Job Series (Part 2): Insurance sheds 5 lakh jobs as companies look beyond basic skills

As NDA 2 gears up for its first Union Budget, all eyes will be on first time Finance Minister Nirmala Sitharaman. She has her plate full, laden with issues like farm distress, sluggish investment cycle, flagging exports, among others. But on top of the heap will be the issue of jobs, and lack of employment opportunities for India's burgeoning young population.

The problem is not merely about enough jobs not being created. In some of the industries, the crisis is also due to a sluggish response to structural changes, leaving many jobless.

In a four-part series, Moneycontrol looks at how some of the major sectors of the Indian economy are faring.

Amitav Ghosh has been an insurance agent, of the ‘traditional’ make. For 30 years, he has been selling insurance policies in Kolkata. But despite the experience and clientele, Ghosh now finds himself without a job. And that is because the 52-year-old is not comfortable using a tablet, and does not have the requisite technical experience to sell policies using digital devices.

In India’s insurance sector, there are several thousand who have faced the same fate as Ghosh.

The insurance industry employs around 1.3 million people. With the change in time, privatisation had led to companies with more tech-focussed mindset come into the sector.

Shailesh Singh, Director and Chief People Officer, Max Life Insurance says that employers in the insurance industry are looking to hire someone that have a mix of hard and soft skills.

For instance, he said that from a functional standpoint, skills such as technical knowledge, communication, customer service, are critical for a sales profile. On the other hand, emotional intelligence to understand people’s needs and creating solutions for evolving customer needs is an added skill that is becoming increasingly sought after.

“In addition, digital skills and orientation are clearly much more in demand today across functions,” said Singh.

Not just about tech

Given the change, it is not a surprise that about 500,000 jobs have already been lost in the sector in the last five years. These are not just insurance agents, but also brokers and the sales-force staff.

It’s not only technology that is leaving brokers out of business. But regulation.

“Certain insurance broking entities feel that they can demand a premium for the services offered. With a heavy crackdown by the regulator on brokers who overcharge insurers or push a product of one insurer, many are having to exit the space. Jobs will automatically be lost because of this,” said the chief distribution officer of a mid-size life insurer.

In the last five to seven years, say industry observers, up to 40 brokers have closed shop.

Now there is a zero-tolerance for any misspelling, or selling products assuring higher-than-sustainable returns. The unit-linked insurance product (Ulip) era prior to September 2010 led to a trust deficit in the insurance sector. Customers have been vary of purchasing products, hence insurers want to ensure that they get the right people on the front to sell.

Insurance Regulatory and Development Authority of India (IRDAI) is taking stringent action against those indulging in malpractices. Fines are a given but in several cases the regulator has cancelled the licence of brokers.

The sales guy conundrum

A different scenario is panning out when it comes to the sales staff.

IRDAI allows each insurance company to decide on the production targets for these individuals. While a lot of hand-holding is still provided by each company, persistency and quality of sales is the primary focus.

It is not just sufficient to sell policies, but also ensure that the policyholder stays invested till the end of the policy term. Those who are not able to maintain this quality in sales have been looked over for others.

Separately, insurers are also more open to hiring from other industries so that there is varied choice of experience.

Earlier, the norm was to hire an insurance executive from within the industry, as he or she would be aware of the products. This was important because, unlike banking that has need-based financial products, insurance had push-product that were a discretionary expense.

However, Singh said that today most companies in the league have understood the need to unlock potential from diverse industries. He explained that most have departed from an industry-focused approach to attract talent from multiple arenas to create more value-added roles, enhance efficiency and optimise the workforce.

Unconventional roles have also opened up. For instance, Star Health and Allied Insurance, which is a standalone health insurance company, realised that they couldn’t find too many MBBS doctors for the job positions. These doctors help proper diagnosis and also offer second opinions for the policyholders.

Dr S Prakash, joint managing director, Star Health and Allied Insurance said, “We could not have all our medical personnel to be qualified MBBS doctors. Hence, we are now hiring paramedical professionals and teach them the basics about insurance and medicine. We have about 70 doctors and 120 plus paramedical staff.”

For newer companies, the talent is being roped in from allied sectors. Amrit Jaidka Arora, head of human resources, Digit Insurance, said that they hired people on a 50-50 mix of insurance and non-insurance backgrounds.

“While our core staff is from the insurance sector, our strategy team is from consulting and e-commerce firms and our technology team is from product development firms,” added Arora.

But it is not all grim for those like Ghosh who are not tech-savvy. All insurance companies are ready to spend on upskilling talent, as long as they are the right age and ready to learn. Compared to less than 2 percent earlier, insurers are spending 5-7 percent of their income on training the staff.

How new profiles are being created

While the staid jobs may be drying up in the industry, newer ones are opening up. Insurance for the longest time meant sales staff and agents. But now, even engineers and doctors are in high demand.

Apart from doctors that are in demand, engineers, product managers, data analysts are also in demand. Interestingly, life insurers are also contemplating hiring criminologists on their rolls to ensure that any potential fraud or criminal activity is spotted at the right now.

Priya Vasudevan, President-Human Resources, Liberty General Insurance, said that the company looks for both behavioural and technical skills. She added that on the technical side, the company looks for data, analytics, digital and project management skills.

Those are shy of adopting digital technology will clearly be left out in this battle. Most insurance companies sell through digital devices or through the online channel. The era of insurance salespersons carrying a calculator making complex transactions is over. Now a handheld devices does a need analysis and offers a product.

Hence, the need for talent has also evolved. Ruben Selvadoray, Chief Human Resources Officer, Bajaj Allianz Life Insurance said that the environment is more digital, social and hyper-connected. Hence they are in a constant lookout for candidates who have a digital exposure and an analytics mindset.

“Earlier people were hired for analysis now the skill required is analytics,” he added. Data analysis refers to the process of compiling and analysing data to support a problem or decision, whereas data analytics includes the tools and techniques that used to solve a problem or take a decision.

The idea is to not just hire talent that is relevant for the industry but also to enable skill development programmes.

For instance, at Digit, Arora said that they run multiple trainee programmes. These include management trainee, graduate trainee, engineer trainee and diploma trainee.

When it comes to fresh pass-outs from college who are equipped with skills like Java, Artificial Intelligence and Data Science, sectors like IT are not the only option. Insurance companies like Digit are more than willing to lap up this talent.