High churn hits life insurance

The highest employee turnout is at the financial advisors (agent) level where the entry barriers are low but targets and work pressure is very high. However, as Sunil Mehta, country manager, Tata AIG points out, “The industry today is more at an attraction stage, we are also attracting a lot of talent from banking, FMCG, BPO-ITES industries. So at this moment, I think there is more attraction than attrition.”

Indeed, while retaining employees may be a problem, attracting fresh meat into the business is still relatively easy. The slowdown in the FMCG and consumer durable sector and the vast army trained by direct marketing companies like Amway and Oriflame too finds its way into selling insurance. But, says Subhro Mitra, head (HR) ICICI Prudential Life Insurance, “You cannot hold on to people, we have also lost people, especially among frontline sales force, and I am sure this will rise as the market matures as this is the first time that people are actually experiencing great money coming in.”

Mitra puts the industry attrition rates at between 32 to 36 per cent. According to Watson Wyatt, a leading consultancy firm which specialises in human capital and financial management, the insurance industry currently faces up to 20.9 per cent attrition rate across the board. And the figure is rising. “This could double to almost 42 per cent and even touch 60 per cent in the coming few years. We are moving from a monopolistic market to a free market,” says Sanjay Bharwani, country manager of Watson Wyatt.

So how are firms dealing with this attrition? “Life insurance is a very people-oriented business,” says Prashant P Khambaswadkar, head (HR and Admin), HDFC Standard Life insurance, admitting that attrition rates are at 14 per cent. “You have to go beyond just a brand now, you have to give these people careers,” he adds. In fact, most players today are doing just that, helping the employees grow with the market. Meanwhile, the attrition continues.