Page 9 - Life Insurance Today January-June 2020

questions kept on popping up regularly. Is it, as good as that
of bankers ? How does it compare with that of a
manufacturing industry ? Where do we stand in comparison
with other services and particularly with other financial
services ? Satisfying answers to quench the curiosity were
not simply available, though some rough measures could
have been used to facilitate some judgment of approximate
kind. But definitely beyond the capability of an average
man. Moreover a few drops of water given to a highly
thirsty creature instead of quenching the thirst, is more likely
to increase the emotional and psychological gravity of the
thirst.

No two human beings are exactly alike, nor are two
organisations. That is not an excuse for avoiding peer
comparison of economic activities of such entities, because
all of them use same economic inputs and society is entitled
to know, where these inputs are used best. This argument
definitely holds good for organisations operating in a
particular sector. Can this argument be used, with equal
force, to compare organisations engaged in dissimilar
on such factors should necessarily form part of the economic activities ? Will such comparison not yield absurd
reportage. Even if some of them are available today, they results ? Comparison of an insurance entity, with a
are not presented in a manner and format in which they manufacturing entity, or other service organisation like a
should be. The format and manner of their presentation telecom company can only land us in a realm of confusion.
should be such that it facilitates easy and intelligible
reading. Such a step will also take the operational Even comparison with another service organisation in the
transparency to the next level. In India life insurers use sum financial field like a bank or a mutual fund too would take
insured as one of the service parameters and general us no-where. This is equally true of the comparison involving
insurers have not been using it to the same extent, despite two insurers, one a life insurer and another a non life insurer.
being making lot of noises about the gap in insured and In all such cases we are attempting to compare oranges
uninsured values (Under insurance). with apples. In other words we are comparing the
incomparables. While acknowledging the absurdities which
Similarly one of the leading banker predominantly discloses may crop-up in such primary comparisons, we can not
the number of customers served. Yes there are practical ignore the need for and utility of such comparison for the
problems in operationalising some such disclosures, but they purpose of assessing efficiency in use of scarce economic
are not insurmountable. Economists, long back, recognised inputs. Therefore it is necessary to develop tools and
the weaknesses of depending merely on nominal values and mechanisms for meaningful inter-sectoral comparison.
for better comprehension, they started presenting the GDP
of a country at current prices as well as constant prices with Only, these tools and mechanisms of comparison may have
reference to a base year. We need to explore the possibility to be slightly different from the ones used for intra-sectoral
of such a measure for reporting insurance values. comparison. It is possible to evolve such tools of higher level
/ grade to facilitate the comparison of dissimilar
Inevitable Comparison of Apples with organisations / organisation which are significantly different
Oranges / engaged in significantly different activities. All
organisations use the same inputs (Land, labour, capital and
Being part of Indian insurance industry, I was always curious
entrepreneurship). The difference is only in the proportion
to know the value of its contribution to our society. Following
of these inputs. The proportion of land / material will be
Some people never go crazy. What truly horrible lives they must lead.

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