Insurance investment is a rather heated debate especially given the fact that insurance, at its core, covers risks traversing a vast range of fields and application. Investing in insurance and more specifically; when considering life insurance requires diversification of the investment field. However, in some regions and to some investment agents’, investment in one field that seems to be performing better in terms of returns becomes the most preferred option. This does not come without its challenges and inherent risks.
Leadership and administration is another important aspect that is so often neglected by many; yet its importance cannot be overemphasized. Leadership in insurance not only offer direction that the insurance agency will take in ensuring that there is sustainable business inflow, but also that the agency representatives are motivated and their voices heard.
This therefore demands a complex mix of leadership personality that can bridge character disparity within the organization. In some cases, there is need to assert authority in a wise way to avert misunderstanding and to ensure respect for all staff members regardless of the financial input of an individual. In this case study, there is analysis of the Karen Leary (A) case that involves various aspects of an insurance industry.
In this case study, it is emergent that Chung had one account to invest in (Hill and Elias 2010). Hill and Elias continue to show that Chung’s investment framework was more inclined towards a specific line that Chung alone deemed fit to invest in since it was perceivable in his own way, to have high returns. However, it is also good to point out that there were other skimpy investment arenas that Chung perceived to be admirable, but in terms of risk investment, the largest share of investments were set in that line (Hill and Elias 2010).
The challenge with such a decision according to Scordis (2011) and Haron, Ismail and Razak (2011) is the fact that, in the event of a downfall in such investment decision, not only will the customers lose their investment money and the returns, but also the insurance agency will lose customer confidence. This means that the agency will be at a disadvantage in regaining customer confidence and may see other customers pulling out of their portfolio or de-faulting their premium payments to invest in other fields (Nurnberg and Lackey 2010). This is where that old adage that posits “Do not put all eggs in one basket” would be most applicable as an advice (Anonymous).
Insurance for All
It is inherently clear that much of insurance investment and the standards sets have a higher proclivity towards the high-class category of income earners (Nurnberg and Lackey 2010). However, in the case of Leary, there was an effort to bring “Wall Street to Main Street” (Hill and Elias 2010, p. 1). This means making an effort to have an inclusive framework that would cover as many individuals as possible. On ethical grounds, this is admissibly a vital element since most individuals in the category of low income earners would be able to afford insurance covers that would enable them to invest wisely and have their investment efforts covered.
Agency Support Framework and Leadership
Leadership is a vital pillar in the progress and ultimate sustainability of any organization. This is without a doubt the most important pillar since it offers direction to staff members. In this case study, it is emergent that the company has established a vast mesh network as a supportive framework for its brokers including training in addition to topnotch research work (Hill and Elias 2010).
According to Cheng and Seeger (2012), a competitive insurance agency consistently invests in education of its brokers in addition to edification of the products and services through investment in research and development. The fact that this company invests in research shows positive prospects in establishing competitive products in the marketplace and gaining more customer confidence since different products keep being rolled out in the market from time to time. This offers divergent clientage categories variety they can chose from and what is suitable as per their needs.
It is good to point out that, despite small beginnings; it is admissible enough to point out that the efforts put in, and the client connections and referrals is what makes a difference. For example, it is noted in the case study that most brokers had small beginnings with Leary being one of them, but later on, after persistence in pursuing their dreams, they will eventually get the connections and establishment. However, it is important to point out that Chung made fast connections as an enticement approach to woo Taiwanese clientage.
However, it is emergent in his demands that this might have been a mistake since Chung expects that the management offers special treatment given the voluminous business the individual brought to the company. Haron, Ismail and Razak (2011) warn of the challenges and unethical behavior emergent from such approaches, a loophole that Chung seems to vehemently exploit given the fact that there was no other Taiwanese broker in the company and that the company was desperate to capture Taiwan clientage (Hill and Elias 2010).
In as much Leary made great strides to “build a winning team” (Hill and Elias 2010, p. 3), it is vital to note that this dream was not as successful as it should have been given the fact that from inception, there was favoritism towards Chung since Chung was given connections too early. It is not quite clear as to why Chung’s anti-social character was more pronounced but it is clear that this character was more of a hindrance to a cohesive working environment. Is it possible that Chung’s negative attitude was accentuated by the rigorous almost humiliating recruitment process highlighted?
