Is Insurance a Necessary Evil?

I have been experiencing an insatiable thirst to seek to answer this nagging question about whether insurance is a necessity in our country today. While the subject of insurance is broad and multi-faceted, I will seek to break down the perception of this subject so that our minds for a moment are not engrossed with the surreptitious picture of insurance agents’ incessantly cold-calling potential clients or pursuit of claims arising out of insurable risks by claimants.

Data from the Insurance Regulatory Authority (IRA) shows that the level of uptake of insurance in Kenya is at an all-time low of 3.3 percent. This cannot be compared to developed economies like South Africa where the numbers are at 14%. Many explanations have been advanced to show why Kenyans are still averse to taking up Insurance related products. One prominent argument is that the Per capita income (GDP) of the average income earner cannot be enough to support payment of premiums. The other school of thought is that the savings culture of Kenyans is still wanting.

While the arguments above may hold water, the fundamental understanding of insurance has not been taught to most of us from an early age. The subject of insurance I dare say is still shrouded with a lot of secrecy and misunderstanding akin to the mysticism surrounding ancient religions. The language used is still rather technical to the average person. I realize that at this point I must correct myself quickly and note that every profession has its language; for an engineer has to use engineering language, an architect the same etcetera. Insurance also has its language but if its proponents profess that it benefits almost all of humanity, shouldn’t it be clothed in language that is not so grandiose but easily palatable to the common man?

The responsibility of the stakeholders in the insurance industry is to bring customers’ perception to how insurance works in a language they can understand. This would entail offering a basic insight on what informs the underwriting decisions on various insurance products by insurers. I want to suggest that it would benefit insurers to have open days where they invite people and educate them on the fundamentals of insurance, on the meaning of risk, why insurance is important to any economy and most importantly the benefits of insurance at a personal level. Apart from honing their sales skills, sales professionals need to align themselves properly with the market in order to understand and respond well to their customers’ needs. More often than not, sales people are perceived to be aggressive, over-achieving individuals who are not honest and are quick to point to clients the dotted lines in the application document. This negative perception must stop. Insurance sales people contribute immensely to the overall economic growth and offer important services without which an economy could not function well.

Now back to our overarching theme. Any society is fraught with risks. The risk of death by accidents, accidental injury leading to permanent or temporary disability, the risk of fire arising out of man-made or natural sources e.g. lightning, subterranean fire etc, the risk of accidental injury at the place of work owing to the nature of employment, loss of luggage while travelling and many more. What insurance does is simply to classify the above mentioned risks and price them into premiums. The premiums are then pooled and it is from this pool of funds that claims are settled. The guiding principle here is that a risk should be quantifiable. A close analysis of your immediate environment will reveal many known and unknown risks. Insurance companies manage losses that arise out of insured risks. Think for a moment the costs borne by the insured if there was no insurance to mitigate these risks. Imagine a petrol station owner being held liable for damage by fire arising from his petrol station to his neighbors. If the owner does not have public liability insurance, he may find it difficult to raise money to meet his legal fees and hence may not protect his business. This is because the cost of a claim can far exceed what a business is able to raise and necessitate the shutting down of a business altogether. Many examples abound where insurance solve practical problems and mitigate a host of risks that can cripple businesses and slow economic growth. At a personal level, medical insurance is very vital. Think for a moment the rising cost of Medicare and consultancy fees not to mention the increasing costs of pharmaceutical medicines.

But there is an antithesis to such a healthy explanation and this is advanced by some who argue that risks are only imagined hazards. They posit that a risk is imagined and only ceases to be a risk when an actual occurrence happens. Some even counter a proposal to take up insurance dangerously by arguing that they have, for example, not been admitted to hospital for a number of years and see no need to take up a medical cover. While it is important to live healthy and avoid the hospital and its attendant costs, it would be farcical for one to wish they had a medical cover in the face of a medical emergency.

In conclusion, insurance is necessary to any growing economy like Kenya in spite of the low uptake. It not only creates employment and puts in abeyance the worry of meeting risks; it is an indicator of economic growth and a sign of a thriving economy. More needs to be done to educate the masses with regard to this subject. The responsibility lies squarely at the court of the regulator to put pressure on insurance companies to increase the uptake of insurance in the country. Incentives must be given to companies that have the highest level of penetration to make sure they maintain their influence and widen the market. Is insurance necessary? Indeed it is. Next time someone dissuades you from taking up an insurance plan, think again.

Change Management – Important Questions

Our Egyptian culture by nature is anti-change, not to mention man’s general fear of change. You can get the image on how important change management is. Do not get me wrong, change when necessary is a must; but a necessity should not distract your management from the correct course of action to implement and manage the change in your business.

