When it comes to the financial sector, many of the principles taught at the likes of economics school aren’t really being implemented by the sector itself. They speak of supply-and-demand for example, from the point of view of the demand in the market essentially setting the price for whatever product or service consumers require. When you look at financial services such as insurance however, basically the insurer sets the price and the market has no choice but to pay the prices set.
There’s always enough of an uptake for the set price band to be widely accepted as just the way it is and so consumers get out of touch with the actual value of the products and services they’re paying for. How do you measure the value of your insurance, for example? Do you have adequate coverage for whatever it is you’re taking out insurance for?
What happens if you go your entire life without claiming as a result of no payout-triggering event taking place? Would you be comfortable with the fact that you’ve paid all these premiums just so that you can say you’ve enjoyed the peace of mind claimed to be the value-point of the insurance coverage?
One could make a very strong argument that you are indeed paying for peace of mind when you’re taking out insurance coverage and your every hope is that you never have to make a claim because that would mean that something unfavourable happed. I won’t even get into the red-tape and paperwork involved with filing a claim and actually going all the way to get a payout.
With businesses it’s a little different because the premiums you pay to insure any or all business processes and assets are much higher, therefore it’s even more important for you to make sure you get the absolute most out of your insurance coverage.
In the business world, insurance coverage can get very specific, such as perhaps taking out coverage for those assets which form an important part of your business, but are perhaps rented assets. An example of this is renting waste management skips or perhaps using those which are loaned to you by the waste management company your business uses. In this case it would be imperative to devise a way to make the fullest and best use of each of such assets, so to be more specific you’d want to get the maximum possible volume use out of each of the skips your insurance covers.
The skips example is just one which is specific to a company which produces large volumes of waste which would need to be disposed of in line with the regulations set forth by the relevant regulatory bodies, but otherwise making full use of what your insurance covers can apply to your personal life as well. Medical insurance comes to mind as an example in that realm which would have you perhaps making use of the complimentary gym membership they provide you with so that you don’t feel too bad about the fact that you’re religiously paying your premiums and yet you never have any serious medical issues to have to deal with.