RE-ENGINEERINGOFINSURANCEINDUSTRYFINAL.pdfVIP

RE-ENGINEERING THE INSURANCE INDUSTRY BY Mrs. Funmi Babington-Ashaye,FCII MD/CEO Risk Analyst Insurance Brokers Limited PREAMBLE 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. Although it is intangible, insurance is a crucial business service that creates and adds value. It lubricates the oil of business by being the risk bearer. Its importance is better appreciated when disaster of whatever magnitude occurs. Indeed, the economic importance of insurance is to reduce the financial implications of disasters thereby creating a sense of security, which encourages people to engage in commercial activities, without fear, irrespective of the degree of uncertainty. In other words, insurance service, from time immemorial, has always propelled business as it provides a safety net for entrepreneurs desirous of taking insurable risks. However, as a strategy for managing risk and uncertainties, how has the insurance industry delivered on its mandate? How well has it justified the confidence reposed in it by persons who are not risk averse? Without speculating on your response, let me admit that the insurance industry has the capacity to perform more than it is currently doing. If the industry is re-engineered, it would achieve the desired optimum level of performance. The profession and players in the industry must come to this realization and collectively evolve strategies for advancing the course of Insurance. RE-ENGINEERING THE INSURANCE INDUSTRY 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 effi