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Job-opportunities in the life insurance sector are likely to be bleak this year as insurance companies are focussing on significant reduction in costs.
Since August 2010, life insurers have been on a drive to control expenses due to multiple reasons and this is expected to have a bearing on new jobs in the sector.
“The cost-cuts in the form of rationalisation of offices, employees and agents are because of the Insurance Regulatory and Development Authority's directives,” Mr S. B. Mathur, Secretary-General, Life Insurance Council, told Business Line .
In August, the IRDA had put in place stringent regulations on management of expenses. The new regulatory regime for Unit-Linked Insurance Plans (ULIPs), which resulted in withdrawal of over 270 products from the market, also made life insurance business sluggish.
This had resulted in massive downsizing of the workforce and infrastructure.
Falling numbers
According to Life Insurance Council data, the number of employees working in life insurance companies decreased from 3.67 lakh in FY-10 to 2.42 lakh in FY-11.
Similarly, individual agents too declined from 29.78 lakh to 26.47 lakh during 2010-11 compared with the previous year.
“Cost efficiency is a continuous journey and recruitment had become more focussed now,” said Mr Sandeep Bakshi, MD and CEO, ICICI Prudential Life Insurance Company Ltd.
The cost-cutting in the sector could be in the form of combining locations for operations and changes in employee/agency management (instead of 1:10 employee span in a unit it could be 1:6, for instance), he added.
“The new technology-based initiatives like demating of insurance polices will also have an impact on human resource management,” Mr Bakshi said.
While not commenting on new job creation, Mr Suresh Mahalingam, Managing Director, Tata AIG, said there might not, however, be any further job-losses in the industry going forward.
At present, there are 24 life insurance companies in the country with a total branch network of 11,465 (12,018 last year).
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