Page 11 - Life Insurance Today January-June 2020

the positive ones getting highlighted and the negative ones
getting downplayed. All this is very fine to get some idea
about the performance of the organisation.

Those few in the relevant field who are familiar (being
reasonably literate in the relevant activities) do make some
sense (if not complete) out of such reportage. But for others
and the common man who may not be so literate, these
reporting mean nothing. They do not make much sense. It
is said and literally true that you can take the horse to the
water but you cannot make it drink. Though making sense
out of reading, requires a real thirst in the reader, yet
otherwise also it is possible to make reporting more
meaningful to every one.

Reporting the performance by comparing it with some
benchmarks is one such way. The best example in this regard
is the reportage on rainfall. In addition to the annual
variation, it is always compared with the longterm average.
In view of this, readers understanding becomes more
meaningful than its mere comparison either with previous
period or with that of peer/s. The period comparisons have
a limited purpose of flagging the performance of some
specific period. Peer comparison is effective only in an planning does involve setting targets and these targets do
intensely / fiercely competitive market. act as benchmarks. But they are mostly for internal
consumption. Unrealistic approach towards target setting
On the other hand comparison with the benchmark / and wide off the mark performance, frequently observed,
standard has a much broader and general purpose. Equally is a reflection of scant regard shown for such standards.
enlightening / illuminating example in this regard is the Benchmarks / standards are always dynamic varying from
practice of checking the BP or sugar level against the more time to time and place to place. To a great extent they
scientifically set benchmarks. Therefore developing emerge from the past performance achieved somewhere.
standards and bench marks and presenting the
performance against those standards or benchmarks can Technological developments do set the ground for new
add substantially to the reporting quality. standards. Short term, medium term and long term
standards may be different. But there has to be consistency
Currently this exercise of setting benchmarks exists in a amongst them. Whether the growth has to be in double
limited way in organisational target setting exercise. In digits or single digit, depends on the stage of development
addition, some kind of bench marks set by the regulator, it has already achieved. Expecting double digit growth in a
are found with regard to 1. Expense ratio, and 2. Solvency. well developed market is not rational. Similarly low growth
There are also some benchmarks in the citizens charter rate is a crime in an underdeveloped market. Initially
commitments / regulatory prescriptions (Service standards expecting high growth in a startup is not rational, but an
for policy issuance, claim settlement, grievance redressals). adolescent startup can grow in leaps and bounds.
It is necessary to raise this exercise to the next level.
Objectivity of all these benchmarks have to be regularly Mature adult organisation may not have the kind of growth
reviewed and reaffirmed. In the past it has been observed displayed by a start-up. But it has the muscles to withstand
that only crises drive the changes or improvements. all vicissitudes to deliver sustained growth. Standards of
margins depend on the client base. High margins are not
Mostly reactive and rarely proactive. Organistaional ethical in an organisation serving a poor clientele.

Rise above the storm and you will find the sunshine.

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