How does cooperative insurance support production?
According to the report of the financial news, quoting the message of economy, the fact is that insurance companies are one of the most influential institutions in improving the economic infrastructure and business environment in the country, which can reduce the effects of investment threatening factors by creating mechanisms to protect investments against various risks. reduce and ultimately help increase financial stability in the country.
It should be noted that currently the inflationary conditions have put a heavy pressure on economic enterprises and manufacturing companies of the country, especially the companies that are in the first line of sanctions.
On the other hand, the inflation in the country has greatly increased the property value of industrial and production units, so that the purchase of insurance policies and the provision of complete coverage with updated values for many of these units have brought significant insurance premiums. In such a situation, most of these insurers either give up buying insurance policies completely or prefer to get only basic coverage due to high prices. Therefore, in the current conditions, it is only possible to support economic operators through the design of appropriate insurance products and coverage of existing risks.
Supporting production units using “credit insurance”
Not long ago, in this regard, the director general of Central Insurance stated that credit insurance is the savior of production units and said: By providing credit insurance, the risk of non-collection or delay in collection of claims is reduced.
He added: Institutions and companies sell goods and services in installments, although they take collateral from customers, but they still face the risk of non-receipt of their claims or damage caused by the delay in their collection, for this reason, central insurance to compensate This damage has created credit insurance to cover these risks.
This insurance activist pointed out: In fact, by providing credit insurance, Central Insurance reduces the risk of non-collection or delay in collection of claims, and in this way, it has put the support of production units on its agenda.
Regarding the support of production and business activities in the country, he said: In the field of helping the country’s production and in line with the slogan of the year, “Production, Support and Removal of Obstacles”, good programs have been created with new products in the central insurance industry, which we hope will be fruitful. be
The General Director of Central Insurance stated: One of these new products is credit insurance, in other words, it is important for producers to be able to collect their claims by selling their goods and services, and if for any reason the buyers are unable to pay. If the claims are not collected, the insurance companies will pay these claims in the form of credit insurance.
He stated that the payment of these demands of the producers and its credit insurance is in a group form, he stated that: the credit insurance policy is issued for a specific credit issue or installment sale and in a group form, because of that the policy holder cannot be selective only for some Creditors or customers to issue insurance policies.
The General Director of Central Insurance continued: Also, for all the contracting companies with projects that need to fulfill commitments or guarantees to start a plan or project, just like banks, where there is a bank guarantee according to the usual procedure, guarantee institutions for insurance guarantees will be established, which is like a bank guarantee. It is acceptable.
This insurance activist stated that, like bank guarantees, this insurance guarantee is also effective, and clarified: Just as companies ask employers for a bank guarantee to do their work well, from now on, an insurance guarantee can be used.
He stated: Insurance guarantee is as valuable as bank guarantees and is binding and acceptable according to the law.
Risk transfer solution to customers
However, in this connection Payam Ekhtaz Online conducted a conversation with Maryam Salmasi, the risk and organizational excellence manager of Cooperative Insurance, which is as follows:
How can insurance products serve production and eliminate production risks?
The answer to this question is simple, but it requires reviewing some concepts to find a common view. Risk is the impact of uncertainty on achieving goals. Of course, based on this definition, we call any impact that a change in possible conditions results in increasing or decreasing the utility as a risk, but usually all people and organizations are concerned about its negative effects, and that is why risk is generally measured by its adverse effects. . Every person or business faces many or even countless risks every day. For example, imagine that every person faces the risk of contracting various diseases, car accidents, the occurrence of various accidents, the risk of losing property, the risk of not making a profit from investments for various reasons. Or let’s review in our mind that a clothing manufacturing factory faces various risks such as the possibility of fire, accident for employees, failure of devices, failure to sell products and the risk of losing key employees and many other things.
Due to the existence of these risks, we must note that there are conditions that may increase or decrease the probability of occurrence of each risk by influencing the source of the risk. For example, imagine that flammable materials are kept in a warehouse, this will definitely increase the probability associated with the risk of fire. On the other hand, there are also ways that reduce the severity of the development of damage after it occurs. For example, in the event of a fire, if the property is equipped with a fire alarm system, the spread of the fire will be limited and the damage will be less. Following the explanation that was presented, I must say that there are different ways to face risks. Such as reducing the probability of occurrence, reducing the severity of damage development, preventing it in general in order to avoid that risk, transferring the risk, sharing the risk or even doing nothing and accepting the risk so to speak. Do or keep it.
The concept of risk transfer is that the institution, which is usually a financial institution, agrees to accept the damages caused by the possible occurrence of the risk instead of the risk owner in exchange for receiving an amount that can be an advance payment or a part of the profit. compensate This method is implemented by insurance companies. Of course, insurance companies are not the only institutions that provide risk transfer services, but they are the most common. So one of the ways of risk management and not the only way is to transfer it to insurance companies. In fact, insurance companies offer risk transfer solutions to their customers. The insurance company agrees to compensate the damage caused by the occurrence of the risk covered by the insurance policy in exchange for receiving an amount called insurance premium.
