Executive summary
Royal Automobile Club of Queensland (RACQ) Insurance Company suffers a serious issue in realising successful operation. The senior management team of the company is at the forefront when dealing with disruptions and challenges that hinder effective operation.
RACQ is well capable of managing its risks, since risk management is its chief agenda. The company has been adversely affected by changes in the social, monetary, and environmental backgrounds that have taken place around the globe in the recent years.
Several of the changes took on a higher level of intricacy after the economic crisis of 2008 and international monetary decline.
This paper discusses the aspects that led to this issue, which consist of placing the clients of RACQ at the core of its operations, the requirement for the company to administer capital and risk coupled with combining sustainability aspects in its chief processes and functions.
The knowledge of customer needs coupled with positioning these needs at the heart of all operations is a fundamental business value for the success of any insurance company in the world. With the standing of RACQ worsened by the 2008 monetary crisis, the company should consider rebuilding customer confidence.
In a report, Dr. George Hopkins, the Chief Executive Officer of the company, is quoted admitting that RACQ must take note of the requirements of its clients particularly now that several of them suffer insecurity due to the financial crisis.
The development of competitive products is a continuous challenge for RACQ. However, the inventiveness of the company to discover new techniques of managing risks and pricing them strategically so that both customers and the company benefit has been at the heart of this company for years.
In RACQ, the senior management identifies the meaning of working effectively and competently carrying out operations in an orderly way with lowest dissipation to generate the proposed outcomes.
Optimised functioning is a requirement for enhanced business operations, more competent handling of allegations, decreased costs, advanced competitiveness, greater profitability, and higher shareholder value.
In distressed economic markets, upholding capital stores and achieving reputable proceeds on investments of proprietary and clients is a difficulty task and frequently an insurmountable challenge for RACQ.
This paper also focuses on Strategic Human Resource Development (SHRD) plan that Royal Automobile Club of Queensland Limited should employ to curb this issue. A number of recommendations, implementation, and evaluation for the senior management of RACQ are given at the end of this paper.
For instance, RACQ must join hands with the government to boost the confidence and loyalty of customers in the company and as well develop fiscal literacy.
With the creation of superior and beneficial judgments concerning the effective operations of RACQ, this move will be a confirmation that the company engages its clients excellently and has carried out the essential recommendation steps.
Several of the judgments that senior management and HRD experts of RACQ formulate when carrying out HRD evaluations might carry ethical issues. Ethical issues entailed in this evaluation of HRD are confidentiality and application of deception.
Introduction
Royal Automobile Club of Queensland (RACQ) Insurance Company experiences a key issue in effective operation. The risk carriers, risk managers, and key investors of the company are at the forefront when dealing with disruptions and challenges that hinder effective operations.
The task of RACQ is to bring some certainty, manageability, and steadiness in what is conventionally a messy world. The monetary, social, and environmental transformations that have occurred around the globe in the earlier decade have been arduous for the company.
Numerous of those transformations took on a higher level of intricacy after the 2008 economic crisis and international monetary decline (Bekiaris, 2006, pp. 98-101). In a bid to address this issue, this paper discusses the aspects that caused the problem initially.
This paper also focuses on Strategic Human Resource Development (SHRD) plan that Royal Automobile Club of Queensland Limited should employ to counter this issue. The SHRD involves concentrating on the tasks that analytics of RACQ must carry out in assisting the company overcome the issue of its operation.
This paper targets the senior management team of RACQ to assist it acquire better awareness into the issues at hand and how to address the same (Ryder, 2006, pp. 66-69).
Positioning Customers at the Centre
The knowledge of customer needs and positioning them at the heart of all operations underscores fundamental business values for the success of any insurance company in the world.
This matches the contemporary equivalents of what earlier cohorts of senior managers understood as “the client is king” in addition to “the client is at all times right”.
However, merely because consumer-centricity has been identified for a long time as a vital element in defining success of businesses does not imply that companies are excellent at it (Pokrajac, 2011, pp. 6-9).
