurance Company noted, “We need to invest in employees, identify areas to scale productivity, build the right culture and ensure that we provide all the support to be successful, both professionally and personally. We also try to spot the trends early on and train people ahead of service rollouts.”
