The insurance industry has underinvested in management talent for decades. This contrasts sharply with the banking business. Until very recently, no insurance company would have shown up on a list of preferred employers at top business schools. Furthermore, compensation was generally less attractive than in other parts of the financial services industry. This is driven partially by the retail nature of the business with a strong focus on mass operations – but it has clearly become an issue for the industry at large, and Asia is no exception. The most aggressive players have already begun to change – globally and in Asia – and have identified talent as a key success factor for further growth and value creation.
In many markets the situation is aggravated by the fact that the insurance industry is still very young and, therefore, lacking a whole generation of managers with more than 5-10 years of experience, notably in India and China. But even here the winners are already pulling away from the pack. Ping An of China now has 74 expats within their top 100 executives – mostly, but not all, with a Chinese background. And ICICI – Prudential is attracting top talent in India, capitalizing on the strong brand and image of the group and a sense of national pride.
The key to developing and attracting top talent to life insurance companies is taking a holistic approach. Compensation, although important, is certainly not the only element, and in the eyes of young managers also not the most crucial. For example, graduates from top business schools regularly cite attractive career opportunities and corporate culture as more important than compensation. According to a Hill & Knowlton study, which surveyed 527 MBA students at 12 top-rated international business schools, 95 percent of the students ranked career opportunities as “extremely” or “very important” factors in selecting an employer, while 86 percent of them ranked corporate culture as equally important.
Life insurers should look at best practices from other industries to upgrade their human resources and talent management functions. Companies such as GE demonstrate that hiring the best, giving them great responsibility early on, and actively managing their professional development through systematic training, career paths, and mentoring is key to building a strong management bench. This is particularly important in Asia where management talent is scarce, and a culture of poaching people from competitors often starts a downward spiral of overpayment and frequent job is hopping. Building a strong management bench will be a key success factor in life insurance in Asia for the next decade.