What is Risk?
Risk can simply be defined as the unlooked for, unwanted event in the
future. Risk is the sugar and salt of life. Risk brings sweetness and
bitterness to life. Life is full of risk and any individual, organization or
state can be a victim any day. In everyday life, risk comprises the steady
toll of fire, accident, theft, explosion and other similar events. The list is
lengthy and costly in terms of money and in terms of human pain and
suffering
Classification of Risk
There are several different ways of looking at risk, but we adopt the
classifications based on the nature of risk and its insurability.
Pure Risks – These are risks that can result only in loss, such as a plane
crash, physical loss or damage to goods by fire or theft or the incurring
of legal liability to pay damages by negligently causing bodily injury to
someone or damage to the property of others. Pure risks are insurable
because they are capable of statistical measurement.
Speculative Risks – Speculative risks may result in either a profit or a
loss, which may be either large or small. Examples of speculative risks
are: change in fashion, market change, etc. These risks are uninsurable
because there is no way of measuring their effect.
Political Risks – These risks are outbreak of wars, trade/currency
restrictions, etc.
Life without Risk
Human beings cannot exist without risk. This is applicable to business
since, for example, manufacturing activity cannot be stopped just
because people will be injured nor can we ban motor vehicles on the
road in order to stop accidents. Do we stop the use of electricity or
cooking gadgets just because of fire outbreak? Clearly, these options are
unreasonable. The world has to continue even in the face of risk and
insurance is one of the many methods of doing this.
Therefore, various classes of insurance policies exist to take care of the
various risks to which organizations, human beings and governments are
subjected to in everyday life.
What is Insurance?
As a house owner or factory owner, are you ever bothered by the
possibility that your house or factory and all your possessions might be
burnt to ashes one night or that your car might be damaged beyond
repair by another car on the road? Or are you worried that you might
inadvertently hurt someone when you are driving to work or just by
crossing the road carelessly? Buying insurance is one way by which you
can remove some of your worries and gain peace of mind.
Insurance can therefore be defined as an arrangement by which one
party (the insurer) promises to pay another party ( the insured) a sum of
money if something should happen which causes the insured to suffer
financial loss. By so doing, the responsibility for paying for such losses
is then transferred from the insured to the insurer. In return for accepting
the burden of paying for losses when they occur, the insurer charges the
insured a price called premium.
The Insurance Market
The major players in the insurance market are:
Insurance companies
Reinsurance companies
Insurance intermediaries
Buyers of insurance products.
Insurance Companies – Insurance companies are risk takers. They
accept risks transferred to them by individuals, corporate bodies,
government and their agencies/corporations etc. Insurance companies
are required to be registered by the National Insurance Commission. The
requirements for registration are contained in the Insurance Act 2003.
Re–Insurance Companies – As individuals purchase insurance from
insurance companies, insurance companies also purchase insurance from
Re–insurance companies. Companies that accept insurance from
insurance companies are called re–insurance companies. Re–insurance
is therefore a form of insurance whereby an insurance company can
transfer to another insurer all or part of its liabilities in respect of claims
arising under the contracts of insurance that it writes.
Insurance Intermediaries
Like any commodity or service, insurance transaction involves
intermediaries through which insurance services pass to the insuring
public.
There are two main categories of insurance intermediaries. They are
insurance brokers and insurance agents.
Insurance Brokers are required to be registered and professionally
qualified. The requirements for registration as a broker are contained in
the Insurance Act 2003.A broker is an intermediary between the insurer
and the insured. The main function of a broker is to act as the agent of
the insured (the person taking an insurance policy) in obtaining
insurance cover for his risk and as agent of the insurer (insurance
company ) in collecting premium.
Insurance brokers receive brokerage (commission) from the insurance
companies with whom they place business.
Insurance Agents – An agent is a person who acts on behalf of another.
Insurance agents act as agents of insurance companies in obtaining
businesses from potential policy holders.
The main duty of an agent is to solicit risk and collect premium on
behalf of the principal (insurer). An agent receives commission and
other remuneration from insurers.
