Category: Insurance

Introduction

The development of stable operations in production has a coherent relation to the formulation of policies that protect against losses. Essentially, there are various paramount strategies to prevent the loss of money owned by a company. However, this discussion assesses the property-casualty insurance where such vices as accidents to the employees and loss of funds due to negligence can arise. Technically, the establishment of a protective plan to curb these unexpected incidences relies on making appropriate decisions.

In this regard, there arises a pertinent issue about increasing the units of production. In essence, businesses try to maximize their profits by producing as many units as those covered by an insurance policy (Boggs 143). Therefore, if the maximum units covered by an insurance company are reached, then the cost of producing 1 more unit requires much more capital than the ones already formed. This perspective shows that producing such a unit might incur adequate losses. This form of negligence regarding losses incurred due to the marginal cost can be insured as well.

Marginal Cost

The production of goods is reliant on the target market and profit made from each unit. The marginal cost is the capital required to produce a new entity or unit. In defining the marginal cost, it should be apparent that the production of a new unit may require the purchase of a machine, a raw material, new markets, extensions in the distribution sector, and increments in the insurance cost among others. In other cases, the production of the unit may require as little as what the initial items needed.

Furthermore, the production of a new unit may lead to a reduction in cost per entity For instance, the production can facilitate buying of raw materials at wholesale prices, which are often lower than retail ones. It, therefore, implies that producing a new unit can lower the cost of production. In either case, logical and reasonable decisions must be made to adjust the profits towards the maximum and stabilize the production processes.

Purchasing

In essence, the thought of purchasing items as the capital of production must be planned properly. For instance, purchasing a new vehicle to market or distribute products demands motor insurance and assurances which are renewable. A mature arrangement comprising of financial analysis and strategic plan to maximize profit must apply to avoid losses and poor management. In another perspective, the purchase of an item may pose risks to the employees.

If such an item is risky, it may be vital to deliberate on the possible losses and implement medical attention and allowances for the pain and suffering as the states conditions of working speculate. The item may cause further losses if an affected person decides to sue the business for negligence. This act can lead to losses attributed to compensation if the business has no property-casualty insurance cover.

These attributes of failure to cover the losses caused due to an unexpected event/course lead to many closures of businesses as the normal schedule cannot be restored without external funding. Otherwise, a company can lower its cost and units of production to facilitate sustainable and stable establishment. On the other hand, the management can agree to take the cover, prevent such losses, and be assured that there are few risks taken.

Business and Insurance

Health insurance exchange requires employers to pay fines for their personnel. This personnel gets tax credits for health insurance through an exchange. However, this excludes low-wage earners, enforces fresh regulations on health strategies in the exchange and minor market sets, and expands medical aid to 133% of the national poverty level.

Health insurance exchanges are state-run American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges, controlled by a governmental or non-revenue generating organization (Hewitt 133). These organizations incorporate people and small enterprises with up to a hundred employees to secure licensed coverage.

It authorizes countries to sanction businesses with over a hundred members of the workforce to acquire the coverage from SHOP Exchange commencing in 2017. The states can develop local exchanges excessively to function in a country where they practice a separate approach.

Effect of Law on Business

Laws created by the government allow a space in which businesses can battle each other on a fairground. Occasionally, the government adjusts these regulations and structure compelling companies to alter how they function. Therefore, business is influenced intensely by the governments course of action.

Taxation regulations by the government such as cooperation taxes, environmental taxes, and VAT affects a business just like an increase in costs leads to the passage of some costs to the consumer through raised prices. Moreover, increment of interest rates by the monetary authority when attempting to regulate the money supply will raise the cost of credit.

Consequently, enterprise owners will not want to borrow from the commercial banks which can lead to contraction of the economy and reduction consumers expenditure. It also causes selective credit creation where the government subsidizes some business activities, such as agriculture, to curb unemployment (Sherman 156). Other requirements are evident in:

• Laws regulating the minimum wage rate which acts as a guideline to employers on the remuneration of workers
• Laws requiring employers to cater for disabled persons and thus promoting inclusion of the minority groups in the companies
• Protection of consumers against exploitation and unscrupulous practices which can foster the businesses to produce quality goods and services

Public Option and Market Behavior

A public option is an expansion of the healthcare sector where it is overseen by the state to provide insurance to eligible individuals. The controversial nature of the public option is on being good when presented in terms of covering all Americans, but the public rejects it when details of its financing come to light. Currently, it is warding off insurance companies from turning down coverage to individuals who have a prevailing situation. A company should cover the possible risks for the consumers to warrant maintenance and their security, as well as protect their rights as an organization.

Several attributes can be considered at the production level to enhance the marketing strategies. The prevailing marketing plans facilitated by information technology have aroused a competitive nature in the markets of many products (McConnell and Brue 76). The consumers urge to purchase a product is affected heavily by the knowledge he or she has of it. When there are compliments of the product, the market prices must be regulated to facilitate preference of the subject product.

In some instances, a company may be subjected to losses if there are risks published after using its products. For instance, a consumer may buy its product and develop health problems where the company is held liable. Ideally, the company should compensate that person to avoid making loyalty problems. Primarily, creating a brand for goods produced is important.

Therefore, the repercussion of the incidences where the producer lowers the brand name is low confidence in the market and less gross income since people may buy the compliments in place of the companys product. The losses incurred due to these possibilities can be covered through insurance companies.

Works Cited

Boggs, Christopher. Property and casualty insurance concepts simplified: the ultimate how to insurance guide for agents, brokers, underwriters and adjusters. United States: Wells Publishing, 2010. Print.

Hewitt, Maria. Facilitating state health exchange communication through the use of health literate practices workshop summary. Washington, D.C.: National Academies Press, 2012. Print.

McConnell, Campbell, and Stanley Brue. Microeconomics. 19th ed. United States: McGraw-Hill Education  Europe, 2011. Print.

Sherman, Howard. The roller coaster economy: financial crisis, great recession, and the public option. Armonk, N.Y.: M.E. Sharpe, 2010. Print.

Background

In the 21^st century, competition is becoming a challenge within the business environment due to an increment in the rate of globalization. This is affecting operation of firms in different economic sectors. The insurance industry has not been shielded from this challenge. A large number of investors are venturing into the industry due to its profitability potential. These firms are offering different insurance products. This has culminated into an increment in the degree of saturation within the insurance industry (Hong Kong insurance industry, 2010, para. 1-5). In addition, growth in Information Communication Technology (ICT) has resulted into knowledge explosion. Customer awareness in relation to different products has been enhanced. As a result, firms are not only focusing on price and quality as the only elements to enable their success, instead, development of customer relationship has become paramount (Kuusik, 2007, p. 4). Romano and Fjermestad assert that firms are becoming more customer centric (2006, p.128).

Increment in the level of competition has made it difficult for insurance companies to retain their customers. Problem in retaining the customers is likely to thrive into the future considering the increase in the level of competition. This is due to the fact that there will be a large number of insurance companies from which the customers can select from. In addition, the customers are becoming more complex in consumption of insurance products. This results from complexity and dynamic nature of the various risks facing individual and institutional customers. For firms in this industry to survive in the industry as going concern entities, it is paramount that they attain a high competitive advantage. This will entail formulation and implementation of effective operational strategies (Kindurys, 2009, p.5).

