Indian Insurance Industry Story Sours with Job Losses and Exits with ULIP Reforms and FDI No-Reforms

The Indian Insurance Industrywhich was massively booming like the telecom industry at one time in India is now seeing similar troubles. The industry saw many entrants in partnership with foreign insurers as they looked to capitalize on the growing Indian market. However the story turned sour due to multiple reasons. The industry saw a number of exits in 2011 with retrenchment by the existing players as well. The reasons were

1) Increasing competition

2) Losses which meant increasing demand for capital

3) Reform of the ULIP product which was being mis-sold

4) Non-increase in the FDI cap

The story continues to sour with major companies like Future Generali too firing almost 30% of its workers and shutting down a number of its branches. The firings are taking place at all levels leading to massive job losses. Note this is similar to what is taking place in telecom companies in India as well where companies like Viom networks have fired hundreds. The lack of policy response by the moribound corrupt government is directly responsible for this . There has absolutely been no movement to try and resurrect these important industries by the government. The ministers are playing petty games like removing cartoons, taking potshots at each other and indulging in nepotsim and corruption. Like one commentator said that despite its democracy what India lacks is leaders who look after the national interest. Whatever the failings of China , there leaders are looking after the national interest rather than their self interest

Future Generali Life shuts 55 branches, cuts staff by a third

That has seen its workforce reduced by a third and the closure of 30 per cent of its branch network.According to sources, the downsizing is a direct fall-out of the slowdown in the business and the promoter’s plan to sell stake in the life insurance business.Sources indicate the company has abolished the positions of zonal heads and channel heads and significantly reduced the number of regional managers, area managers, branch managers and sales managers.There have been several exits at the senior management level, which includes the chief marketing manager, the head of the agency channel and others.