Conventionally, it is noted that the interview process involved three sets of interviews, but in the case of Chung, they were eight, which can be perceived as humiliating. Was Leary’s skepticism on Chung a contributing factor? Haron, Ismail and Razak (2011) are very assertive of the recruitment approach and the modality of treatment of individual employees and the attitude thus adopted.
Haron, Ismail and Razak (2011) while citing the theory of planned behavior note that individuals may initiate a behavior to counter the way they are treated within an institution or organization. This can thus become a major challenge to curtail especially if the initiating or related party to the inception of the behavior continues to play the central role in curtailing the said behavior (Haron, Ismail and Razak 2011).
Product Development Motivation
This is a question that can only be answered by taking a peek at the financial information through ratio variations over time that will detail the amount of investments customers have made in the company and the returns the company and customers have made. More specifically, the disparity in earnings for both customers and the company will be detailed by conducting correlative matrices and performing other econometric comparisons of the company with special emphasis in times when there was product-oriented production and current customer-oriented production. However, this is an analysis for another day.
When Leary came into the limelight of the company, the company’s performance was average, just existing past the bare margin point (Hill and Elias 2010). This means that there was urgent need for major realignment of the company to start acquiring greater share of the market cake and true to these demands, Leary made it possible. Well, this did not come without some people being fired.
However, the beauty of the approach adopted is that although individuals were fired, they were never left in the dark to have their brokerage careers to shatter but rather they were connected with other insurance brokers, good sign that the company did indeed value their employees and their endeavors (Hill and Elias 2010). That is a very unlikely move, to connect individuals to a rival company but it did happen, quite an ethically accepted behavior so would Haron, Ismail and Razak (2011), Nurnberg and Lackey (2010), and Cheng and Seeger (2012).
Risks and Risk Taking
It seems that there is a great divide in as much as risk handling is concerned. From Leary’s point of view, avoidance of high-risk investment arenas is important even though the investment might be enticing enough (Hill and Elias 2010). On the other hand, Chung seems to be pulling the other edge of the risk string with higher proclivity towards investment on high-risk arena and low on relatively secure investments (Hill and Elias 2010). This divide is weary to the company’s profile and operation an aspect underlined in the works of Scordis (2011).
In terms of professionalism in the operation, there seems to be lapse as seen in the way in which Leary keeps eavesdropping on what employees are doing in the name of motivating and keeping up-to-date with the proceedings of the company (Hill and Elias 2010). It is also important to also note that there was a lot of grumbling from the employees who kept complaining of the strictness that Leary was portraying to them (Hill and Elias 2010). Failure to address employee grievances is a major drawback to the company since employees either do the bare minimal or they start seeking other arenas where their voices will be heard and this includes decision to hop between companies (Haron, Ismail and Razak 2011; Cheng and Seeger 2012).
It is also good to point out that there was another lapse of professionalism in that there was a challenge in the way meetings were held. For example, when Leary is making a review of Chung’s performance, it is clear that the meeting was not held in a formal setting but on the converse.
In conclusion, it is emergent that the company has many emergent issues that make running of the company to be problematic. These issues raise the temperature on various levels and the level of professionalism is wanting in this company. The company exposes investment funds to risks and their over-reliance on Chung to woo Taiwan clientage is unwarranted.
Cheng, S.S. & Seeger, M.W. 2012, "Lessons Learned from Organizational Crisis: Business Ethics and Corporate Communication", International Journal of Business and Management, vol. 7, no. 12, pp. 74-86.
Haron, H., Ismail, I. & Razak S.H.A.R. 2011, "Factors Influencing Unethical Behavior Of Insurance Agents", International Journal of Business and Social Science, vol. 2, no. 1, pp. n/a.
Hill, L.A., & Elias, J. 2010, “Karen Leary (A)”, Harvard Business School, pp. 1-9.
Nurnberg, H. & Lackey, D.P. 2010, "The Ethics of Life Insurance Settlements: Investing in the Lives of Unrelated Individuals", Journal of Business Ethics, vol. 96, no. 4, pp. 513-534.
Scordis, N.A. 2011, "The Morality of Risk Modeling", Journal of Business Ethics, vol. 103, pp. 7-16.