One of the strategies that can enhance the firms competitive advantage is cultivation of customer loyalty. Customer loyalty refers to the general behavior that is exhibited by clients through repeat purchase of a given brand or purchasing a product from a particular firm. Over the past few years, firms in different economic sectors are increasing their interest in integrating customer loyalty in their operation. Kuusik (2007, p.4) asserts that attracting new customers while at the same time retaining the existing loyal customers is a key element for organizations long-term success. Management team of firms in different companies should integrate the concept of customer loyalty in developing their business model. This means that firms should make customer care a key element of their business strategy (IOD, 2009, p. 2).

Various theories in relation to customer loyalty have been advanced by a number of scholars. Kuusik (2007, p.5) asserts that one of these theories relate to behavioral loyalty. This theory asserts that customer loyalty is a direct function of the total purchases, buying pattern and frequency or probability. Behavioral theory considered customer loyalty to be an element of brand loyalty by considering repeat purchase behavior. Improvement of this theory resulted into integration of behavioral aspect with attitudinal aspect. This resulted into integration of psychological aspect of customer loyalty (Kuusik, 2007, p.5). Through these approaches, it has become possible for firms to evaluate customer loyalty either on emotional or behavioral aspects (Cater & Cater, 2009, pp.1151-1169).

Objectives

The aim of the study will be divided into overall objective which is further divided into a number of specific objectives for comprehensive analysis.

Main objective

The core objective of the study will be to determine how firms in Hong Kong insurance industry can cultivate customer loyalty to develop competitive advantage.

Specific objective

• To determine the factors that affect customer loyalty in insurance industry.
• To evaluate the extent to which firms in Hong Kong insurance industry have integrated customer loyalty in developing their business strategy.
• To evaluate the strategies that insurance companies have integrated in cultivating customer loyalty.
• To determine the factors that customers consider in purchasing insurance products from insurance companies.

Research questions

1. What key factors should insurance companies integrate to develop a high customer loyalty?
2. Has the concept of customer loyalty been effectively integrated by firms in Hong Kong insurance industry?
3. What are the factors considered by individual and institutional customers in purchasing insurance products?
4. How does customer loyalty affect the success of insurance companies?
5. How can insurance companies attract and retain customers in its operation?

Rationale and justification

Hong Kong insurance industry has witnessed rampant growth over the past few years. This has resulted from the liberal nature of the market. This has made the country to be an epicenter of insurance in Asia. For instance, the country has attracted a large number of the top insurance companies (Insurance in Hong Kong, 2010, para.8).

Considering the intensity of competition, development of customer loyalty by firms in this industry is paramount. In conducting the study, both approaches to customer loyalty will be analyzed. Insurance companies are faced with a challenge to cultivating customer loyalty in their operation. Cultivation of customer loyalty by firms in this industry is being conducted in an unsystematic manner. For instance, one of the major strategies that insurance companies have integrated over the years to integrate customer loyalty is financial motivations. However, these strategies have not been effective in the process of insurance companies developing competitive advantage.

Research method

The study will specifically focus on Hong Kong insurance industry. The research will be conducted by integrating both qualitative and quantitative research designs. Lisa and Axinn assert that integrating the two methods results into an improvement in the effectiveness of research (2006, p.29). Creswell (2003, p.205) defines a research design as a framework which assists the researcher in collecting the necessary data to conduct a study regarding a certain phenomenon. Qualitative research will enable ease in evaluating descriptive characteristic of customer loyalty. In addition, qualitative research design will be used since the research will mostly be exploratory. Quantitative research design will make it possible for the qualitative data to be expressed in quantitative terms. As a result, it will be easy to condense the data for easier analysis.

Random sampling method will be used in selecting the study sample from the entire population. This will eliminate bias by ensuring that all the firms have the same probability of being selected (Saunders, Lewis & Adrian, 2003, p. 35). Primary and secondary methods of data collection will be used. The primary methods to be used include use of questionnaires and interviews. On the other hand, secondary methods of data collection will entail studying published reports which have been posted on the companies website and from firms that develop business reports.

Reference List

Axinn, W. & Pearce, L. 2006. Mixed method of data collection strategies. New York: Cambridge University Press. 2006.

Cater, Barbara & Cater, Tomaz. 2009. Emotional and rational motivations for customerloyalty in business to business professional services. Vol. 29, issue 8, pp. 1159-1169.Slovenia: University of Ljubljana. Web.

Creswell, J.2003. Research design: qualitative, quantitative and mixed method approaches. Newbury Park, CA: Sage Publishers.

Economy Watch. 2010. Hong Kong insurance industry. Web.

IOD. 2009. Building customer loyalty. Web.

Kindurys, V. 2009. Theoritical and methodological aspects of insurance customer loyalty and its cultivation. Lithunia: Vilnuis University. Web.

Kuusik, A.2007. Affecting customer loyalty: do different factors have various influences in different loyalty levels? Tartu: University of Tartu. Web.

Romano, N. & Fjermestad, E.2006. Electronic customer relationship management. New York: ME Sharp Publishers.

Saunders, Mark, Lewis, Philip & Thornhill, Adrian.2003. Research methods for business students.. New York: Pearson Education Limited/ Prentice Hall.

TheLowtax.com. 2010. Insurance in Hong Kong. Web.

There are several ways that an organization can transfer its risks through commercial insurance in the insurance market. This includes catastrophe bonds, collateralized reinsurance, large deductible plans, weather-based derivatives, risk retention groups, sidecars, and captives. Traditionally, many companies and business organizations manage risk by transferring it to the insurance company. This was attained through insurance policy purchases or fund allocations to meet the expected loss. Currently, many large organizations prefer using captive insurance as a risk management tool. Captive insurance is a type of insurance where the insurer fully owns the company, which provides services to the parent company, majorly risk mitigation. This form of insurance is formed when the parent company cannot find an external organization that will handle the business risks.

Commercial insurance is an effective method through which business organizations relocate their risks. Despite this insurance being an efficient way of diverting unsystematic risks, it has changed the handling of systematic risks (Nguyen & Vo, 2020). It can handle the risks that antedate from unsystematic risk as per the traditional loss history and law of large numbers. It evaluates the relationship between premiums and risk through actuarial calculation (Bickley & Michel, 2018). Systematic risk is challenging to estimate, making it impossible for commercial insurance companies to have difficulties mitigating them (Bickley & Michel, 2018). However, many companies are prepared to pay for the huge premiums that concur with the price of risk in the market. Parent firms have opted for captive insurance to mitigate the inevitable systematic risk because of its benefits in risk transfer and retention.

Benefits

The organizations benefits from setting up captive insurance rather than commercial insurance force large organizations to opt for this type. It enables the organization to reduce or stabilize its insurance prices by lowering personal and marketing costs, reducing the financing expenses, and the likelihood of the insurance owners to consent to the least underwriting profit (Pierpaolo & Michele, 2017). This program is crucial as it provides the owners with an upper hand during the regulation of the policy, such as shielding the profits of its underwriting policy (Pierpaolo & Michele, 2017). The company using this insurance policy can retain risk so long as they have an excellent loss ratio in the captive. Through the captive, the organizations insurance premium is dependent only on its loss-making it less vulnerable to the loss generated by other insured parties. Captive insurance is significant as it can cater to the organizations hard-to-insure or emerging risks. Furthermore, the organization can access the reinsurance market wholesale, thereby decreasing the overheads of the reinsurance to the parent.