For instance, RACQ should do more to position its clients at the heart of its operations and must work hard to remain in line with this principle. The endeavour is worth undertaking since the rewards thereafter merit the efforts employed.
By positioning clients at the centre, RACQ will improve the loyalty and confidence of its customers (Peterson, & Roberts, 2011, pp. 29-76). This undertaking will sequentially give rise to increased sales returns, higher revenues, and eventually improved shareholder value.
In the year 2009, a report from the Insurance Industry Working Group (IIWG) stressed on the importance of insurers involving their clients in a move to position customers at the centre of companies’ operations.
With the status of RACQ worsened by the global economic crisis of 2008, the company should rebuild customer trust (Introducing Anziif Committees, 2010, pp. 46-47).
Dr. George Hopkins, the Chief Executive Officer of the company, stated that RACQ must take note of the needs of its clients particularly now when numerous of them suffer uncertainty due to the 2008 financial crisis.
Developing Competitive Products
The development of competitive products is a continuous challenge for RACQ (O’Brien, 2004, pp. 48-50). Nevertheless, the inventiveness of the company to discover new techniques of managing risks and pricing them strategically so that both customers and the company benefit has been in place for quite some time now.
Development of competitive products is a perpetual practice. RACQ cannot be contented coupled with depending on the products at hand; on the contrary, they have to innovate endlessly, not simply to be in motion with market transformations, but also be ahead in the market if achievable.
Insurance companies that are effective in assisting policyholders become weather-resistant and weather-responsive and eventually become weather-profitable (Kalamaras, Rando, & Pitchford, 2006, pp. 439-441).
RACQ faces a challenge in assisting individuals and groups to transform and become weather-resistant by giving them insurance against weather-changes-associated incidents like floods and storms, coupled with assisting the government become weather-responsive by offering insurance to renewable energy schemes and attempts to decrease emissions of greenhouse gases.
On the other hand, RACQ puts immense significance on providing customers with an extensive and new variety of products for security savings and venture. RACQ continually studies the market with the intention of establishing new products and developing its product contributions.
In so doing, the company stays competitive and offers its clients product resolutions that can befit their various financial objectives and insurance requirements (Delpachitra, 2008, pp. 137-147).
RACQ is as well committing much time to building up comprehensible products like car loans, car hire, and car insurance just to mention but a few. This move follows earlier complaints from its customers that the diction used in a number of its policies was extremely intricate.
Regardless of the encouraging impressions that RACQ present in its reports, a recently conducted survey illustrates that several participants, of whom three-quarters represented their customers, believe that RACQ has poor standing as regards development of competitive products.
A participant stated that there were presently very few new products in broad insurance and reinsurance schemes. In addition, a different participant affirmed that RACQ was cumbersome, sluggish, and not particularly inventive.
In general, participants considered that if not addressed, the issue facing RACQ and other companies would hold back development for competitive products and make the insurance industry more exposed to rivalry mainly from banks (Turner, & Guilding, 2011, pp. 89-94).
Enhancing Functional Efficiency
Senior management in RACQ recognises the significance of working effectively and competently executing operations in a systematic way with lowest wastage of resources to generate the proposed outcomes.
Optimised function is a requirement for enhanced business operations, competent handling of allegations, decreased costs, advanced competitiveness, greater profitability, and higher shareholder value.
Earlier in the year 2011, RACQ made an impressive judgment to revolutionise its business operations and set off on a series of transformational projects. This move created quantifiable enhancements across every region, but the task is far from complete.
The functional capacities must be founded on four strategic foundation stones, viz. functional change, profitable development, people administration, and consumer-centricity.
Functional change signifies the designed and methodical progression of implementing, centring on clients, efficiency, and competence (Armstrong & Paolucci, 2010, pp. 521-538). These might be the true basics on which to construct, but RACQ does not feign it is a straightforward undertaking.
Keeping Strong Capital arrangements and Good Profits
In distressed economic markets, upholding capital stores and achieving reputable proceeds on investments of proprietary and clients has been a hard and frequently unrealisable challenge for RACQ. RACQ has undertaken three strides from the economic catastrophe and financial decline.
