The People Business

The people business In December 2000, the two financial giants—one of India’s largest private sector bank and a century-old international financial services group—came together to form Live Strong Life Insurance.1 It was among the first private sector life insurance companies to begin operations that year, after receiving approval from Insurance Regulatory and Development Authority of India (IRDAI).

The ultimate objective of any business should be to deliver superior value to the customer. A firm’s ability to do this depends a lot on its capability to read contextual changes and reorient its business strategy. HR plays a critical role in the execution of such strategic forays, simply because at the head and hub of these changes are people who work for that company. And if HR fails to respond to such changes and adapt accordingly, then the execution suffers a major blow.

This case is built around the contextual changes that happened in the insurance milieu in India and how Live Strong Life Insurance responded to such changes both from the business standpoint and from the HR viewpoint, creating superior value for its stakeholders. It also analyses how HR positioned itself differently as the environment changed, altering business needs and hence effectively led the business transformation of Live Strong and helped it charter rough weather.

The year 2000 was a watershed year in the history of the Indian insurance industry—the decision of the Indian government to privatise the insurance sector and allow FDI up to 26 per cent created a sudden spurt in growth. Multiple players entered the market; between 2000 and 2005, 14 private companies set up operations. Insurance penetration increased from about 2 per cent of GDP in 2002 to 2.6 per cent in 2005. Much of this growth was in the private sector, with its share moving from about 1.9 per cent in 2002 to 25.3 per cent in 2005.

Building blocks (2000-2004)

The need of the hour for Live Strong was to create a structure for the new company and prepare teams for handling various functions. It decided to position itself as a multichannel, multiproduct company. The company harboured ambitions to become a dominant player by creating lasting relationships with customers and the partners.