Insurance agents are required to be licensed by the National Insurance
Commission. The minimum requirements for licensing insurance agents
are contained in the Insurance Act 2003.
There are three classes of insurance agents:
The Full–Time Agent: A full–time agent acts for only one or more
insurance companies. Also, the agent might be an independent agent or
an employee of an insurance company. The full–time agent devotes all
his time towards the selling of insurance products. He is remunerated—
in the case of an employee, by monthly allowance plus commission and
in the case of an independent agent by commission only on the business
produced.
The Part-Time Agent: A part–time agent does other things apart from
selling insurance products. He might act for one or more insurance
companies. A part–time agent earns commission only on business
introduced.
The Staff Agent: The staff agent is an employee of an insurance
company. He sells insurance products on behalf of only his employer. In
return, he earns a commission on businesses introduced in addition to
his monthly salary.
Buyers of Insurance Products
Buyers of insurance products are:
Individuals – The demand for insurance by individuals depends on their
financial position. As a person’s income rises, he can afford to buy the
financial security provided by insurance. A rise in a person’s income
enables the person to acquire more property such as; a car, a house and
household goods, which will in turn create the need for insurance
protection.
Business Organizations–The demand for insurance by business buyers
is a function of economic development. As an economy grows, more
capital – intensive methods of production tend to be employed. This will
in turn increase the demand for property insurance for the protection of
property and liability insurance to compensate employees, consumers
and third parties for injury or damage to property resulting from the
activities of business organizations.
Charities, Clubs and other Organizations–This third group of
insurance buyers tends to demand for insurance when their activities and
income increases. An increase in activities increases the needs for group
personal accident for the protection of their members and property
insurance for the protection of their assets.
Governments and Government Agencies/Corporations
Governments, Federal, State and Local councils are big time buyers of
insurance products. The need for insurance by these buyers is mainly to
protect governments’ assets movable or immovable. In the case of
agencies /corporations, the need for insurance protection is obvious due
to the fact that some of their activities are hazardous. For instance, can
NNPC do without insuring its assets? Can airlines afford not to insure
their aircraft? The answer is definitely “no” as no aircraft can be allowed
to fly in the air space of another country without insurance protection.
Motor Vehicle Insurance
The first motor car appeared in the United Kingdom in 1894 and by
1898 the Law Accident and Insurance Society Ltd. was providing a
limited motor insurance cover. But then, motor insurance was not
compulsory and the uncompensated victims of motor accidents suffered
much hardship. However, the increased popularity and mass-production
of cars after the First World War increased casualty figures and the
Road Traffic Act 1930 in Britain introduced compulsory motor
insurance covering liabilities to killed or injured third parties. Nigeria
being colonized by the Britain enacted the same Act and it was known
as the Motor Insurance (Third Party) Act 1945. Similar compulsory
insurance requirements were also introduced in other countries, many of
which require damage to third parties’ property to be covered as well. In
Nigeria, it is only recently through the Insurance Act 2003 that third
parties’ property damage was made compulsory
The conditions of the Road Traffic Acts apply to all vehicles used on the
road including private cars, commercial vehicles, motor cycles and
certain “special types” i.e., mobile cranes, fork-lifts, trucks and bull
dozers.
Road Traffic Act Cover
This provides insurance cover for injury or death of third parties
(including passengers) arising from the use of a vehicle on the road, but
not for damage to their property. It is an offence to use or to permit the
use of a motor vehicle on the road unless such cover is in force. There
are those who are exempted from the compulsory insurance
requirements:
a) Where the owner of the vehicle deposits and keeps deposited a
specified amount with the Accountant General of the Supreme
Court.
b) Where the vehicle is owned and is driven under the control of a
local authority, the police or the armed forces.
In fact the Road Traffic Act cover is no longer issued by insurers in
Nigeria because it is not relevant.
ii. Third Party Cover
This provides protection against liabilities to third parties for injury or
death and for property damage. It also covers legal costs. In Nigeria the
Insurance Act 2003 has made this cover compulsory with a third party
damage limit of N1,000,000.
