8 Misconsurance

1. Manufacturing - Manufacturing of medicines is a complex process that cannot be majorly done in a single manufacturing unit. The sub components required to assemble the final product are developed in various countries and assembled at a final unit but the disruption in logistics during the pandemic made imports, exports and manufacturing very difficult which exposed the major flaw in GVC.

2. Procurement - India is over-dependent of raw materials from China to reduce the economic costs. India is currently importing more than 70% of the required active pharmaceutical ingredients (API) and intermediaries required. Many companies are only dependent on China and the domestic supply has been neglected that turned the tables when China imposed regulations and lockdown forcing India to search for alternatives.

3. Distribution - Distribution is also facing unique challenges in the form of reduced staffing, increased demand and orders, delay in delivery of medicines due to restrictions and lockdown, which points out the lack of transparent distribution channels.

4. Cost of drugs - The increase in demand provided the companies a chance to increase their profits. They have increased the prices of many of the drugs mainly the two drugs that have been in high demand paracetamol, vitamin the prices have gone up by almost 50%. 5. Increase in duplicate drugs - With the situation in chaos, the duplicate drug markets are increasing at a rapid level. For example, the number of nameless sanitizer brands in market before pandemic and at present have increased. 6. API reserves - As of present, the reserves in major companies were expected to run only for six months and some of the minor companies have already ran out of the inventory and unable to procure raw materials have stopped production temporarily.

As for the future, India is provided with a chance to prove its power and capability to take on the challenges and overcome them. It is a blessing in disguise as it opened an opportunity to invite companies that are exiting from China and establish itself. When it comes to pharmaceutical industry, Indian government and companies still have a lot of loop holes to work on to position itself at global level.

1. Supply chain risk management practices and mitigation - Companies should re-evaluate their strategies, risk assessment. They also have to consider dual sourcing and location of supplier and the import rate of API and slowly shift to domestic suppliers to avoid any future problems.

2. Digitalization and Automation is expected to flourish to create more transparency in distribution as this will help the distributors and manufacturers to keep an eye on the stock visibility and improve

forecasting. 3. Although being largest producer of medicines, India is not a vaccine developer. So, companies have to adopt to new technologies to be more efficient and productive and should focus on R&D to develop new vaccines and stay updated on the situations around the world.

4. Sourcing/Mapping: Companies should have a clear mapping of the suppliers available at different geographic locations and details regarding the production capacity, quality, methods. This information will help the companies to look for alternate supplier very easily, in case of unexpected situations.

5. Simulation of different strategies based on different conditions and parameters should be prepared and these results will be very useful in selecting the best supply channel under any circumstances.

6. Take advantage of Make in India which opened a new chapter to Indian companies and people by promoting self-dependency. This has brought different schemes to collaborate and cooperate in researching, developing and promoting the companies with a financial aid from government.

Covid19 has created havoc not only on the people but on all industries across the world by disrupting their supply chains completely by creating difficulties at each step of the process and shortages and fear among the people. This pandemic shifted the main focus of the world to pharmaceutical industry and its supply chain across the world. It exposed the flaws in the current supply chain and methods the companies are following. With human ability to learn from mistakes and adopt. The postpandemic is expected to witness drastic change in the industries supply chain, strategies, digitalization, technological advancement and distribution transparency with more reliable and efficient methods. It reminded the world the importance of research and development to forecast the future and prepare for the unexpected.

“Insurance is a subject matter of solicitation” we all must have heard this statement in a lot of insurance advertisements but hardly some of us would know what it actually means. This was mandated by IRDAI and it basically means the products are not meant to be sold by the advertisement but the customer have to reach to the intermediary for purchasing the right insurance policy. While doing my internship in an insurance company, I noticed a lot people having misconceptions about insurance so what is the reason behind it? And, the answer I got was lack of awareness and knowledge.

So, this made me talk about misconsurance, which was derived from two words misconception + Insurance. In this article I would be majorly addressing some of the popular misconceptions about insurance.

Let’s start first from defining the term ‘Insurance’. Insurance is considered to be a legal contract between two parties ‘Insured’, the person who is willing to purchase the policy and ‘Insurer or Insurance Company’, the entity who is willing to accept the risk for a remuneration. Here, ‘Insurer’ promises to pay a certain amount if any event happens as stated in the policy to the subject matter, known as ‘Sum Insured or Sum Assured’ and in return the ‘Insured’ pays a regular amount of money for a certain period to the ‘Insurer’, commonly known as ‘Premium’.

