Forty-year-old Vijay Kumar, a regional head at a private sector life insurance company, quit his job two months ago after a 10-year stint with the firm.
Every three months, the number of policies Kumar and his colleagues were asked to sell would go up, till it reached a point when targets became almost impossible to achieve.
In September, staring at the prospect of yet another failure to meet the target, Kumar decided to quit rather than get chided. He now swears to never return to the sector.
Like Kumar, thousands of employees are leaving the private insurance sector as companies feel the heat of sliding growth and rising costs with premium collection dropping.An estimated 10,000 people have quit the sector in the past two years and one out of every three is scouting for options outside the industry, head-hunters and industry insiders say.
“The morale among employees is down and most of them are looking out for jobs. Hiring is limited and the boom we experienced during 2000 to 2010 is over,” says a senior executive at a mid-sized insurance firm.
Growth in fresh policy sales plunged after sector watchdog Insurance Regulatory Development Authority enforced a new set of norms in September 2010 for the controversial Unit Linked Insurance Products (ULIPs). The norms benefit consumers, but reduce profitability of companies.
The sale of ULIPs — a hybrid product where part of the money is invested in equities and balance set aside as premium and charges and fees — typically constituted 30% of the total premium collection in 2009-10. But sales have fallen sharply since the norms came into force.
Fresh graduates are also shying away from joining the industry that was offering jobs in thousands not too long ago.
“The attrition rate in the sector has doubled and is more than 40% after the sector took a regulatory hit,” says Manish Sabharwal, chairman of staffing firm TeamLease.
Experts do not foresee a quick turnaround in the sector.
“This situation is not going to improve in the short term. Most employees in the sector are looking to switch jobs,” says V Suresh, executive vice president, Naukri.com.