Third Party, Fire and Theft Cover
This covers liabilities to third parties as under third party cover plus
damage or loss to the policyholder’s own vehicle from fire or theft.
iv. Comprehensive Cover
The comprehensive covers accidental loss or damage to the
policyholder’s own vehicle in addition to the cover provided by the
Third Party, Fire and Theft policy.
Fire and Special Perils Insurance
The devastating effect which a fire can have on a business premises or
private building is common knowledge and the necessity for insurance
coverage is evident.
As a result, the Insurance Act 2003 makes it compulsory to insure public
buildings. Section 65(1), provides that “Every public building shall be
insured against hazards of collapse, fire, earthquake, storm and flood”.
Section 65(2) defines “public buildings” to include “tenement house,
hostel, a building occupied by tenants, lodgers, or licensee and any
building to which members of the public have ingress and aggress for
the purpose of obtaining education or medical services, or for recreation
or transacting of business”. The nature of the legal liabilities of an
owner or occupier of premises is in respect of loss of or suffered by any
user of the premises and third parties.
The actual risk of fire occurring on a building varies from building to
building, depending on the following factors:
1. The construction materials used in the building
2. The usage of the building
3. The type of materials stored in the building
4. The fire-fighting appliance installed in the building
5. The standard of house keeping etc.
Fire loss or damage is a waste to the economy and the need to restore
the loss with minimal delay underscores the need to have fire insurance
protection.
The object for fire insurance is to reinstate or replace property damaged
or destroyed or to compensate an insured person for such damages so
that he is placed in the same financial position after a loss as he
occupied immediately before the loss.
PRODUCT DEVELOPMENT
Someone once said, ‘Insurance is not something that is bought, it is something that
has to be sold’. We shall recall this when discussing marketing and promotion (4.3
below), but to the extent that it is true the whole exercise depends upon having something
to sell. That something may be described as an insurance product.
Some insurances, of course, are compulsory (e.g. third party motor and
employees’ compensation), but even with these classes the precise policy wording is not
decreed by the Government. Therefore there is scope for flexibility in presentation (whilst
the requirements of Ordinances must be respected). With other classes of insurance
business, Hong Kong is an open and very competitive business environment. Insurers
must therefore be efficient and dynamic in preparing the products they ‘sell’. As an
abbreviated summary, the Product Development department/section of an insurer will be
much occupied with:
Scope of Fire and Special Perils Insurance
The standard Fire Insurance Policy covers three major perils:
a) Fire (whether resulting from explosion or otherwise) but not
occasioned by or happening through:
i. Its own spontaneous fermentation or heating or its undergoing
any process involving the application of heat;
ii. Earthquake, subterranean fire, riot, civil commotion, war and
kindred risks;
b) Lighting;
c) Explosion not occasioned by or happening through any of the
perils specified in (ii) above;
Explosion of boilers used for domestic purposes only;
Explosion in a building not being part of any gas work , of gas used for
domestic purposes or used for lighting or heating the building.
Also, the following known as special perils may be added on payment of
additional premium, hence the name, Fire and Special Perils:
1. Perils of a chemical nature – explosion, spontaneous combustion;
2. Social (or, more correctly, anti-social) perils – riot, civil
commotion, strikers, taking part in labour disturbance or
malicious persons acting on behalf of or in connection with any
political organization and malicious damage (unconnected with
political organization);
3. Perils of nature – storm and tempest, flood, tornado, earthquake,
subterranean fire, subsidence
4. Mechanical (or miscellaneous) perils – aircraft or other aerial
devices or articles dropped thereof. Busting or overflowing of
water tanks, pipes or apparatus. Impact by road vehicles, horses
or cattle sprinkler leakage.