Generally, Insurance is classified into two broad categories i.e., General Insurance and Life Insurance. General Insurance can be further classified into motor insurance, marine (cargo or hull) insurance, fire insurance, liability insurance, etc., whereas life insurance is classified into mainly six type of policies which consists of Term insurance, Whole life insurance, Unit Linked Insurance Plans (ULIPs), Endowment Policy,

Annuity Plans, Money Back Insurance plans.

Now, let’s talk about the whole insurance process. We all know about filling up a personal detail form got through an agent or broker and then submit it to the insurance company then the policy is either extended or not and accordingly calculation of Sum Insured, premium amount, policy tenure, etc., is done. And, in the time of crisis, you go for a claim. But is insurance limited to that only? My answer would be somewhat similar but a lot more details are missing in here. After reaching out to an agent or a broker, a specific policy fulfilling your needs is chosen and then a form is filled which is known as ‘Proposal Form’, it contains personal details and the details of subject matter.

Let’s say I want to purchase a Term insurance policy for myself then I need to mention the details such as my past health record, my family health history, my hobbies, occupation, etc. A question might pop up in your head why do such things matter for the ‘Insurer’? For their general knowledge, it isn’t important but we should know that Insurance is a method of transferring risk so as per the principle of insurance ‘Uberimma Fides or Utmost Good Faith’, both the parties should disclose all the material facts and the effect of such information might the affect the magnitude of risk which is the base for calculation of premium. Higher the risk, Higher the premium.

After submitting the proposal form, the insurer either accept, reject or accept with some special terms then accordingly the policy is initiated. A lot of us do not know about the concept of ‘Free-look period’, it is a certain amount of period provided to the Insured in which they can review the terms and conditions of the policy and can cancel a policy. This time period usually consists of 15 days and the first premium paid is refunded deducting expenses such as administrative costs, etc. A proposal form before being accepted or rejected is carefully examined and in here the major part is done by the ‘Underwriters’, they are the people who analyze the factors affecting the risk and take the decision of acceptance of policy and on what terms. The underwriters are classified into several other categories such as financial underwriter, Domain specific underwriter (Medical underwriter for life and health insurance), etc. For any changes or updating of information, the policy is called and an attachment is added which are known as ‘endorsements.’ For claims, a similar certain procedure is applied where a claim form is submitted by the insured and then the Insurer appoint a ‘Surveyor’, to assess the loss and its credibility and on the basis of surveyor’s report and policy’s terms and conditions, the claim is either accepted or rejected.

We discussed a basic idea of insurance, its terminology and process but our main concern is still left to be addressed and those are misconceptions about insurance. Some of the popular misconceptions are “Insurance is not needed until any occurrence of loss”, “Other investments are far better than Insurance”, “Preexisting diseased person is not allowed to take an insurance policy”, “Claim is provided whatever the reason of loss is”, “A group insurance policy opted by the employer for its employees is sufficient”, etc. Are these actually true or just a misconception or a myth? If an insurance policy is purchased after the occurrence loss it would be escalating moral hazard and the insured would be less careful about

his subject matter and also it may lead to insolvency of insurance companies. Other investments such as gold, securities, etc., are definitely a far better option but insurance is not only an investment but it is more of life cover or financial cover from unexpected losses. Pre-existing diseased person can have an insurance as per his/her risk profile probably their premium would be high than a fit person or might include some exclusions. A group insurance policy opted by an employer is not sufficient for an employee and an additional individual policy is definitely recommended. And, to safeguard the interest of general public IRDAI was established to regulate and supervise the insurance business in India in the year 1999. I hope I was able to clear at least some misconceptions or doubts.

Rishika Nigam ICFAI Business School Hyderabad

The current pandemic situation has brought in tremendous changes in the current organizational and workforce models, they are no longer similar to what they were before. The entire working system has to survive by prioritizing what is important, working on necessary operations, and have found way out for constraints of technology.