The parent organization can access improved risk management and loss control through captives since the company has significant insight into risk control. Reinsures enjoy the benefit of having the insured company involved financially in the risk through the captive (AICPA, 2018). Additionally, certain risks, such as sensitive product liability and environmental impairment, are difficult to handle in the traditional market, irrespective of the claim history (AICPA, 2018). In such events, captive insurance creates a potential solution to boost the financial cash flow linked to risk management. From a broad perspective, captive insurance is a significant source of extended financial strength, attractiveness, and competitiveness for the parent organization (Pierpaolo & Michele, 2017). This insurance has placed risk management on a higher level in most multinational organizations by aligning the support of company boards and their interests. This is vital as it helps the parent company manage and review all the risks presented, incorporating those the organization decided to retain.

Captive Insurance Challenges

However, the development of captive insurance for an organization poses various challenges to the parent company. Its setup requires a significant capital outlay and maximum commitment of resources and time from the parent organization (Kossovsky, 2017). This leads to an increment in the cost of the captive, which leads to a substantial reduction in the premium savings the parent company expected compared to traditional insurance organizations. Additionally, it requires substantial expertise that will help maintain its quality. Achieving this quality requires service providers such as qualified insurance experts.

However, the selected managers need to have varying degrees that align with the parent companys culture. There is also a challenge in the way insurance companies operate based on the concept of risk pooling. The room for risk spreading may be restricted, leading to fluctuations in the cost. Whenever the parent companys business plan changes, the captive may not be useful in managing the organizations risk (Kossovsky, 2017). During such events, the captives only way is a run-off, which triggers additional expenses that are not beneficial to the economy and the parent company. Captive insurance has also been associated with illicit activities such as tax evasion, fraud, and money laundering in the insurance market scope. This has made policymakers and regulators mitigate these activities by setting up strong policies such as appointing anti-money laundering officers and including independent directors that are not on the organizations board. The insurance manager strictly maintains supervisory on the captive insurance because of the illicit activities above.

Conclusion

In conclusion, captive insurance has gained momentum in the current period because of its multiple benefits to large firms. Commercial insurance has a significant problem in mitigating systematic risks despite companies paying enormously to handle the market risk. This has made most organizations shift to captive insurance. The benefits of captive insurance include reducing insurance prices, marketing costs, and financial expenses. Its regulation gives the parent company the upper hand as it can shield its underwriting policys profits. The company becomes less vulnerable to losses that other firms have garnered. The company has easy access to the wholesale reinsurance market. However, it has various drawbacks that affect the parent company. It requires significant funds to set up, requires substantial expertise to align with the companys culture, and is subjected to stringent regulations. Furthermore, it is linked with illicit activities, making policymakers implement tight policies.

References

American Institute of Certified Public Accountants (AICPA). (2018). Captive insurance entities. Audit and Accounting Guide, 471-480. Web.

Bickley, H., & Michel, G. (2018). Insurance pricing and portfolio management using catastrophe models. Risk Modeling For Hazards and Disasters, 235-246. Web.

Kossovsky, N. (2017). Private equity firms must ensure that captive insurance companies meet stringent government requirements. The Journal of Private Equity, 20(4), 34-35. Web.

Nguyen, D., & Vo, D. (2020). Enterprise risk management and solvency: The case of the listed EU insurers. Journal of Business Research, 113, 360-369. Web.

Pierpaolo, M., & Michele, S. (2017). Embracing change: the regulatory evolution of captive insurance companies. Insurance Regulation in the European Union, 377-397. Web.

The insurance sector is growing day by day in India but some people still feel that Life Insurance is not required for financially sound people. But, it is not the case. Some section of individuals merely takes Life insurance for its tax deduction benefits and low amount of premiums not thinking about their financial goals and family needs. Thus, life insurance is a risk cover that does not disturb the savings of the policyholder and provides financial solvency and protection to the dependents of the insured.

Thus, this research paper tries to find out the awareness of Life insurance among people, the primary objective of buying a life insurance policy, the amount of premium preferred by them and etc. We have surveyed the views and opinions of different people by using the questionnaire method.

Introduction

In India, the insurance business is classified primarily as life insurance and general insurance. Life insurance is basically associated with the risk to human lives. Life insurance provides protection to a household against the premature death of its breadwinner or income-earning member.

Definition: According to J.H. Magee, “The life insurance business embodies an agreement in which broadly stated, the insurer undertakes to pay a stipulated sum upon the death of the insured, or at some designated time to a designated beneficiary.”

Therefore, life insurance or life assurance is a contract between the policy owner and insurer (insurance company) where the insurer agrees to pay a sum of money upon the occurrence of the individual’s or individual’s death. In return, the policyholder/owner of the policy agrees to pay a stipulated amount or premium at regular intervals for a long-term period or in lump sums.

The insurance sector was set up in the year 1999 which facilitated the entry of private players into the industry with an annual growth rate of 24.31% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. In the year 2011, major structural changes took place with the ending of the Government monopoly and the passage of the Insurance Regulatory & Development Authority bills, lifting entry transactions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership.

Objectives of study

• To study the awareness of life insurance among people and their various premium payment requirements.
• To study the primary goal of purchasing a life insurance policy among individuals.

Review of literature

Study of “Awareness of Life Insurance among customers of DHFL Pramerica Co. Ltd” (2019) is a research paper by Dr. Rishikesh Kaakandikar and Ms. Priyanka Dongre which checks the attention concerning want of Life Insurance among the buyers of the above specified company’s life insurance policy. This analysis discovered that the customer’s area unit is aware of the want of insurance in their life and also the individual agents of DHFL Pramerica area unit are the key supply of information for the policyholders.

“An Empirical Analysis of Life Insurance Industry in India”, by Harpreet Singh Bedi and Dr. Preeti Singh is a research paper in which an attempt has been made to analyze the overall performance of the Life Insurance Industry between the pre and post-economic reform era. To measure the current status, the volume of competition, and challenges faced by the Life Insurance Corporation of India and to measure the effectiveness of the investment strategy of LIC over the period 1980 to 2009. The study reveals that there is tremendous growth in the performance of the Indian Life Insurance Industry and LIC due to the policy of LPG.

Scope of study

• A life insurance policy offers full protection against the risk of death and acts as a provision for financial safety for an individual or his nominee.
• Life insurance allows a person to pay premiums in easy installments per the convenience of customers.
• The amount paid as a Life insurance premium is subject to tax deduction subject to the prevailing income tax rates.
• It is a safe and profitable investment since it is governed by Insurance Regulatory and Development Authority (IRDA) which keeps a constant watch on the financial position of Life insurance companies.

Research Methodology

Sample size: Responses from 50 people starting from the age range of 15 years were collected.

Research design: Feedback from individuals was collected through a questionnaire method in order to understand whether their preferences related to a specific insurance company, the amount of premium they would like to pay annually, etc.

Hypothesis:

• H0: There is no significant awareness about Life insurance among people.
• H1: There is significant awareness about Life insurance among people.

Data analysis

1) Which company’s life insurance policy do you hold?

This graph shows that out of 50 respondents, 20 people prefer to buy a policy from LIC, 5 people from AXIS, 14 from ICICI, and 15 from Oriental Bank of Commerce.

2) Which type of life insurance policy would you like to take?

This pie chart clearly depicts that 24 people prefer to take term plan, 8 individuals would like to take endowment plan, 15 people prefer Money back plan, Whole life plan is preferred by 1 person and ULIP is preferred by 2 people.

3) For how many years would you be willing to pay a premium for a policy?