Incidental Fire Losses
Sometimes, property is not burned but loss regarded as a fire loss is
sustained as a direct consequence of a fire in the following
circumstances:
Property damaged by water or other extinguishing agents used for
extinguishing purposes;
Damage done by the Fire Brigade in execution of its duties e.g. in
gaining access to a fire;
Property blown up to prevent a fire from spreading;
Damage caused by falling walls or parts of a building in which a fire
takes place;
Damage by smoke and scorching;
Loss or damage to property removed from a burning building caused
by rain, theft or damage during removal provided that the articles are
justifiably removal mitigate a loss.
Fire insurance could be effected on the following assets:
1. Building and contents
2. Office, furniture, fixtures and fittings;
3. Plant, machinery, equipment and spare parts;
4. Trade including raw materials, work-in-progress and finished
goods etc.
CUSTOMER SERVICING
Sometimes described as Client Servicing, this section has a number of functions,
and with a particular insurer some of these may be carried out by other departments (such
as Accounts, Claims etc.). The general scope of its responsibilities is indicated by its
name. It is to provide a service to existing and potential customers/clients, and the duties
probably include:
(a) Correspondence: enquiries of every imaginable kind are likely to be received,
asking for guidance and information. Sometimes, the enquiries will be totally
unrelated to the company’s business; therefore a degree of perception and tact will
be required. It is quite sure that the response a company gives to enquiries is very
important.
(b) Public relations: the more formal aspects of this could be within the province of
the marketing people, but the way clients are dealt with profoundly influences a
company’s standing in the eyes of the public.
(c) Documentation: requests for duplicate policies, amendments to existing policies,
copies of motor insurance certificates, etc. will probably receive at least their
initial attention in this department.
(d) Complaints: an area that must be seen to be handled fairly and promptly. This
may require considerable liaison with other colleagues/departments. It must also
be remembered that complaints may reach high levels of company management
and receive media and even Government attention.
Standart Inline Elements
MARKETING AND PROMOTION
Remembering the quotation in 4.1, this is a very important area for the insurer.
The particular areas of responsibility include:
(a) Public Relations: as explained, this may overlap to some extent with Customer
Services, but the image of the company and its perceived standing in the eyes of
the public is of great significance. This wide-ranging activity will include:
(i) the co-ordination of all external communications;
(ii) the co-ordination of media enquiries and interviews;
(iii) press conferences, to announce or explain things, as necessary;
(iv) preparing press releases and copy for trade and other journals.
(b) Promotions: organising and co-ordinating their preparation and conduct.
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(c) Advertising: closely interconnected with the above, this enormously important
area includes:
(i) selection of external agencies (if used);
(ii) the extent to which TV or other media are to be involved;
(iii) co-ordination of advertising campaigns;
(iv) expenditure analysis and control.
Note: Advertising is an area which could involve massive expenditure. Great
care must therefore be taken in its management and control. As one
famous businessman said ‘Half the money I spend on advertising is wasted.
Unfortunately, I do not know which half!’
(d) Sponsorship: insurers are frequently asked to sponsor industry or educational
projects. Also, this is of course an important aspect of advertising, involving
much time and probably a considerable budget.
(e) Market research: obviously, continuous monitoring of one’s present and potential
market is a vital element for a marketing department. This will seek to establish
existing and perceived needs and demands in respect of insurance products.
Dropcaps
In insurance, burglary or theft is defined as theft involving entry to or
exit from the premises by forcible and violent means. This does not
include entry to the premises by a key, by a trick or by hiding in the
premises whilst open for business (unless the thief subsequently makes
his exist by forcible and violet means).
The intention of insurers in a burglary policy is to cover theft of
property resulting from the breaking down of the premises.
The object of a Burglary Insurance Policy is to reimburse an insured for
losses and damages sustained through burglary and theft.
The word “theft” is usually used for business premises while burglary
and house breaking are used for private dwelling houses though all these
words virtually have the same meaning.
In insurance, the definition of “money” is much wider than most people
expected and includes such things as “cash, currency notes, bank notes,
bonds, bills of exchange, stamps (not forming part of a stamp collection,
trading stamps, luncheon vouchers etc.) in other words, items whose
negotiability gives them as currency.
