Page 6 - Life Insurance Today January-June 2020

increased intelligence and vigilance, particularly in the light times and environment. So do our perceptions about the
of several corporate failures witnessed in the past. It is a risks. There is no magic wand to ward them off. It appears,
repeatedly proven fact, that no amount of oversight can errors in our developmental efforts, driven by highly
guarantee what a culture and conduct of self discipline and materialistic interests, have lead to geometric aggravation
selfregulation can offer. The repeated failures across the of risks. We are all familiar with the climate change induced
sectors, as well as across the countries has created a greater heightened frequency of storms, floods, tsunamis, increased
thirst, for sound and reliable as well as intelligible frequency and magnitude of seismic activity, currently
knowledge, amongst members of the society. raging covid-19 pandemic and menacingly spreading
terrorist activities, all of them testimonise the said risk
Understanding the environment around us, reacting / aggravations. Human curiosity in exploring the universe too
responding to its dynamics and proactively initiating changes is fraught with huge unknown risks. Risks and rewards go
to adapt it to suit our self interest, are unique attributes of together is a simple fact with no exaggeration. If we wish
all living beings. For understanding a subject / phenomena, to progress we have to take calculated risks and manage
there is no method better than the method of comparative them. Therefore insurance, a risk management tool, in all
study. Amongst all methods of acquiring and enhancing its forms, plays a crucial role and occupies an important
knowledge and understanding, comparative method is the position in the economic activities of today's society
king. Contribution of comparative method to the human irrespective of the nature of its socio-political structure.
wisdom has been huge and immeasurable. For study of
certain dimensions this may be the only method. And in Hence understanding correctly, the different dimensions of
others it is used to confirm or contradict the knowledge and the role of insurance in socio-economic life, is a matter of
understanding gained by other methods. interest to all planners, administrators, academicians and
leaders across the society. As said above, the common man
This method is inherent in all spectrums of human life – too is very much interested in such understanding, as today,
social, political, economic, cultural and scientific. All of us he is not immune to adverse effects of such socio economic
are aware of it and are naturally conditioned to employ this set-ups. It seems, there is a need for upgrading the current
method in our day to day life, consciously or unconsciously. practices which facilitate the knowledge and understanding
The purpose of this write up is to examine different facets of working and efficiency of insurance sector. I think current
and dimensions of this comparative method in gaining practices in this regard, evolved over the years, can be
knowledge and understanding of matters relating to improved to a great extent in the following four areas.
insurance, particularly non-life insurance. While doing so, 1. Measurements in Nominal vs Real Terms,
the write up looks at a few past and present practices and 2. Inevitable Comparison of Apples with Oranges,
their efficacy. In addition, it attempts to flag the deficiencies
3. Use and Misuse of Aggregation, and
in such practices for exploring future modifications /
improvements. 4. Acceptable Standards / Benchmarks of Right Kind.

In our industrialised, technology driven society, though life
has become more comfortable, it has not become riskfree
and is not totally devoid of life crippling risks. On the other
hand over the years, it has grown riskier than what it was,
a few hundred years ago. Though earlier day's life was
characterised / marked by subsistence economy, yet it was
sustainable and otherwise was no less rich and less profound
than the one of today’s advanced and developed societies.
Risks were and are inherent and integral to living and they
will continue to be so.

They might see / reflect drastic mutations with changing

Life is so short. I would rather sing one song than interpret the thousand.

6 January - June 2020 Life Insurance Today