The supreme courts in some countries have started adopting oral arguments for their justice. This way it has safeguarded themselves from the virus and has enabled them to live broadcast the proceedings to the public. With the numerous challenges, the virtual working environment has been effective in a lot of ways, like, it has enabled flexibility in people’s daily schedules, and they can work between different departments. With the stretch of pandemic throughout months and now years, the new reality of work unfolds wherein the Government is required to plan the shape of the future workforces. The temporary fixes have worked for now but won’t for longer durations. Covid-19 has also made it clear about what exactly is the priority for getting efficient output and how? When? And Where? Should people work to get productive and successful organizational results? It is a golden opportunity for leaders to articulate to shape the future workforce. Instead of making trivial changes in the current organization structure, they could rather take a big step towards forming the future workforce. Any plan which might seem as an impressive plan now might not be a grand plan later. A plan that fits in perfectly in the current scenario will have different repercussions in the future, these plans may not work in the post-pandemic era.

To avoid any kind of discrepancies in the future the leaders must follow certain considerations throughout the recovery phase to avoid taking

backward steps: 1. Leadership Aspect

The current requirements of the team would be very different from what they were in past. The leaders need to be ready to accept the dynamic changes happening and support the diverse teams. This does

not mean that the decisions would be held on till the time the employees are back into office. This would highly reduce the productivity of teams for a longer period. But on a positive note, the employees will know about a holistic working environment of the company. Recruitments too has to look upon keenly. To create a balance between employee costs and business continuity in future scenario a new optimal workforce mix of buy (recruit), build (reskill), borrow (3rd party and contingent), bot (automate) and base (where to locate people).

2. Productivity of Roles

The post-pandemic situation would require the disintegration of work to get a clearer view of what exactly are the skills required, the tasks that would be automated, and how all parts fit together across an organization. The disintegration would lead to efficient working conditions, allocation of properly skilled people that suits them. Cloud platforms, automation and diverse partner ecosystems, effect operations. The workforce can be the ultimate differentiator. An untangled approach towards understanding the exact skills would be essential. Since the current pandemic condition would push employees working in multiple teams, across the department, a reward being added would also help managers decrease absenteeism.

3. Skills

The pandemic conditions have pushed the people to come out of their comfort zones and develop a knack for learning newer skills. With a wide variety of skills available freely it has become easier to learn them. But again, to make an impact on the profile it would be suggested to take up a course that matches the profile. The employer would also become more specific to what they want from the employees. Since there has been a lot of redeployment, employees need upskilling. This will enable them to work across departments. The global gates being opened because of work from home have bought in opportunities with a lot of challenges as well. The managers should ensure that proper training is provided to all the employees throughout, to help them adapt to the conditions.

4. Physical working environment

Throughout the pandemic conditions, the working habits have changed. People have now become very comfortable around homely environments. A challenge for the organization and the team would be to provide a similar kind of conditions to them. The important fact is to ensure safer conditions.

The comfort has to be provided to them again but not at the cost of productivity. The organization should also take a call on which of the tasks can be done from home. This will increase efficiency and help in the reduction of costs.

5. Flexibility in working

The environment has become convenient for them. There is a need to develop mechanisms for remote mentoring, on-demand training and knowledge transfer. A collaborative and socially engaged employee will be created by working in Crossfunctional teams. Aspects like pulse surveys, collaborative virtual tools, crowdsourcing, performance check-ins and anonymous feedback will help provide an integrated view of how well those virtual connections are maintained.

Pushing people out of the homes and fitting again to the physical environment of the workplace will be a task. The management has to look for a balance between the family commitments and the emotional well-being of every employee. Coming back to the routine will always hurt. The change of flexibility would involve a mixture of work of home and office.

6. Emotional and Physical Well-being

One of the biggest impacts of Covid-19 has been on the mental well-being of people. The impact has also been on the physical health of the employees. Therefore, it becomes a necessity to keep them fit because, at the end of the day, a company’s employees are the biggest assets. Frequent calls for communication apart from work, check-ins in Teams, checking if the employees can properly adapt to changes will become necessities. The companies should also encourage healthy lifestyles, conduct events, workshops for the same. The current conditions have bought in a lot of challenges as nobody was ready for it. The world was in other dreams. The bubble which now is burst and showed actual reality. It will become essential for the managers and organization as a whole to be proactive rather than reactive. The operations about to structure the current environment would shape the future. If the operations are not up to the mark, the impression would be felt on the current and future as well. Added, a path has to be found to make it work for present and future conditions for maximum obtaining efficiency.

The word “Kaizen”, where “Kai” = change “Zen” = good, simply means “change for better”. In English Kaizen is typically applied to measures for implementing continuous improvement. It is an approach to activity organisation based on common sense, self-discipline, order and economy and is a strong contributor and fundamental part of a lean production process model in lean manufacturing.

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