Now let’s know how the business of an insurance company, which is part of the ecosystem of the insurance industry, including the supervisory body, sales network, damage assessors, insurtechs in interaction with hospitals, police, etc., works. First, let’s note that commercial insurance companies, such as cooperative insurance, as a for-profit organization, have shareholders who founded the insurance company in the hope of making a profit. For example, if the insurance company wants to insure the risk of car accidents in the form of body insurance, it must be aware of the probability of accident damage of all types of cars and the amount of possible damage caused by accidents, and based on them, decide what amount to pay from to be received by the insured. The amount of insurance premiums are small compared to the possible loss that the insurance company will pay if it occurs, but the insurance company offers risk acceptance services to a large number of policyholders with similar risk, which based on the calculations it has made, the probability The occurrence of an accident for all of them at the same time is very rare. Therefore, in order to respond to the needs of its customers, the insurance company compensates the possible damages for some of its customers from the accumulated amounts of insurance premiums and also makes investments from these aggregated amounts to meet the demands of its shareholders in order to generate profit for them. to do
Insurance inherently helps the production cycle
With this introduction, the answer to your question is that the insurance industry, as an ecosystem in which insurance companies are a part, inherently contributes to the production cycle. Because it transfers part of the risks in the production process to itself and if it happens, it compensates it financially for the insured or the insured. This operation gives confidence to the investors and managers of the production processes so that they do not avoid investment and production operations and do this by accepting a more reasonable level of risks. This naturally has a positive effect on the economic cycle.
It is very important that every insurance policy is a contract that the two insurers, i.e. the insurance company and the insured or the customer, have agreed on. Based on what I said about the business of the insurance company, according to the statistical calculations, the insurance premium is limited to specific risks or risks that are clearly mentioned in the contract. Therefore, it should not be assumed that whatever happens to the insured is covered by the insurance. For example, if the car body insurance is issued for the risk of car theft, it does not compensate for the damage caused by the storm.
An insurance company is a for-profit entity, not a social one
Why do some believe that insurances were not successful in this field?
By nature and based on the business model of insurance companies, insurance cannot be unsuccessful. Because in any case, the risk has been transferred from the risk owner to the insurance company, and in case of damage, the damage has been paid by the insurer according to the terms of the contract. Perhaps the conflict of my answer with the direction in your question is due to the ambiguity in the root cause of this supposed failure.
Perhaps the reason for asking this question is that some people have not had positive experiences in the process of assessing and paying for their damages and have a negative perception of insurance. Dissatisfaction occurs when the perception of the product or service is not the same as the expectations. In my opinion, a large part of the reasons for the dissatisfaction of those people who are unhappy with the insurance process can be attributed to expectations and not to the insurance services provided in the field of damage. I mentioned that insurance is a contract and its conditions are clear, many people do not pay attention to the provisions of the contract and expect the insurance company to compensate for the damage that is excluded in the text of the contract or special conditions are included for its payment. But there is no doubt that part of the dissatisfaction can be caused by the unfavorable services of insurance companies. In any case, one should comment on it with accurate evaluations and not with speculation.
A major factor that exists, and I don’t know if the group you’re referring to has also gained a belief from this information, is that many risks are insurable from the perspective of insurance companies. are not and are not covered. For example, due to the fact that the occurrence of some risks, including natural disasters, involves a large part of the society at the same time, insurance companies are not interested in accepting their risk, which is known as general risk. For example, nearly 70% of damages caused by natural disasters that occurred in the world from 1980 to today were not covered by insurance. I remind you that the insurance company is a profit-making entity, not a social one. Therefore, governments usually enter to cover some and of course partial catastrophic risks.
I hope we deserve the trust of our customers
Is the main problem in this regard legal weakness or are the necessary resources not available?
In any case, there is always room for improvement in the laws and regulations as well as the performance of insurance companies in the implementation of their work processes, not only in our country but all over the world. For example, regarding the cases that I have mentioned, the improvement of the processes of assessment and payment of damages in insurance companies and its compliance with the demands of all stakeholders, including customers and shareholders, or research on other risks that can be covered, can be done by Sanat Bin’a. be loose But for the exact answer to this question, it depends on your previous question. Since we don’t know what exactly is the cause of the failed harvest, I can’t give a precise comment. In management science, it is said that what cannot be measured cannot be managed. Therefore, until we know the exact extent and cause of dissatisfaction in the whole society, we cannot offer a solution.
What is Cooperative Insurance’s opinion in this regard and what measures has it taken?
At Cooperative Insurance, as an insurance company, we do our best to accept the risks that are usually taken by insurance companies in the form of various insurances such as fire, liability, engineering, life, car, ship, plane, transportation. and there are transportation, energy, treatment, accidents, etc., to identify the capacities of defining new insurances to cover risks that have not been given enough attention before. On behalf of the strategy, we pursue innovation in products and services in order to identify the unanswered needs of actual customers and design and supply products and services for them. In this regard, I can mention the business interruption insurance, family medical insurance, small and medium business medical insurance, as well as the special conditions included in the life insurance of Cooperative Insurance.
On the other hand, in order for our decisions to be based on reality, the level of customer satisfaction is continuously measured in the company. One of its achievements, which we decided to focus on based on the results of a survey of customers and the handling of their complaints in previous years, is the speed of compensation strategy, which is designed and implemented to gain the trust of customers and also create a positive experience. All in all, I hope we deserve the trust of our customers.
Conclusion
According to the information contained in this report, it can be concluded that, firstly, there is a lack of information in the field of insurance support for production. That is, producers do not have much useful information in this field. Second, special economic conditions have caused businesses to And different production units do not have the necessary resources for insurance coverage, and in fact, in this situation, their priority is to solve other financial issues. Businesses and production units are especially at the peak of Corona.