Money is property and is at risk from both fire and theft, it is
particularly attractive to thieves having all the attributes that the thief
likes, such as – high value, small bulk, easy to transport, easy to dispose
of , difficult to trace available in both the fire and theft policies. Money
is at risk anywhere and particularly so when in transit.
The scope of cover under the money policy is normally on an “all risks”
basis and covers loss of money through theft, fire and other causes not
specifically excluded whilst
a) In transit;
b) On the insured’s business premises and safe;
c) On bank night safe;
d) In the custody of specified employees;
e) Damage to safe.
A limit premium is imposed for any transit, and a sum insured applies to
money in safe, on the insured’s premises and in custody of employees.
Blockquote
INSURANCE SALES
Very closely connected with marketing, there may be considerable overlap of
activity, if separate sections exist. The name, however, indicates the functions, which
specifically will include:
(a) Product liaison: it is vital that the closest co-operation exists between Product
Development, Marketing and Sales, for obvious reasons. Poor communication
between colleagues in this area could have disastrous results.
(b) Sales enhancement programmes: again requiring co-operation with other
colleagues, e.g. Training and Marketing.
(c) Monitoring: it is important to keep abreast of results and trends. Again, much
teamwork with colleagues is required.
UNDERWRITING
This may be defined as the selection of risks to be insured and the determination of
the terms under which the insurance is given. With non-life insurances, it also involves a
continuing process of monitoring results and individual risks, to see whether renewals
should be offered, and on what terms. Special features to note are:
(a) Life insurance: for individual life policies, underwriting is a once only exercise,
since the policy cannot be cancelled by the insurer and changes are only possible
with the insured’s consent. Because of its crucial importance, life insurance
underwriting is often centralised.
(b) General insurance: here the range of different cover is very wide and mistakes in
underwriting are not permanent, in the sense that policies will come up for renewal
and their terms be reviewed, and can even be cancelled if necessary. Therefore
much less centralised underwriting is still affordable.
(c) Guidelines: whilst underwriting is at a ‘one to one’ level, there is obviously a need
for the preparation of underwriting manuals, rating guides and similar guidelines
for staff. These involve considerable research and development, again with much
attention to trends and results.
(d) Target risks: curiously, this term could mean highly desirable types of business
(in Life Insurance) or highly undesirable types of business (in General Insurance).
In the former, of course, this is business the insurance intermediaries should be
encouraged to seek diligently. In the latter, the term could mean large, hazardous
risks, e.g. petrochemical plants.
Each insurer will have its own ideas about what constitutes desirable or
undesirable risks. Typically, however, in life insurance, healthy young
professionals are likely to be desirable contacts. In theft insurance, jewellery
stores in Central Hong Kong may not be favoured.
(e) Stop-lists: sometimes given other names, a ‘stop-list’ indicates those types of
business that should not be encouraged, or should be rejected if offered. Some
examples may readily come to mind, with different types of insurance, although
not every insurer will have the same opinions on this subject. Nevertheless,
compiling such lists involves considerable underwriting expertise, especially
bearing in mind the sensitivity over discrimination of every kindSam White
POLICY ADMINISTRATION
This is another departmental description that may involve overlap with other
sections or departments mentioned above or below. The general areas of concern here
may be:
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(a) General or Life insurance? : this is a most important question, since the policy
document with each has a very different significance. With general insurance,
technically there need not be a policy (although there almost invariably is) and it is
seldom necessary to produce the original policy document when making a claim.
With life insurance, however, the contract is non-cancellable by the insurer, and
the policy documents are required to be produced at the time of a claim.
(b) Life insurance policies: as mentioned above, these must be produced when a
claim is made. A mistake in a life policy is potentially much more serious than
with General Business, especially since the policy may be assigned to another
person and/or used as collateral with a loan and any assignees are expected to be
relying on the veracity of the policy.