From this diagram, it can be understood that 26 people think 5-10 years premium payment as a suitable option, 9 people consider 10-15 years premium payment whereas 15 people prefer 15 years or more option.

4) What is the primary source of information to obtain knowledge related to a particular Insurance policy?

From this diagram, it is visible that 30 people prefer insurance agents to be safer and the primary option to obtain policy-related information, 10 people consider advertisements whereas 10 people consider other options.

5) Through which medium do you prefer to purchase a life insurance policy?

From this diagram, it is shown that 38 people think the offline method is a better alternative for purchasing a life insurance policy as compared to the online method.

6) What is your main objective in taking a life insurance policy?

From this diagram, it can be clearly observed that 30 people consider risk coverage as the primary objective of purchasing a life insurance policy, 15 people see it as a good Savings option and tax exemption is preferred by only 5 individuals.

7) The amount of premium which you intend to pay annually?

From this diagram, it can be seen that 33 people intend to pay an annual sum of premium less than Rs.5000, 11 people would intend to pay an amount between Rs.5000-10,000 and 6 people prefer to pay a sum of more than Rs.10,000.

Findings:

• Maximum individuals prefer to hold Life insurance from LIC.
• Maximum people prefer a term plan as the best scheme of the life insurance policy.
• Maximum people prefer to pay a premium of a policy for a period of 5-10 years.
• Maximum people consider insurance agents as the best option for obtaining policy-related information.
• Maximum people prefer the offline method to be the most convenient method of purchasing a life insurance policy.
• Maximum people consider risk coverage as the main objective of buying an insurance policy.
• Maximum people prefer to pay an annual premium of less than Rs.5000.

Suggestion

Life insurance companies must appoint trustworthy and honest insurance agents who can provide proper guidance to individuals about which policy to buy as per their financial or family-related goals. This would encourage more people to purchase a life insurance and help them know its benefits.

Advertisements must be published through newspapers, radio, all television channels, and the internet to make every economic class and rural and urban region people aware of how inevitable life insurance is for a person as well as his family members.

Conclusion

From this research project, we conclude that there is significant awareness about Life insurance among people. Thus, we accept the alternate hypothesis (H1).

Life insurance is a premier option which provides risk coverage without affecting our savings. Also, it offers multiple benefits like savings alternative in case the amount of life insurance is obtained during the maturity period.

Since the introduction of Life insurance in India, Insurance agents still prove to be a popular mode of seeking information related to policy details and explanation of its clauses.

References

1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2450163
2. The research paper published in International Multidisciplinary E-Research Journal (Jan 2019) – Impact factor (SJIF)-6.261 on the topic “Study of Awareness of Life Insurance among Customers of DHFL Pramerica Company Ltd” written by Dr. Rishikesh Kaakandikar and Ms. Priyanka Dongre.
3. An Overview of Insurance sector- a book by N. Lakshmi Kavitha and Lakshmi Chandrasekaran.
4. https://www.iciciprulife.com/insurance-library/insurance-basics/benefits-of-life-insurance.html

Risks and insurance

Abstract

This paper will discuss what money insurance is about and the benefits provided from being insured. In this regard, this paper will study on the crimes committed while money is in transit and in premises. The act of forcible and violent entry upon premises due to armed or unarmed robbery with visible evidence will ensure that the insured is compensated. The increasing crime rate in Malaysia will also be studied from the view of unemployment rate. The conclusion drawn is that money insurance would be able to provide financial support and security protection for the insured. Through this paper, we hope to bring more clarity on money insurance policy to our readers.

Introduction

Money insurance covers money that has been stolen, destroyed, or damaged. In short, money insurance can be described as a policy that compensates the insured from money loss. Regardless of whether the person in charge is on his or her way to the bank to deposit the business income for the afternoon or if he or she wants to keep the money at the business premise itself, having money insurance could spare the business owner from startling financial loss in case of burglary or robbery.

Money includes cash, bank, and currency notes, cheques (other than blank or partially completed), checks for passengers, drafts for banks, postal orders, money orders, postage stamps, unexpired units on franking machines, trade stamps, gift coupons, bills of trade, travel fares, calling cards, credit cards and charges. Cover will be up to the maximum of sums covered. Certain restrictions will apply including the maximum amount to be stored in different safe/fortified rooms and the maximum amount to be transported per transit.

There are a few main situations where the loss can be compensated or covered by the insurance company. The first situation is where the cover is available for money taken from the bank to the covered premises for payment of salaries, wages, and other profits or for minor cash in direct transit. Next, cash other than that was mentioned in the first situation in the personal possession of the insured or the insured’s approved employees while in direct transit between the premises and the bank or post office. The third situation can be covered when money other than that mentioned in first and second situations obtained by and in the personal possession of the insured or the insured’s approved employees while in transit to the premises or bank within 48 hours of collection.

There are also many exclusions that exists in this policy where this policy such as it is not liable for an any shortages due to mistakes or inaccuracies. The loss of money and/or property destruction assigned to anyone other than the policy owner, the authorized agent, or the authorized employees of the policy owner. Next, loss of money, if the policyholder or his or her designated representative/employee are involved as principal or accessory, and damage to property. Apart from that, loss due to fraud or deceit of the cash carrier who is designated representative/employee of the policy owner who happens while in transit and discovered within 48 hours. Damage incurred directly or indirectly by or as a result of war and battle, invasion, foreign enemy act, warfare (whether declared war or not), civil war, uprising and revolt, and many more.

The few required information that must give to the insurance company are estimated annual cash transfers where the regulation can be changed at the end of the policy duration to reflect actual transactions and descriptions of any safes or strongrooms. This includes information of the supplier, model, weight, and dimensions of the safe or strongrooms.

Literature review

Money insurance promotes the policy of having your back when you are travelling to the bank with the earnings of the day. The cash-in-transit industry transports banknotes and other valuable goods between customers, especially between financial organizations, and are constantly exposed to risks. It is estimated that more than £500 billion is being transported each year in the United Kingdom. Some robberies are able to attract huge media coverage for example, the 300kg of gold robbed in Italy and, in that same month, a €50 million robbery in Belgium (L. Talarico, 2015).

These robberies on cash-in-transit couriers could be a source of funding for large organized crime. The British Security Industry Association showed recent statistics of attacks against cash-in-transit couriers and it is a growing problem throughout the world (British Security Industry Association, 2013). It is well-known that these vans are an attractive target because the results are lucrative. Therefore, these whales attract more ‘professional’ robbery attacks (Gill, 2001).

Cash-in-transit guards have to work under dangerous and stressful conditions transporting valuable goods, with the risk increasing in South Africa. They may suffer burnout, where they are emotionally and physically exhausted, due to prolonged stress and lack of social support (Poisat, 2014). Cash volumes have doubled since 2003, with as much as 60% payments being paid in cash (Focus, 2012). Cash-in-transit services increased while these financial organizations and cash-in-transit institutions have become targets of violent and confrontational robberies. These crimes include violent attacks on the vehicles and professional personnel, according to the 2012 Overseas Security Advisory Council’s (OSAC) South African Crime and Safety Report.

Besides being a tempting target for robbers, the situation where the money would be provided to ATMs with fixed locations, which is often in public places, the risk of being attacked is higher. In the Republic of Macedonia, the robbers often use firearms of pistols and automatic rifles, and cars (Babanoski).

