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Clark Troy
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Clark Troy has worked in the financial services world since 2000, and is currently a Financial Advisor at DWM Advisors, registered investment advisor in Durham, NC. He has completed the educational and exam requirements towards a CFP® certification. He worked for years as a management consultant... More
  • A Training Gap for India's Life Insurers 0 comments
    Aug 8, 2010 11:14 PM | about stocks: MET, AIG, ING, AXA, AIVAF, AEG, PUK, AZ
    This morning I was reading The India Way:  How India's Top Business Leaders Are Revolutionizing Management, by four professors at the Wharton School:  Peter Cappelli, Harbir Singh, Jitendra Singh and Michael Useem. As you might guess from the title, the book tries to distill out the special sauce that is making India's industrial leaders so competitive. 

    One of the four key ingredients in this sauce is the way India's management focuses on developing and empowering employees.  Here's how the authors characterize corporate India's attitude towards training:
    One study of practices in India found that the IT industry provided new hires with more than sixty days of formal training -- about twelve weeks.  Some companies did even more: Tata Consultancy Services (BSE: 532540), for example, had a seven-month training program for science graduates who were being converted into business consultant roles, and everyone in the company got fourteen days of formal training each year.
    Somehow, India's life insurers were not informed of this cornerstone of the Indian economic miracle, at least in how they prepare their 3 million odd agents to sell life insurance policies.  By all accounts -- for example the Swarup Report, which has been driving much of the discourse around retail financial product distribution in India -- agents receive the most rudimentary training (a week or so) before they are licensed.  Even the minimal standards of online education are at times circumvented, as Monika Halan reported in the Wall Street Journal's Indian affilate LiveMint:
    To complete the mandatory hours of online education as specified by the regulator, the firm, one of the larger players in the business, has outsourced the online course to an outside agency, where people sit and click on user names bearing the names of the insurance firm’s employees. Such instances of “check-box” regulation abound. This doesn’t bode well for the rule of the insurance regulator that makes it mandatory for all sellers of insurance policies to have some basic hours of study.
    Much is often made of the tabula rasa before businesses in the developing world.  Unburdened by layers of sedimented culture, the reasoning goes, corporations in emerging markets can "leapfrog" their developed world counterparts by starting afresh and doing things right.  For the life insurance world, this translates into an opportunity to put aside cultural stereotypes of the pushy insurance salesman and put a trustworthy face in front of consumers. It would behoove life insurers to avail themselves of this window of opportunity, if it has not already slammed shut behind them.

    Disclosure: Index Funds Only
    Themes: Life Insurance Stocks: MET, AIG, ING, AXA, AIVAF, AEG, PUK, AZ
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