Page 36 - Insurance Times December 2019

2014 IRDA (Third Party Administrators - Health relative to the tools we have for dealing with VUCA-ness. It
Services) (Second Amendment) Regulations is an arms race - the world is becoming more complicated,
IRDA (Health Insurance) (First Amendment) and we need better tools to deal with the complications of
Regulations the world ("Strategy in a VUCA world," 2013).
2016 IRDAI (Third Party Administrators - Health
N. Bennett and J. Lemoine in their 2014 Harvard Business
Services) Regulations
Review article suggest that VUCA conflates four distinct
IRDAI (Health Insurance) Regulations
types of challenges that demand four distinct types of
Guidelines on Standardization in Health responses. They had proposed a guide to identifying,
Insurance getting ready for, and responding to events in each of the
2017 IRDAI (Protection of Policy Holders' Interests) four VUCA categories.
Regulations
2018 Modified Guidelines on Standards & Volatile
Benchmarks for Hospitals in the Provider The characteristics of a volatile situation is that the
Network challenge is unexpected or unstable and may be of
IRDA (Third Party Administrators - Health Services) unknown duration, but it's not necessarily hard to
Regulations was initially passed in 2001 understand and the knowledge about it is often available.
For example, price fluctuates in health insurance premium
The VUCA World after a natural disaster or an outbreak like Dengue. Or
unavailability of hospital beds for insured customer due to
The ways in which we conduct or think about our
collapse of a 1000 bedded hospital due to earthquake.
businesses have substantially changed within a decade. The
term VUCA - which stands for volatility, uncertainty,
complexity and ambiguity - is a common phrase these days What should you do?
in the corporate world. The rapid changes taking place in The approach followed for managing a volatile situation is
political, economic, social and technological fronts are to build in slack and devote resources to preparedness. The
making the organizational world increasingly VUCA (Sarkar, steps are typically expensive and the investment that you
2016). As per Bob Johansan the term VUCA world was first plan should match the risk at hand.
coined at the Army War College, the graduate school for
future generals; it's the elite training environment for the Uncertain
Army. In a VUCA world, if you're not confused, you're not The characteristic of an uncertain world is that despite a
paying attention. Both getting confused and frightened is
lack of other information, the event's basic cause and effect
part of the game too (Euchner, J., 2013).
are known. Change is possible but not given. For example
- a health insurer's pending product launch muddies the
The VUCA environment is not new. In fact, when the future of the business and market.
Mongols suddenly arrived at the gates of Europe in the
thirteenth century, it was VUCA, and the known world What should you do?
changed forever. VUCA is also seen as a relative term - it is
The approach suggested to handle the uncertain
environment is to invest in information. To collect, interpret,
and share the relevant information. This works best in
conjunction with structural changes, such as adding
information analysis networks, that can reduce on going
uncertainty.

Complex
The key characteristic of a complex world is that the
situation has many interconnected parts and variables.
Some information is available or can be predicted, but the
volume or nature of it can be overwhelming to process. For
example, an insurance company doing business in many

36 The Insurance Times, December 2019