There is another paper showing robberies of service stations and pharmacies in Australia. Service stations in Australia are what we call gas stations and they are open for long hours with minimal staffing during their night shift. The fact that they also keep cash on the premises is also another contributing factor for robbery or theft (Rotherham, 1999).

On the other hand, pharmacies are targeted because they sell drugs and have stores of it kept on premises (Rotherham, 1999). It is discovered that 80% of robberies against service stations had only one staff member on shift while 52% of pharmacy robberies had two or more staff members on duty. However, the paper concluded that service stations have higher risk of being robbed compared to pharmacies because 80%of recorded robberies are armed (Taylor, 2002). Although there are different types of property taken during robbery incidents, the most common report of property taken was cash; in approximately 6 out of 10 incidents (L Smith, 2007).

(D’Alessio, 1990) studied a demographic of 30 randomly sampled convenience stores in Leon County, Florida. The study showed that environmental factors are not the main indicators but the degree of social disorganization, parking lot size, operating hours, and whether the store provides gasoline service. These factors are significant in determining whether a store would be robbed. Majority of robbery cases involved confrontation between a victim and several unknown offenders (Cook, 1983). Victims are more likely to sustain physical injuries when the offenders are unarmed because the victims are less likely to yield (Hindelang, 1978). However, offenders in most convenience store robberies are armed. As a result, the probability of the victim being injured is reduced (Crow, 1975).

South Africa, on the other hand, had experienced an increase in armed robbery and crime rate. From studying a sample of 39 victims who were assaulted, personal neglect, poor security measures, or ignorance by employees created opportunities for armed robbers (Pretorius, 2008). Among other factors, the increase in crime rates is also caused by factors of high unemployment rate and social problems associated with poverty (National plan of action: roll back xenophobia campaign, 2000). Besides that, illegal immigrants, with millions estimated, from war-torn African countries have several numbers of cases responsible for the increase in armed robbery and assault.

Findings

Money insurance can be defined as insurance provides coverage against loss or damage to a business premises (such as cash or currency) in the event of misfortune. Meanwhile, there are still some conditions that are not coverage under this insurance, such as the losses arising by the dishonesty of insured holder, loss from an unattended vehicle, the war and the act of terrorism and etc. The insured can be held liable for its losses without violating any of the conditions in the policy agreement.

Nowadays, the public security has become complicated and unsecured. The unemployment rate in Malaysia was raise to 3.3% from October 2019 to December 2019, thus it means people with jobless is increase outside there (Malaysia Unemployment Rate, 2019). Individual will typically be facing financial problems because of high expenditures but with no income. This situation may lead people to do something illegal, such as robbery and theft, to get money. According to the studies from Numbeo, figure 1.0 showed level of crime is listed with a high amount of 62.40%, and the safety rate of walking alone is very low. The study by (Tang, 2007) found that inflation and unemployment rates are important factors of crime in the United States. The study states that even though unemployment rate is negatively related to crime rate in the short run, it has a positive relationship in the long run.

From the international standard of criminal cases, Malaysia is considered relatively low and manageable compared to countries of high crime rates like Mexico and Estonia. However, the increasing crime rates in Malaysia created an urgency and public awareness on this topic. Besides the increasing crime rate trend, it is reported that the Royal Malaysian Police (RMP) in understaffed and underequipped and are also inefficiently distributed among Malaysian States (Ohashi, 2004).

Figure 1.1: Crime rates in Malaysia (Source: NUMBEO.com)

Beyond that, the figure 1.2 showed that Kuala Lumpur range the highest crime rate among the states in Malaysia. Nevertheless, figure 1.3 shows the largest type of crime is unarmed robbery, which is the act of force or assault, to take money from the victims, without using any dangerous weapon. Even though the robber took their money without using any weapon, the victim will still get injured from the incident and lose their valuables things because they are less likely to yield to an unarmed robber. For example, when people withdraw their funds from financial institutions, they might be robbed inside or outside the premises and it may cause the victims to loss their money and get injured.

Figure 1.2 Average index crime rate per 100, 000 of the population, by state, 2010-2017 (Source: MOHA and DOS (Author’s calcualtion))

Figure 1.3 Total number of violent crime cases reported per 100,000 of the population, in KL and Selangor, by type, 2010-2017

(Source: MOHA and DOS (Author’s calcualtion))

Besides that, robbery will not only occur on individual, but company or businesses also. According to the studies from NACS, the number of robberies in convenience store rose 6.7% from year 2015 to 2016 (FBI Releases 2016 Crime Statistics, 2017). Along with the report from NACS, it shows that the business premises such as convenience stores are often targeted by robbers and thus, the business holder will face a huge loss if their store gets robbed.

In order to reduce the potential losses from event of robbery or theft, insurance is a best way to cover the lost amount from the incident occurred. As insurance company provide financial support and security protection for the insured to reduce their losses from accident. In other words, insurance is able to manage the risk exposure and transfer the cost of potential losses to the insurance company. This is because insurance companies play the role of pooling money and pay-outs when there is a claim from the insured for their losses. Moreover, purchasing appropriate insurance policies will effectively help to ensure loss and health recovery in the event of an accident. Since businesses and individuals are likely to be robbed nowadays, it is a wise and practical choice to be insured. They only need to pay a certain monthly fee or insurance premium in exchange for lower costs in the event of misfortune. As a conclusion, the money insurance policy is strongly recommended, as it covers the cash lost and compensates the insured from robbery cases also (Money Insurance, 2020).

Conclusion

Insurance is the best way to make up for the amount lost after an accident. Money insurance can provide protection losses of money during in transit between bank, insured’s premises, and other specific locations due to robbery, theft, or other accidental causes. It also provides protection for money losses in business, vaults or safe. To avoid this risk, you need to have a special ‘money’ insurance. Money insurance can protect bank drafts, checks, postal and payment slips that are stored securely or in transit. Losses from robbery or accidents will be compensated.

There are a few main situations where the loss can be compensated or covered by the insurance company. However, there are some widespread exclusions. For example, such plans do not cover loss of money due to mistakes or negligence, employee fraud, loss or damages of money on the way to the mailing, or personal storage for more than 48 hours by authorized employees. Some insurance company provides financial support and security protection for the insured to reduce their losses from an unexpected accident.