(c) New business procedures: especially with Life business (as noted) the process of
verification and checking, both for factual accuracy and errors in document
preparation, is very important. With any class of business, it is important that the
policy should be prepared and issued as efficiently and as impressively as
possible, for reasons that are obvious.
(d) Other procedures: this topic embraces such matters as error handling, policy
correction, endorsement preparation and renewal procedures. With life insurance,
once more, the great importance of the actual payment of the first premium must
be considered. In other classes, the contract may commence without the receipt of
a premium (often a non-marine policy requires that the insured ‘has paid or agreed
to pay the premium’). With life insurance, the usual practice is that the existence
of the contract depends upon the first premium being received.
CLAIMS
Once more, there are significant differences between Life and General Business
claims. Specifically, the implications include:
(a) Life insurance claims: obviously, there will only be one death claim. It is quite
essential for the claims handler to check each claim with the utmost care, as all
sorts of considerations are involved, such as:
(i) possible disputes or complications, for instance, problems may arise when
the primary beneficiary cannot be traced, or more than one person lodges a
claim as alleged assignees;
(ii) possible outstanding policy loans;
(iii) possible assignment, so that the claimant is not the original policyholder;
(iv) uncertainties over actual death or the identity of the deceased;
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(v) dividend/bonus considerations with participating/with-profit policies.
For similar reasons to those pertaining to underwriting (see 4.5 above), life
insurance claims handling is frequently centralised.
(b) General insurance claims: the range of different types of claims is much wider
than with life insurance. Also, it is quite possible that the amounts involved are
enormous. Therefore, equal care should be taken in verification, although most
claims being relatively small, the work is much more likely to be decentralised,
sometimes with fairly junior staff having some degree of authority in claim
settlement.
[Example: Claims may be relatively trivial, such as the loss of a camera, or
exceedingly complex, such as a major explosion at a large power station.]
(c) Common features: there are two areas that must be the subject of attention in all
insurance claims. These are:
(i) Liability: is the insurer liable under the policy? When dealing with
liability insurance, it must also be ascertained whether the insured is liable
at law to the third party claimant.
(ii) Quantum: how much is payable with the claim? With life insurances, it is
usually pre-determined, but with other classes of business, this could
involve complex and sometimes bitter discussion.
(d) Significance: it has been said that an insurer stands or falls on the way it deals
with its claims. There is truth in the remark and the insurance intermediary will
want to know and feel confidence in the support he looks for in this area.
Image Alignment
REINSURANCE
This is not an area where the insurance intermediary is likely to have a close
association, but he should be aware that reinsurance is very important to the insurer. The
aftermath of the September 11 terrorist attack is a testimony to this saying.
(a) Definition: insurance used to transfer all or part of the risk assumed by an insurer
under one or more insurance contracts to another insurer, who may be referred to
as a reinsurer in relation to such a transaction.
(b) Reasons: The major reason for buying reinsurance is security. It is very likely that
an individual insurance claim is payable from the assets of the insurer, but it may
be very inconvenient (and even costly) to produce large amounts of cash at short
notice, since assets will mostly be in investments. A reinsurance contract may be
so arranged as to entitle the reinsured to an immediate claim payment by the
reinsurer in the event of a valid direct claim (i.e. a claim from the original insured)
exceeding a pre-determined figure, even before the reinsured has actually paid the
direct claim.
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Another important reason for reinsurance is to increase an insurer’s ‘underwriting
capacity’, which means the ability to accept proposed business with in mind all
risk management considerations. Having reinsurance means that some risks may
be accepted which might otherwise have to be declined in part or total.
(c) Methods: This does not concern insurance intermediaries, unless they handle
reinsurance matters on behalf of insurers or reinsurers.
(d) Effects for the Insured: Reinsurance has no direct effect for the policyholder. He
is not entitled to know, and probably has no need to know, that his insurance is
being reinsured. That is a matter entirely between the insurer and the reinsurer(s).
The insurer is always directly liable to the policyholder for the full amount
payable under the contract irrespective of the financial condition of its reinsurers.
