Introduction:
Re-engineering involves the
re-appraisal and review of the processes and systems of an organization such
that, in the midst of competition, it becomes not only more efficient and
effective but also continues to deliver value to its stakeholders. In terms of
an industry, reengineering will entail regulatory review designed not only to
restructure the business landscape and reposition the affected industry in the
scheme of things but also to enhance its contributions to national economic
growth and development. For an industry like insurance battered by claims
repudiation, slow operational processes and its attendant wastes, low
Information technology, dearth of adequate skilled manpower etc.
Discussion:
Insurance is the equitable transfer
of the risk of a loss, from one entity to another in exchange for payment.
Distribution: Insurance distribution is
not simply about pushing product. An outsized share of the value across the
entire insurance industry value chain is added in distribution.
Insurance intermediaries
help insurers by:
1.
Facilitating entry into
the market, helping new insurers reach a wide client base without having to
incur the costs of building a distribution network.
2.
Assisting with
claims-related services and policy administration.
They also help insurance
customers by:
1. identifying the risks customers face
2. ensuring that customers take informed decisions
about the risks
3. designing new and innovative solutions
4. reducing customers’ search costs
5. providing personalized advice
6. Assisting customers with claims-related services
and policy administration.
Insurance products are
also sold directly by some insurance companies and bank-assurance.
Until very recently, many did not perceive insurance
business as a crucial financial service mainly because the purchase of
insurance service does not involve the exchange of any physical product.
Thus, the focus of re-engineering
in this sector must be to enhance its image through prompt processing and
payment of all legitimate claims, aggressive marketing of its value creating
abilities, the packaging of insurance policies in easy language, need based
products development, buying habits and risk profile of the insured, etc.
Re-engineering process:
1.
Rebuilding
the Image of the Insurance Industry
2.
Marketing
of Insurance Products
·
Product
Design
·
Simplify
Language of Policies
·
The
People Issues
·
Better
Business Control and Reporting
·
The
Code of Ethics
Conclusion: Insurance creates value because it
protects. It creates value because it is an antidote to fear, uncertainties and
risk. It creates value because it stimulates and encourages investment. If it
is re-engineered as proposed, it will continue to reinforce and facilitate
trade both at the national and international levels, such that value and wealth
are created on a sustainable basis. Finally, re-engineering the insurance
industry should not begin and end with just recapitalization and induced
mergers.
We must move towards financial
supervision and market supervision such that the solvency of insurers and their
practices are scrupulously monitored by an efficient and effective regulatory
agency. Only then will the insured feel confident that they have coverage for
any insurance product purchased.
Fair attempt !!!!! but > 500 words???/
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