The opportunities in insurance

FOR LONG, anybody making enquiries about a career in insurance would have been looked at with disbelief and, maybe, scorn. But all that has changed with the entry of private insurance players. The new players (currently 10) are looking at, on an average, anywhere between 10,000 and 15,000 people each over the next two years. Hence the opportunity is immense. "One must understand that insurance as a profession has a lot in store and one should not treat it as a job alone," says Vinod Sahghal, executive vice president, Jardine Lloyd Thomson. The career path in a new industry is far more flexible than an already existing industry as has been demonstrated by the new economy companies.

Why is it so hot?
A new industry always attracts people from different quarters. "It is like the privatization of banks. There will be many people who will see opportunity in insurance and make a shift but, the entry level will see many takers," feels J.M. Sawhney, executive director (programmes), RNIS College of Insurance. An ex-LIC man himself, the insurance college that he heads is abuzz with activity of would-be agents undergoing the training programme as specified by IRDA (the Insurance Regulatory and Development Authority). The fact that the training cost is borne by the company on whose rolls the agents are, is indicative of how serious the private insurers are. For the agents, nomenclature too seems to have adopted a serious tag with -- an agent is referred to as a consultant or advisor by the private players. However, everything is not as rosy as it sounds since, initially the money will be less though the insurance companies are willing to support the agents during this phase with additional incomes for minimal sustenance.

The pre-requisites
Though the regulator has provided a minimal qualification that stops at high school and secondary school level, the private players are looking beyond. "We are looking at graduates and post graduates too. It does not mean that we will not look at others. It is just that certain attributes need to be inherent with the applicant and that will benefit them in their approach towards work," says Rajdeep Lalvani, head of training, ING Insurance. The approach seems to be the same with other players such as HDFC and ICICI Prudential. "Our efforts have been to look at traits like a pleasing personality, understanding of financial instruments, good communication skills are what we are looking at, comments the spokesperson for HDFC Life Insurance. A graduation in science or commerce with a good command over the language will help and a well-knit social circuit will help too. With the limit on commission specified by IRDA (see table below)

Prospects
The options for these entry-level consultants/advisors depend on what additional skill-sets they acquire, but the career options and the various stages they go through are outlined below. "With the passage of time these entry-level executives will be imparted with training in other fields too and this will help them decide on continuing with sales as and agency head or broker or continue with the back end operations of the company," comments Sharad Misra, head of marketing and indirect sales, ING Insurance. This is how it flows:

Stage 1: Entry as an agent/advisor

Stage 2: Sales Manager

Stage 3: Branch Officer Company Affairs

Stage 4: Agency Head (managing agents)

Stage 5: Financial Consultant (selling various financial instruments)

And, what with each individual allowed representing one life and one non-life insurance company the opportunities are immense. There is already the likelihood of international affiliations and qualifying standards that will benefit, LOMA (Life Office Management Association) and LUTC (Life Underwriter Training Council) are amongst the well-known standards practiced internationally.

The challenges
Insurance is a career where one can really make a difference in the lives of the clients. Selling risk or a promise is a tough task but it is not as tough as one perceives. The more one looks into the needs of a client, the more one learns. The entire approach is like running one’s own business, and with the additional training that the private players are insisting on, each one is likely to be his/her own boss, running their own business and controlling their time. One can choose the clientele and work only with people whom one is comfortable with. Successful professionals are truly in business for themselves but without many of the headaches often experienced by others. The cost of getting started is minimal with companies providing financial incentives, training and coaching support. The first-mover advantage is another aspect that can be tapped by the early adopters.

The learning curve
"Like in the west, it will not be too far before one has individuals selling a bouquet of financial products and insurance will become one among them," feels Antony Jacob, deputy managing director, Royal Sundaram. In fact, insurance companies are awaiting guidelines for brokers, especially in the non-life sector where the possibility of banks and other financial I agencies as intermediaries is a better proposition. If one goes by the trends in the west one can look forward to become a CFP (Certified Financial Planners) who can plan the investing and savings need of the clients. Currently there are very few such professionals but many chartered accountants act as such analysts, the need for such professionals is likely to grow in the future.

The following table illustrates how commissions work. The assumptions made are:
Age of life: 35 years
Sum assured: Rs 200,000
Term of insurance: 20 years
Term of premium payment: 20 years

Note: This calculation has been made on the basis of existing products in the market and is only indicative.

Click here to access the guidelines for agents, list of agent-training Insurance Institutes in India, the course contents and the forms that agents normally require. n

The author can be contacted at narayan@iinvestor.com