Reinsurance, however, does give an added security that the insurer will be able to
pay!
ACTUARIAL SUPPORT
An actuary may be thought of as a highly skilled mathematician. His particular
expertise is not only in the collation and presentation of numerical information, but also
in projecting and predicting future trends, based on available data and assumptions. It
will immediately be understood, therefore, that such an expert has a very important role
to play in insurance. Some specific observations:
(a) Life insurance: more than any other class of business, life insurance depends
upon mathematical calculations (although they are very important to all classes).
It is essential for the life insurer to know mathematical facts about mortality (death
statistics) and projected interest earnings, for example.
Note: 1 The Insurance Companies Ordinance requires all insurers who carry
on long term business to appoint a qualified actuary, acceptable to the
Insurance Authority.
2 This Ordinance also requires long term insurers to carry out a
valuation of all assets and liabilities at least once a year. This is perhaps
the most important function of the actuary.
(b) General insurance: Their expertise, especially with long-tail business (insurance
where claims arise and develop over a long period of time until, say, 5 years or
even more after policy expiry, e.g. liability classes), is extremely valuable. This is
particularly true when having to calculate outstanding claims reserves required.
The Office of the Commissioner of Insurance requires motor and employees’
compensation insurers to annually conduct actuarial review of their reserves
relating to such statutory classes of business.
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Note: A corresponding term, ‘short-tail business’, refers to business where
claims are mostly settled within a relatively short space of time after
arising, e.g. motor (own-damage) and fire insurance.
(c) Generally: the application of an actuary’s skills is very obvious in such areas as
premium rating, the calculation of reserves and the valuation of liabilities.
ACCOUNTING AND INVESTMENT
The Accountant is another official with a vital role to play in the running of any
business enterprise, and particularly that of an insurer. The functions of this department
are fairly obvious, but for completeness we note:
(a) Record keeping: financial records must be accurate and reliable.
(b) Collections: ensuring that money receivable by the insurer is in fact paid clearly
affects the very existence of the company. A satisfactory system for collecting,
monitoring and reminding the company debtors is thus of high priority.
(c) Payments: ensuring that bills and debts are paid promptly and efficiently (and
correctly) entails much routine but important work.
(d) Investment: if there is not a separate investment department, the care and
placement of company assets may be the responsibility of the Accountant. It goes
without saying that this is extremely important, from the perspectives of security,
relative return (or yield) and liquidity (having sufficient cash-flow to meet known
and anticipated monetary demands).
TRAINING AND DEVELOPMENT
Sometimes unappreciated by line managers, ever conscious of targets and
deadlines, the Training and Development department within a company is very important.
Some observations to note:
(a) Staff and Agents: Training is essential for both in-house personnel and field staff.
The educational and training needs of both must not be overlooked.
(b) Relevance: Training is not an optional extra, nor is it independent. It is part of the
overall team that constitutes the insurer, and its activities must not be selffulfilling, but relevant and effective to the continuance and enhancement of the
company.
(c) Training: This may be seen as preparation for the actual job in hand, or the job in
prospect. As such, it will involve courses, seminars and self-preparation arranged
or encouraged by staff training personnel.
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(d) Education: This may be seen as involving the quest for wider learning and
professional or related qualifications. Preparations, etc. for this may be
encouraged rather than provided, but having qualified staff (and insurance agents)
is of great importance.
(e) In-house or external: Whether instruction is provided by its own staff, or
arranged on behalf of staff with outside providers, this will be an important
concern of company trainers.
(f) Resources and records: Facilities for training (library and other aids) as well as
up to date records of individual training progress will clearly assist the efficient
running of this section.
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Table
| # | Column 1 | Column 2 | Column 3 |
| 1 | Row 1 cell1 | Row 1 cell2 | Row 1 cell3 |
| 2 | Row 2 cell1 | Row 2 cell2 | Row 2 cell3 |
| 3 | Row 3 cell1 | Row 3 cell2 | Row 3 cell3 |