Foremost, its capital sources have suffered exhaustive drawbacks like lesser returns and lesser-kept profits, liquidity claims, scarcity investors, little rates on interest, and a decrease in the rate of securities, possessions, and other benefit classes.
Being at a position of less capital intimidates solvency spots of RACQ and its capacity to satisfy the claims of its customers, renders its to the threat of regulatory nonconformity with capital sufficiency rules, and makes it more difficult to write new dealings.
Secondly, its investment selections have lost worth (Swanson, Hume, Hutcheon, & Scott, 2012, pp. 18-22).
Thirdly, the venture of the clients of RACQ depreciated and assets have as well depreciated giving rise to disgruntled customers.
Strengthening Risk Management
The instability in the economic markets extended the handling of risk by the policies and progressions of insurance companies (Bianchi, Ebner, Korherr, & Ubl, 2011, pp. 88-106). They held up well compared with those of banks, but their review and strengthening occur in all key areas where appropriate.
Every approach of handling of risk should be extensive (Connelly, Paolucci, Butler, & Collins, 2010, pp. 3-14); that is, every approach has to be devised at the centre, incorporated across the company, and executed by the leaders of every business line.
Recommendations
Implementation
Evaluation
RACQ should use a computer-based approach with the help of its employees. During a talk with clients, or from filed documents by customers, the information and feedback should be keyed into the system.
Eventually, the information and feedback from customers will be merged with the data from other distribution conduits to construct a single customer outlook.
After the senior management team creates smarter and beneficial judgments about marketing, this will be a confirmation that the management understands clients and has carried out the necessary recommendation steps.
Another way of evaluation is the use of SAS, whose success will be marked by an inclusive enterprise data management atmosphere, integrating every kind of data to permit analyses with the interpretation of both structured as well as unstructured data like text messages, visual information, and electronic mails.
The final evaluation is the assessment of business solutions by business analysts. A move in the right direction is indicated by attainment of higher profits, improved client relationships, better risk management, and a successful human capital policy.
Several judgments that senior management and HRD experts of RACQ formulate when carrying out HRD evaluations carry ethical issues.
One ethical issue entailed in evaluation of HRD is confidentiality. In asking employees questions concerning their performance or performance of others, the outcomes of these investigations might thwart or cause unpleasant treatment by their colleagues if uncovered.
For instance, if evaluation of senior management engages in inquiring employees of the performance of their managers, managers might become angry with employees who report negatively about them. Where achievable, confidentiality should be maintained by use of codes instead of names.
Another ethical issue is the application of deception. For instance, some analysts might feel that a study would give better outcomes if human resources do not recognise they are carrying out an evaluation analysis, or if provided with fake or deceptive information.
This exercise is unethical. Employees would possibly become irritated with the senior management and thus destroy confidence, which is hard to reinstate. Options to deception must be taken into account.
The value of Human Resource Development (HRD) can be articulated in accordance with costs and benefits by measuring Return on Investment (ROI) through incorporation of interdisciplinary endeavors with HRD actualities and distinctiveness. The ROI assessment for HRD is not merely an accounting subject.
The gain of HRD intervention could embrace a value different from monetary, for instance, improvement of customer relations that cannot be expressed in terms of dollar value (Wang, 2000, pp. 23-30). Monetary returns for HRD intervention can be computed in dollar values and include profits for the company.
Conclusion
From this research paper, it is clear that RACQ Insurance Company experiences a weighty issue in effective operation. The senior management team of the company is in the forefront when dealing with disruptions and the challenges that hinder effective operations (Klumpes, 2002, pp. 237-256).
Aspects that lead to this issue include failure to take note of positioning the clients at the core of operations, the need for the company to manage capital and risk, and integration of sustainability aspects in its key processes and functions.
RACQ must join hands with the government to better its operations, not just to boost the confidence and loyalty of customers in the company, but also to develop fiscal literacy.
The senior management of RACQ has a critical role to play in dealing with its effectiveness issue. The evaluation of the key issues in RACQ helps to determine how well the company deals with the setbacks of its success.
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