Talent Shortage in Insurance Industry

 | April 04,2011 10:40 am IST

Paradoxical as it may sound, India, the outsourcing hub, is facing a talent crunch today! And one of the most highlighted sector-victim of the present times is the Insurance industry. These days, there is a shortage of 'critical talent' in the insurance industry - the talent that drives a disproportionate share in a company's business performance.

Depending on an insurer's business strategy and model, these can be underwriters, claim adjusters, sales professionals, actuaries, and others, who can make the difference between 10 percent and 20 percent annual growth.


According to the Darwin Rhodes Group, India's only specialist insurance recruitment company, the liberalization of India's insurance sector has created enormous demand for talented actuarial and insurance specialists.


CEO, Peter Dunphy of Darwin Rhodes Group, speaking at the 10th Global Conference of Actuaries in Mumbai, noted that India's insurance industry has changed significantly in the past two years, as a range of global European and US insurance companies have been launched in Mumbai and Delhi. Previously depressed salary rates, limited employee movement and low penetration in the insurance sector have been replaced with a boom in demand for talented insurance specialists.


Thinking in line with Dunphy's words, one must understand that in the insurance industry, convergence, globalization, and consolidation - as well as new technologies and changing demographics - are impacting the pace and level of change. As a result, insurance companies will be challenged to remain competitive, and ultimately, to thrive. Having talent that can both adapt to change and meet customer demands, must become a priority.


Insurance companies continue to face challenges in both recruiting skilled professionals and fully developing home-grown talent. The present situation in India's insurance sector is a welcome development as it enhances the strength of employers as well as the career opportunities of insurance industry professionals. However, there is still a lack of qualified talent to take many positions as actuaries and insurance specialists which is currently skewing the demand-supply.


With the health and pension sectors opening up, experts hold that the insurance industry would require at least 100-150 actuaries. Currently, the country has just 50 certified actuaries and only two qualify as actuaries every year. Actuaries are professionals who do the maths to design insurance policies. If they go wrong, an insurance company could go out of business, paying out unanticipated claims.

The lack of talent is due to higher growth in the insurance industry. In fact, it will need twice the number of actuarial talent needed today, within the next two years. That sort of demand will be really tough to meet, because passing actuarial exams is almost like graduating in medicine: it takes about 4-6 years to do so. The long-term nature of the insurance industry requires an actuary to design products, which remain relevant even after long periods. This depends a lot on actuarial skills and makes this job unique. IIT-ians with their formidable maths skills are assistants to appointed actuaries. But that's the same talent pool which is accessed by IT, finance services, and basically everybody else. One solution to this problem of shrunken pool that has worked out, is, the hiring of actuarial talent from foreign companies.


The qualifications and the skill-sets needed for an insurance specialist depend on the work profile one is interested in. For marketing and sales, an MBA qualification from a reputed institute is preferable. Graduates with the right aptitude and the aggression to meet stiff sales targets often are well sought after for this role. In addition, product knowledge and the ability to drive a team of insurance intermediaries is a must. While for actuarial functions, the candidate should have the required qualification from the Actuarial Society of India, and should be very good at mathematics. For all other operational roles, apart from the specific skill-sets required for that particular function such as finance and accounting, legal and compliance, basic knowledge on the life insurance industry is a must.


To have their kind of quality professionals, companies are now taking up the responsibility and fending for themselves! Some companies have resorted to setting up own education institutions. ICICI Bank has collaborated with NIIT to set-up the Institute of Finance Banking & Insurance (IFBI) - to churn out about 100,000 trained professionals over the next three years.


Ms. Hasitha Krishnan, Chief Executive Officer, Ma Foi Global Search Services Ltd., says, "Insurance advisors are in big demand especially in rural areas. All global insurance majors are keen on having joint ventures with Indian companies. The rural thrust in business strategies has to be driven by large manpower." This makes it amply clear that the biggest challenge lying ahead is the manpower crunch.


In one way, it is good news for India that in the case where population is increasing and employment is getting scarce, insurance sector could come to rescue. Interestingly, there could be more jobs for locals.