An industry can be called successful only after we see the status of all the stake holders. We saw how the employees and the sales force was feeling. Let us see something about the ‘customers’ and the ‘owners’.
The customers of the life insurance industry can be divided into 3 categories:
a. Those who understood what they bought, why they bought and what the policy will do for their families if they are not around.
b. Those who think they understood what they bought
c. Those who know that they do not understand what they bought.
In markets like India talking of %ages makes no sense. In category (a) there are about 10,000 people. All others are in b or c – which should run into millions if not crores. Financially speaking those in b and c think they have bought an investment product – they will be disappointed NOT BECAUSE the product is bad, but because they will jump ship at a horrid time to exit. So God save them.
Term insurance will pay ON DEATH. Some people have bought Term insurance – hoping to get ‘some’ return. Obvious disappointment awaits them.
The owners – I remember meeting some of them have all toned down. In fact to the best of my knowledge many sale mandates are out in the market – some at a discount too.
SBI, Icici, Hdfc, Kotak, Religare, etc. will also need to raise money from the equity markets to stop the bleeding. Funding Rs. 300 crores year on year is not easy even if your surname is the legendary Tata, Birla or Ambani!
So overall who is happy with the life insurance industry?
The early employees, a few vendors, people whose offices could be given on rent (landlords), hotels where conferences and trainings are held, the caterers (did you know IRDA even mandates the menu of the food on the training days?), airlines (at the airport you run into 2 or 3 life insurance guys (gals) traveling from one state capital to another), Meru taxi services, 2nd, 3rd…..20th grade MBA schools – a huge shortage ensured everybody got placed, …..will fill up seems to be quite a bit!
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