References

1. Babanoski, K. I. (n.d.). Criminalistics and Operative Aspects of the Attacks on the Cash In Transit Vehicles in the Republic of Macedonia. 21-36.
2. Cook, P. (1983). Robbery in the United States: An Analysis of Recent Trends and Patterns. Illinois: U.S. Dept. of Justice, National Institute of Justice.
3. Crime Trends and Patterns in Malaysia. (2019, August). Retrieved from Kyoto Review of Southeast Asia: https://kyotoreview.org/trendsetters/crime-trends-and-patterns-in-malaysia/
4. Crow, W. B. (1975). Robbery Deterrence: An Applied Behavioral Science Demonstration. California: Western Behavioral Science Institute.
5. D’Alessio, S. S. (1990). A Crime of Convenience: The Environment and Convenience Store Robbery. Environmental Design Research Association: Sage Publications.
6. FBI Releases 2016 Crime Statistics. (2017, September 26). Retrieved from NACS: https://www.convenience.org/Media/Daily/2017/Sept/ND0926175
7. Focus, S. (2012). Where cash is king, holistic security solutions are key. Security Focus.
8. Gill, M. (2001). The Craft of Robbers of Cash-in-transit Vans: Crime Faciliators and the Entrepreneurial Approach. International Journal of the Sociology of Law, 277-291.
9. Hindelang, M. J. (1978). Victims of Personal crime: An Empirical Foundation for a Theory of Personal Victimization. Ballinger Publishing Co.
10. L Smith, K. D. (2007). Armed robbery in Australia: 2007 National Armed Robbery Monitoring Program annual report. Canberra: Australian Institute of Criminology .
11. L. Talarico, K. S. (2015). Metaheuristics for the Risk-constrained Cash-in-Transit Vehicle Routing Problem. European jourrnal of operational research, 457-470.
12. Malaysia Unemployment Rate. (2019). Retrieved from CEIC: https://www.ceicdata.com/en/indicator/malaysia/unemployment-rate
13. Money Insurance. (2020). Retrieved from PIAM: http://www.piam.org.my/consumer/general-insurance-products/commercial-lines/money/
14. National plan of action: roll back xenophobia campaign. (2000). Retrieved from South African Human Rights Commission: https://www.sahrc.org.za/index.php
15. Ohashi, Y. (2004). Asia Times Online. Retrieved January 2008, from Malaysia: More police and still more crime: http://www.atimes.com/atimes/
16. Poisat, P. M. (2014). Social support key to cash-in-transit guards’ psychological wellbeing. Problems and Perspectives in Management, 312-318.
17. Pretorius, R. (2008). Armed Robbery, Violent Assault and Perceptions of Personal Insecurity and Society as a Risk. Acta Criminologica: Southern African Journal of Criminology, 81-91.
18. Rotherham, S. (1999). Employers told to fix up security or else. Security Australia, 18-19.
19. Tang, C. L. (2007). Will inflation increase crime rate? New evidence from bounds and modified Wald tests. Global Crime, 311-323.
20. Taylor, N. (2002). Robbery Against Service Stations and Pharmacies: Recent Trends. Canberra: Australian Institute of Criminology.

The issue of privacy and personal data security is one of the foundational rights of any U.S. citizen. However, while maintaining this right and safeguarding people’s personal information from security breaches has always been quite a challenge both for state and private organizations, with the creation of the online environment and digital data storage options, it has become particularly difficult. By teaching about the key approaches to securing citizens’ privacy, as well as crucial regulations for post-incident management and citizens’ notification, this course has helped me to understand the intricate nature of the subject matter and taught me how to navigate the complex legal environment of digital data protection and security breach management.

The importance of understanding the differences between the laws accepted in different states was also instrumental in gaining insight into the issue of private data protection and the related notification standards. Namely, the discrepancies regarding the notification time were quite peculiar to discover since they implied difference in the extent of efficiency and the possibility of a delayed response.

Moreover, learning about the means of protecting citizens’ privacy in the environment of the digital setting was vital. Since the online context includes a range of threats that are endemic to the specified setting. It is critical to study it in depth in order to be prepared when addressing digital threats. Moreover, the nature of cyberattacks on customers’ data is entirely different from the instances of data breach for physical information storages. Although the sue of digital protection and options for data management has its advantages, it also implies challenges for keeping data protected against the threat of cyberattacks, which become increasingly more sophisticated and intricate with every month (Romanosky et al., 2019). Therefore, the when it comes to ensuring safety of customers’ data, it is critical to be ahead of the threat and create preventive measures that reflect the latest innovations in the field, which must be represented in the law accordingly.

Finally, the issue of mitigating adverse results of data security breach from a legal perspective has been examined thoroughly throughout the course. Specifically, it was crucial to find out the multiple strategies that should be implemented in order to prevent the further data leakage from happening, as well as alert the customers and the parties involved, including respective authorities. Although the described issue is also highly varied from state to state, learning the general guidelines for managing the outcomes of data security breach was vital for embracing the full extent of responsibility that an organization must face in the described situation. In fact, the issue of liability for an instance of a security breach was quite curious to examine since it was also different across the U.S. Overall, the information that the course has provided has allowed me to understand and embrace the framework for addressing the cases of personal data breach (Morrow, 2018). Additionally, the course has given me several ideas of how personal data theft can be avoided in the first place. Namely, active education of the target population should be seen as a solution.

Incorporating essential guidelines for managing privacy issues and providing insights into the complex nature of the associated legal issues, this course has been an important step in exploring personal data regulations in the U.S. Due to a combination of lecture materials and discussions that involved active knowledge sharing, I managed to learn a substantial amount of details concerning the management of personal data security issues in different states.

References

Morrow, P. J. (2018). The new age of cybersecurity privacy, criminal procedure and cyber corporate ethics. Journal of Cybersecurity Research (JCR), 3(1), 19-28.

Romanosky, S., Ablon, L., Kuehn, A., & Jones, T. (2019). Content analysis of cyber insurance policies: How do carriers price cyber risk?Journal of Cybersecurity, 5(1),1-19.

Introduction

Social insurance can be described as a program that is sponsored by governmental organizations where people transfer their risks. Social insurance is characterized by the benefits it provides to those who have been covered by its programs where their risks are put together and then compensated when need arises. A number of programs in U.S have been found to meet the definitions of social insurance among them being Medicare, railroad retirement, unemployment insurance and social security. (Benjamin 25)

Partial Disability and Reasons Why It’s Not Treated as a Part of Disability Income Security Policy

Partial disability is the condition where someone becomes unable to perform some of the duties that he would perform comfortably before suffering from sickness or being injured. This means that the individual is disabled since he cannot be as productive as before but at the same time, he has not been rendered totally helpless or disabled. Partial disability is also described in terms of the period in which disability persists. When disability persists for a period exceeding twelve months, then it is no longer referred to as partial disability. Partial disability is therefore not included in the policy of income security that covers those who are totally disabled. This is because of the difference existing between the two types of disabilities since a partially disabled person can perform various duties from which he can generate income unlike the individual who is totally disabled. This difference renders the partially disabled individual from being eligible for benefits of the policy of income security designed to cover the disabled. (Benjamin 26)

Integration of Functions of the System of Health Care In Social Insurance And How the Current Health Insurance Programs Cover the Old, the Working and the Young

The system of health care carries out a number of functions which include delivery of health care, where different problems related to health are catered for. It also caters for some financial expenses for those individuals who do not have coverage for their health care in the various programs of social insurance. However, the system of health care has not been able to comfortably provide these services to people due to financial constraints, which calls for the need to have them integrated in social insurance which would be in a better position to provide them to the needy population. Programs of health insurance have been found to treat the various categories in the society differently while covering their health related risks. That is, the old are treated differently from the working class as well as young thereby having a varying coverage of health insurance. The variation is mostly caused by enrollment rules that are put forward by programs that provide coverage for health care. The available enrollment rules have been found to affect a large population of Americans including the children.

It has been estimated that, about forty five million of the people leaving in America do not have coverage for health insurance. The category that is highly represented in this group of the uninsured is the working population basically due to lack of coverage for health insurance by their employers and also due to the amount of money they earn. Some Americans in the working population earn more money than is required in order to be covered by programs of health insurance but at the same time, they earn a lesser amount to get covered by plans of health insurance that covers individuals.

