Success of an insurance company depends on four important functions:
Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis.
Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents.
Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations.
The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations.
Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, company’s market share, increase in number of branches and divisions etc.
Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness.
Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provide measures of efficiency of a unit as well as the organization.
Investment control and expense control are dealt separately and the effectiveness of management’s’ decisions at various levels is to be assessed separately.
Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis.
Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents.
Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations.
The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations.
Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, company’s market share, increase in number of branches and divisions etc.
Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness.
Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provide measures of efficiency of a unit as well as the organization.
Investment control and expense control are dealt separately and the effectiveness of management’s’ decisions at various levels is to be assessed separately.