Here are 8 Questions you need to answer to implement a successful change management:

1. Q 1: What is wrong with the status quo?

To be on the right page here, you need to understand that change in itself is not the reason behind it. In other words, you “Change” because there is a problem with the current status. Therefore, the first step is to identify your problem. After all, when it comes to management you do not want to subject your business (both as its manager and its owner) to unnecessary inconvenience, unless you are sure that change is the only way to achieve your objectives.

2. Q 2: Do others agree with you?

As a manager, answering the previous question will help you by directing your team toward change. As we previously mentioned Egyptians by nature are against change; so in the most likelihood they do not see the reasons why your management is pro-change; and accordingly, there is no need for change. Therefore, management requires that you validate your managerial decision using examples and statistics. management needs you to evaluate the perception of your employees of your vision. After all you, no change can take place, unless people feel the need to change.

3. Q 3: Have you selected people from all levels to implement this change?

To obtain the best results, you need to involve people from different levels to implement change. You may have the authority to initiate the change process as a manager or a business owner. However, you need the insight of professionals and specialized employees in order to succeed. Not only involving people from different levels will provide you with insights about the feasibility of your plan; they will also help you transfer your vision to lower managerial levels in your organization assuring that all your staff is on board for the project.

4. Q 4: Do you have a plan to remedy the situation?

It in the culture of management that employees are always looking up to the “Boss” and taking his lead, specially that at the current time Egyptian employees are not familiar with styles of management where they are required to take the initiative. So as a manager you need to come up with an action plan. While crafting this plan make sure it is flexible enough to adapt easily to unforeseen issues.

5. Q 5: Are others on board?

The following step after you have got everything you need to implement your plan set and ready is to put on your manager thinking cap and dedicate a team or department meeting to explain the problem and the need for change. As your crew’s manager you need to make sure that all your team is on the same page as you by assuring that everyone knows what he is doing, why, and to what end.

6. Q 6: Have you identified obstacles and sources of resistance?

Organizing and planning your change implementation, does not mean that you are not going to meet any setbacks. Therefore, a backup plan is an essential component for any change management. Especially, because Egyptians have the tendency to avoid being honest with higher managerial levels due to their belief that it is not good to disagree with the manager. So it is very likely that you will meet some resistance from certain members from your team, and your change management needs to be ready to deal with those members.

7. Q 7: Do you have demonstrable backing to support your change?

You do not want doubting and skeptical members inside your team. Most certainly, you will collide with employees who doubt your vision and the accuracy of your decisions. Being a manager does not protect you from these doubts, so be ready to demonstrate the validity and certainty of your actions.

8. Q 8: Do you have a time frame, a budget, the people necessary to help you and other resources?

Now, it is time to get your Management checklist, the past 7 questions measure your ability to manage change, but you need to check other non-managerial elements. You need to know if your management has the time fame, the budget, and the human resources to help you through your change implementation.

Home Staging Priorities for a Lived in Home

You have decided to put your house on the market and you have seen home staging shows on TV (or, at least, heard the term).

The result always looks fantastic on TV, but how will it look in YOUR house? After all, you have to work with what you already have and your budget is limited, right? So, what to do and where to start – that is the question!

The first thing you need to realize is that you probably don’t see your own home objectively, such as a potential buyer would. You are emotionally attached to your home. And you don’t notice small imperfections, cracks, missing light bulbs and such anymore in your busy life. But the buyer will!

That is why the role of a professional home stager is important. He/she will play the potential buyer’s role and will tell you what’s bothering him/her. Together, you will make a list and prioritize as well as estimate a budget for this project.

Some very key points are:

Declutter (and declutter some more). The buyers want SPACE for their money, so show them how spacious your house is. Even small rooms can look bigger by leaving only few pieces of furniture in them. The decluttering applies to closets and cupboards as well. Throw away, give away or pack away – you will have less things to do at the moving time!
Find storage for the extra stuff you want to keep – family, friends, storage facilities or moving companies, if possible avoid using your basement or garage
Some new paint can make all the difference in the look of your house. Choose neutral colors, you can’t go wrong!
Update and add lighting to all the rooms of house.
Keep it clean at all times. I know – it is not easy when you live in the house, but do your best – make the beds, wash the dishes, keep a few bins around to throw stuff in quickly when needed…
A home stager knows how to showcase your house by optimizing the furniture and accessories placement and making it look its best. It is worth it!
There you have it. A bit of effort and a small investment will pay off at the sale time. Good luck home staging and selling your house quickly and for top dollar!