Children have a higher coverage of health insurance than adults since some states in America, like California, provide coverage of health insurance to children thereby increasing their number in the population that is covered. The higher number of children who are insured is also caused by the situation where some children qualify for insurance coverage under the eligibility of their parents in those programs that provide coverage for the entire family’s health condition. Coverage for the old population is slightly lower than that of children but higher than that of working population. The old population is more likely to get themselves covered by programs of health insurance more than the working population because of their higher vulnerability to diseases and other health related problems that come with old age. However, their vulnerability results to increased premiums for their coverage in plans of health insurance that are designed to cover individuals. (Kathleen 56)

Possible Reasons to the Decline of Unemployment Insurance Coverage

Unemployment insurance is one of the various programs of insurance coverage provided in social insurance. Current studies have found that, the number of Americans covered by programs of unemployment insurance has decreased from eighty percent to about thirty eight percent. This decrease has been because; part of the unemployed population has failed to contribute to unemployment insurance because; their occupation does not qualify for unemployment insurance, for example, those who have employed themselves. The other reason is the situation where some Americans leave their occupations due reasons that have not been included in the criteria that holds them legible for coverage of unemployment insurance, for example, those leaving their jobs voluntarily. (Kathleen 57-59)

Major Impacts Of Women’s Earnings On Family Economic Security And How Female Labor Supply Influence The Adequacy And Coverage Of Current Unemployment Insurance System

It has been found that, the number of women in labor force have greatly increased since 1930s. This has had a positive impact on the economic security of families as women’s earnings increase family’s security economically. It is evident that, women play a major role in taking care of children as well as other members the family when compared to men. Therefore, when women are employed, the money they get is most likely to benefit their families by getting better standards of living. Despite the increased rate of women in labor, it has been found that, they earn a considerably less amount than men. This situation of having lower earnings have caused a greater representation of women in unemployment programs which is also contributed by their higher life expectancy. However, there are a few areas that need to be revisited in the changes that have been proposed concerning ways in which benefits should be distributed between couples. Proposals to those changes affect women since their benefit are expected to be reduced by a larger amount than the reduction in men’s benefits. This area should be revisited in order to correct the situation in favor of women considering their roles in family setups. (Benjamin 27)

Interaction and the Situation of Boundaries among Retirement, Disability and Unemployment in the Social Insurance Systems

The programs that comprise the system of social insurance are disability programs, unemployment programs as well as retirement programs. There is a certain level of correlation among these types of programs which makes boundaries between them unclear. This is primarily because of the fact that one situation leads to the other. A disabled person is most likely to loose his job which makes him consider getting covered by unemployment insurance. Retirement programs are also related to both disability and unemployment programs since a large number of employees are covered by retirement insurance. An employee suffering from a certain disability may decide to get an early retirement due to inability to work thereby benefiting from both unemployment as well as retirement programs. (Kathleen 60-61)

Conceptual Problems about Income Security for Children and Ideas of Their Coverage in the Program

There have occurred controversies about ways in which children should be covered by programs of income security. Ideas explaining distribution of coverage of children in income security include the situation where children are normally covered under their parents’ employment benefits. This only caters for those children whose parents are employed and are covered by the program of income security. Secondly, SCHIP program has been designed to cover children from families with low incomes. SCHIP does not provide coverage for children whose parents are eligible for state benefits accorded to employees through income security. The third one is where SCHIP which is a program covering children’s health does not have a provision for children whose parents benefit from income security but may be in need of services provided by SCHIP. This has raised much concern requiring changes to be made to rules of SCHIP program. (Benjamin 28-29)

Description and the Reasons to Favor an Expense-Based Rather Than an Income-Based Subsidy

Due to continued rise in standards of living, the government has been intervening by subsidizing consumption of necessities which it carries out through subsidies that are income based and those that are expense based. Subsidies that are expense based are preferred than those that are income based since the later are normally provided through tax credits which primarily depends on ones level of income. However, subsidies that are expense based are provided in terms of needs and they cut on the amount that should be paid for the subsidized needs like housing. This one caters for all citizens equally unlike a subsidy that is based on income which is irregularly accorded to citizens. (Kathleen 62)

Conclusion

It is therefore evident that social insurance has a very important role in the society, which is depicted in the roles it plays in the provision of benefits upon insurance coverage. The diversified programs of social insurance have allowed almost everyone in the society to get covered. Among the available programs include, disability programs, unemployment programs, retirement programs and income security. These programs have been found to benefit those who are already covered as they come to their rescue when need arises. (Benjamin 30)

References

Benjamin I. Dealing with Poverty and Inequality: University of Chicago Press, 2002 pp25-30.

Kathleen B. Social Insurance in a diverse America: Brookings Institution Press, 2004 pp56-62.

Social insurance programs have continuously provided income and health insurance for senior citizens. While social insurance programs may seem ineffective as they cannot have drastic differences in individuals’ lives and cannot provide luxurious lifestyles, they have a significant effect on resisting increases in poverty and inequality rates. According to Greenberg and Page (2018), social security was initially developed to serve as an addition to workplace pensions, even though a substantial number of retirees rely entirely on social security payments. Furthermore, while payroll taxes may seem unfair, the continuous flow of funding provides an outlook on a stable future with a low level of poverty in the country. On the other hand, Medicare’s initial goal was to provide health care to senior citizens who have no funds for treatment to eliminate the obstacles to affordable medicine and have impressive results. Therefore, while social insurance programs may seem ineffective, exploring their initial purpose shows that they effectively fulfill their functions with limited resources.

Social Insurance programs are closely connected with socioeconomic and political forces. For example, the first social security program in the form of pensions was offered to Civil war veterans, and the Great Depression caused a rise of questions on measures to increase economic security for the elderly. Socioeconomic and political forces can also affect social insurance programs as political and economic determine the longevity of social security programs. Social insurance involves the moral component of governmental administration and therefore depends on the government’s core values. The politics determine the working conditions, retirement age, and payroll tax rates in favor of prevailing economic conditions. Therefore, negative trends in the economy or governmental shifts that include changes in the administration’s core values can negatively influence social insurance programs.

References

Greenberg, E. S., & Page, B. I. (2018). The struggle for democracy, 2018 elections and updates edition (12^th ed.). Pearson Education.

Executive Summary

Job analysis is an important concept in the discipline of Human Resource Management since it is useful in the job selection process, especially in hiring candidates who apply for managerial job positions such as the assistant insurance salvage evaluation manager. Getting the right individuals for employment is critical to the achievement of an insurance organization’s goals. Different selection stages enable employers to foresee candidates who would be victorious and productive if employed.

Through the task-based approach, this job analysis aims at accessing the job description of an assistant salvages manager in an insurance company. Among the tested variables include time spent, difficulty to learn, centrality, and mistakes made. Besides, the treatise identifies stages involved in the job analysis process of the assistant insurance salvage evaluation manager who is expected to perform the role of assistant managers in the accident salvage department.

This position entails general management roles, auditing, and bookkeeping. Besides, the position demands flexibility since the occupant is expected to be an all rounder in the performance of general management duties.

Job Analysis

Validated personnel selection is crucial in forming an effective staff, directly promotes employee productivity, and in most cases, improves business performance and profitability. Finding and hiring qualified candidates is often a lengthy time- consuming process and should be implemented using the most current research practices.

The insurance business sector has used personality and psychological testing to predict job performance, job related behaviors, and reactions as guides to hiring and staffing their organizations (Invancevich & Konopaske, 2012).

A concern in cognitive testing through the task-based job analysis for an assistant salvages manager is that different persons perform differently in certain cognitive and IQ-based tests, suggesting a bias in these testing methods (Shetterly, 2008). For instance, in 1971 the United States Supreme Court decision, Griggs v. Duke Power resulted in showing that testing is a business necessity so that such tests are not biased nor are used to eliminate certain candidates.

