There are 24 life insurance companies in India and except a few, most companies are joint ventures with leading global insurers. It was expected that the foreign partners would bring their rich experience in managing the business and would encash the brand of the local entrepreneurs to rapidly grow in a relatively uncovered market with very high growth potential.
As expected the opening of the sector led to large scale employment generation. But after 13 years the scenario has drastically changed as the number of advisors is declining and the number of employees has also come down substantially. It would be interesting to examine the probable causes of this crisis and to explore the possible way out.
The brightest of all who joined the industry were appointed in leadership positions and they took upon themselves the task of launching a new era in life insurance. But since 2011 their role has become far more demanding and challenging because of the economic slowdown and major regulatory interventions.
Accountability seems to have been invoked selectively or the stakeholders have been consciously liberal for some reason known to them. As a result many of the industry leaders had the luxury of presiding over the companies in the best of the time and in the worst of the time.
The top executives were expected by both Indian and foreign promoters to set up business with long term perspective with due emphasis on establishing infrastructure and organising a well trained team to rapidly gain from the opportunity available. They were also expected to put in place innovative solutions for the discerning customers. In fact, the industry watchers expected them to fully transform the Indian insurance market.
Naturally, most of the CEOs of the initial phase devoted their time and energy on formulating strategy and providing vision to their companies. The strategies were focussed on leveraging technology to the fullest to give the customers an absolutely new experience and to take away from Life Insurance Corporation (LIC) the creamy layer of the market. It was believed at that time that the public sector had deprived the market of innovative