It may not feel like it today but there is a coming talent crisis in the insurance industry. The impending baby boomer retirements over the next 15 years just might be the biggest challenge the industry will face.
In a discussion on the above I agreed with one of my friends, Alden Richards, and appreciated most of what he said as follows.
Innovations is the key to the future.
Accept the insurance industry's deteriorating image vis-a-vis consumers.
No organic change. No innovation.
The insurer-broker-agent model is passe. Like dealers of used cars.
Given competition, the industry has a penchant for duplicity. India didn't have any competition in insurance post-independence for 53 years! The government ruled.
The insurers running out of ideas.
My points:
An update on India. Wherever I have been to the remotest of places (I have travelled a lot pan India) I saw a board of LIC. Or may be SBI. How much of the country and population the insurers been able to cover? On world averages India ranks 78th in terms of insurance density and 54th in terms of insurance penetration. Mind you these are 2006-07 figures. You can check out http://www.indiastat.com/searchresult.aspx for more details.
Insurance Penetration and Insurance Density are two important indicators of the potential and performance of the insurance sector. Insurance penetration is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP), while insurance density is measured as the ratio of premium underwritten in a given year to the total population.
The life insurance penetration in India increased from 1.77 per cent in 2000 to 4.10 per cent in 2006, before declining to 4.0 per cent in 2007. The general insurance penetration increased from 0.55 per cent in 2000 to 0.60 per cent in 2006 and remained at the same level in 2007. The life insurance density which is premium per capita in US$ terms stood at US$ 40.4 in 2007 as against US$ 33.2 in 2006 and US$ 7.60 in 2000. The general insurance density was, however, lower at US$ 6.2 in 2007 (US$ 5.20 in 2006 and US$ 2.30 in 2000).
Source: http://indiabudget.nic.in/es2008-09/chapt2009/chap58.pdf
A lot of work left undone don't you think.
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