Nevertheless, procedural justice is an issue that has occurred when conducting cognitive assessments (Shetterly, 2008). Also poor face validity leads to job evaluation candidate believing that the tests do not measure job-related skills or abilities.

However, these concerns do not detract from the usefulness that tests can provide to foresee personality, approaches, and psychological behavior to best determine an applicant’s fit with the existing personnel, especially for the sensitive and strategic assistant insurance salvage evaluation manager.

On the basis of relative time spent, this role scores a mean mark of 3, that is, average since it focuses on personality and psychological testing. The purpose of these tests is to predict performance, job related behaviors, and reactions. When approaching a potential candidate for any position, human resources representatives must remember the prospective candidate will display his or her best qualities of the abilities, skills, and knowledge he or she possesses.

What an organization does not see during the interview and hiring process is what a manager finds after the candidate obtains the position. As a human resource professional, one must seek as much information as possible to establish a long-term fit within the company (Invancevich & Konopaske, 2012).

Personality testing can give an insight into the individual besides his or her resume from preliminary interview, cognitive skills, and aptitude tests. Although there are concerns that some individuals can influence personality tests, the use of several screening tools increases the likelihood of obtaining an accurate picture of the candidate for the assistant insurance salvage evaluation manager position.

An insurance company can benefit from employing one of the testing tools listed in the overview of tools for selection or the tool recommended for personnel job analysis to ensure that the person assigned to this job is time conscious and deliver optimal returns within a specific period.

Self evaluation skills on the individual concentration level during training encompass actual and expected outcome. Through designing relevant program training model, concentration evaluation will remain active in developing dependence of interest attached to an activity, creating proactive relationships, and monitoring their interaction with physical aspects of team evaluation.

Eventually, this pays off since that individual will learn to appreciate the essence of learning and need to stay active. Thus, despite training coordination being rated as a high self management assessment strategy, action planning is of essence to create solution oriented task and strategy implementation secession for quantifying performance levels, especially in the pharmaceutical environment (Shetterly, 2008).

On the basis of the difficulty of the task, the score for this position is 3, since the role of a manager is often challenging and demands constant motivation. Motivation evaluation engages in active process of learning through the promotion, facilitation, and rewarding collective learning results, the ideal model for quantifying success will rely on the set objectives.

The three building blocks of motivation evaluation include learning intra personal performance, learning processes, and practice leadership that reinforces performance. These aspects are the success measurement variables of the success of the training and development strategy for an insurance company carrying out an objective job evaluation for an assistant salvage manager.

On the basis of mistake made, the analysis reveals a score of 1, that is, very easy to correct since salvage insurance business is dependent on what is observable. Thus, any mistake made by the assistant salvage evaluation manager can be easily corrected via reviewing his or her cognitive ability.

Reflectively, “cognitive ability tests typically use questions or problems to measure ability to learn quickly, logic, reasoning, reading comprehension and other enduring mental abilities that are fundamental to success in many different jobs” (Shetterly, 2008, p. 35).

To be able to carry out organizational psychology assessment on the basis of centrality, research and statistics are needed to understand the various behavioral patterns that exist within the scope of an organization for this role. Consequently, organizational psychology theorists overtly argue that cognition alters behavior. Moreover, it is important to note that the outcomes of organizational psychology vary hugely from one organization to the other.

Therefore, research and statistics will facilitate understanding of the centrality of the rules since according to this perspective; emotional distress is assumed to result from maladaptive thoughts expressed in specific behavior patterns. Through research, it is possible to stipulate the different behaviors often associated with different centrality role patterns.

This self guided approach is based on collaborative procedures that involve designing specific learning experiences to teach organization on how to monitor automatic behavior; recognize the relationship between these behaviors and cognition, ways to test the validity of the relationships, and measures to apply to substitute the distorted thoughts with more realistic cognitions (Invancevich & Konopaske, 2012).

The main aim of re-assignment analysis procedures is to ensure that the salvage administrator has high possibility working successfully. This kind of evaluation procedure is meant for reviewing a manager who possess analytical skills besides academic qualification.

Multiple re-assignment analysis is important because it ‘screen’ suitable candidates who would be productive to the organization’s objectives. Nevertheless, choosing right individuals for employment is always a challenge. Features that qualify an individual for the assistant salvage manager include thirst for success, risk evaluation, innovation and team player.

Appendix

References

Invancevich, J., & Konopaske, R. (2012). Human Resource Management. London: McGraw-Hill Education.

Shetterly, D. R. (2008). Job Characteristics of Officers and Agents: Result of a National Jobs Analysis. Public Personnel Management, 37 (2), 23-30.

The United States governance system is known as Federalism, which means that the national government and State governments share power in governing the country. The United States is composed of 52 States, which are partly autonomous and partly linked to the national government. Each State has got its own government which is composed of the judiciary, legislature and executive branches.

The national government, also known as the Federal government is headed by the President of the United States and is composed of the Congress (Senate and House of Representatives), the Executive and the Judiciary. All these three arms are independent of each other, meaning there is a clear separation of powers between them.

Each State has got its own constitution and a government, which is responsible for the running of the State. Due to variations in size, complexity and populations of various States, the States have other local governments which are charged with the responsibility of undertaking certain duties and responsibilities as well as providing various services to the citizens. A typical State has got five local governments namely the county, township, municipal, school district and special district governments.

The insurance industry in the United States is one of the industries in which both the State and Federal governments try to outwit each other in its control and regulation. The battle for the control of the insurance industry in United States is not a new one but stretches back to mid-1940s, when the Supreme Court made a controversial ruling that the industry was supposed to be regulated by the Federal government as stipulated by the commerce clause of the U.S constitution.

Before the ruling by the Supreme Court, the insurance industry was regulated by State governments. The call for the regulation of the industry by the Federal government was triggered by increased cases of insolvencies by insurance companies, which were believed to cost the customers a great deal in insurance costs.

After the Supreme Court’s ruling, the congress immediately embarked on a damage control exercise and responded by enacting the famous McCarran-Ferguson Act which barred the Federal government from interfering with any State laws for regulating the insurance industry.

In order to reinforce the McCarran-Ferguson Act of 1945, the National Association of Insurance Commissioners (NAIC) embarked on a mission to strengthen the State laws and regulations governing the insurance industry so as to make them friendlier to consumers and less prone to financial risks (Surhone 54).

However, the battle for supremacy in the control of the crucial industry seemed far much from over when the congress adopted the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, which requires that the Federal government, through the Federal Insurance Office and the Financial Stability Oversight Council should keep on monitoring all the State based insurance regulation systems with a view of identifying any missing links or any potential financial risks and making the necessary recommendations (Anand 29).

As of today therefore, the industry is partly controlled by State governments as well as the Federal government. The State regulation system is however arguably the most acceptable by many U.S insurance companies due to the uniqueness of all the States.

However, many citizens prefer the Federal regulation system because the State systems may sometimes be insensitive to the plight of the poor, thus making insurance, especially for healthcare beyond the reach of many poor people. But all said than done, the debate and struggle for the control of the insurance industry between the Federal and State governments ranges on.

Works Cited

Anand, Sanjay.Essentials of the Dodd-Frank Act; Volume 63 of Essentials Series.Haryana: John Wiley and Sons, 2011: 29. Print.

Surhone, Surhone. National Association of Insurance Commissioners. Delhi 110003: Betascript Publishing, 2011: 54. Print.