DIAGNOSTICS OF INSURANCE INDUSTRY IN MACRO RISK DOMAINS—HR PERSPECTIVE

There are two ‘business risk’ environments with which insurers have always to contend and deal with. One is the external business environment offering them enormous opportunities for business growth, alongside several threats and risks challenging their exploitation. The competing forces of opportunities and threats, and their ever changing facets, however, are not within the control of the insurers. The other, the internal operational enabling environment of insurers, which is shaped by the organizational strengths and weaknesses of the insurers, is within their control. And it is for the leadership of insurers to ultimately shape the overall capabilities of their enterprises to deal with the riskier external environment, and benefit from it. One environment is a challenge and the other is a response. The governance and leadership structures of an insurer must provide a ‘vision’ to its staff of how it wants to shape the corporate personality, based on what it ultimately wants for itself, in the long-term. And then it should begin to work on changing its business model, its operational strategies, its business processes and systems, its measurement and analytical tools for analysis and learning, and build the culture and the expertise of its human resource to deliver on the ‘vision’, from the external environment. Tinkering with the alignment between the forces of external and internal environments is the key issue for it. The delivery mechanism of the objectives or goals, whatever they are, is heavily dependent on the quality of its human resource, and on what it is asked to deliver. There has to be a total identity for everyone within to stay course on the message to avoid working at cross purposes. It would seem, however, that there is a greater interest to be active in the external environment, with little attention paid to mold the internal capabilities to deliver. The gap is getting bigger. The discussion and analysis below depicts the peculiar nature of the non-life insurance industry, its manifold challenges, and it focuses on how the solutions to them would not only depend on the outcomes sought by the leadership, but on who can deliver them, and what pitfalls need to be avoided. It is the quality of its human resource, and what it is asked to perform and why, which would require an internal consensus. Other-wise, the enterprise could go out of alignment, both with the external as well as with the internal environment. What ails the present is this double-edged misalignment.