INSURER, ISSUE 7 (168) 13-27 APRIL 2001.
FEAR AND BUSINESS I : SUCCESS AND FAILURE, WEALTH AND POVERTY ARE A STATE OF MIND
“Take no chances! ”, but “Fear takes you no further! “ – Bulgarian folklore
BORIS GEORGIEV
Since we live in a developing free-market society, fear can be spoken of in general, because if fear did not exist, insurance business wouldn’t have existed either. There are insurance companies all over the world, and there is an irreversible conclusion that the fear of various risks, as they are referred to in the style of insurance, is ubiquitous, and sometimes it can be simply defined as pure business interests. Thus “fear” and “business” exist together and separately, and they quite often go hand in hand.
Businessmen insure their business because they fear the outcome of their enterprise; they insure objects and subjects, or rarely the enterprise itself, which is a very logical phenomenon. At the same time, in society there is an insurance market, which in different situations but principally in the same manner, involves different insurable risks. The practice has it that those who indemnify the financial aspect of risk realization, are to be called “insurers”.
The wide range of readers are hardly introduced to something new or unfamiliar so far, but let us lift the curtain slightly and remember that insurers are businessmen of sorts, so they also have their own business fears. Some insurers re-insure these risks while cumulating the risks taken, and, as a result, their business fears are diminished or reduced to acceptable levels. This is as old and familiar as the insurance business itself. It is difficult to mention something new or relatively up to date information in this respect, so in search of the crucial things, we should pay attention to something else. The quick look over the formation of the insurance market and its rudimentary statistical processes, is indicative enough- the insurer bonus incomes, their sizes, proportions and dependences.
The first important conclusion in this respect is that the gross bonus incomes of Bulgarian insurance market have a relatively steady increase, but remain insufficient as compared to the insurance markets in Austria, no matter how daring this comparison can be. This daring analysis is inspired by the desire to rival the leading countries in this branch, moreover, Austria is an EU member-a destination headed to by my country. Perhaps, if we are compared to Nepal or Afghanistan, the result would more pleasant for us, however, this pleasurability would be merely ostensible, because the acceptance of this comparison would be equal to the acceptance that we have lost the insurance business on a national scale. Furthermore, G. Fenton’s bestseller “ How to deal with competition” advises to avoid the company of losers and the retrograding even in comparison.
In terms of size and population Austria is completely comparable to Bulgaria; it is in the same situation of currency board system, but the insurance bonuses turnover of a single Austrian life insurer( not even the leading one) is many times more than the insurance bonus turnover of all Bulgarian insurers, not only in the Life insurance branch, but also in insurance in general. Many authors could be found to explain the objective and subjective causes of this phenomenon. Not only must things be explained, but also they must be changed; thus the worthy goal could be defined as follows: “Let’s take our analysis to one conclusion, the most important of all, of course.”. What should it be? In the beginning, despite the small number of arguments, a relation between fear and business, re-insurance and other forms of risk distribution, was established, however, considering the official and non-official records, a conclusion has to be drawn that many insurers have nothing to re-insure in reality due to the lack of their bonus incomes(especially when compared to the Austrian ones) and they hardly ever allow existence of the economic subject as a whole.
When there is no income, formally speaking, there should be no risk taken and respectively no business fears. Is that what’s happening in reality? Obviously not! Actually, it’s on the contrary! I am pretty convinced that such insurers sense the strongest feeling of fear. Probably, some would say that in many aspects not only in the insurance business, enterprising intentions, unfortunately, end up with failure, and it is inarguably true that this failure is feared the most. In life insurance, when compared to general insurance, the problems are even more, and this easily noticeable. So, can we think or believe that Bulgarians fear life problems and risks more than life’s biological end, i.e. death itself? Definitely not! Nevertheless, this phenomenon persists. In my opinion, the inability to understand its nature, as well as the unclear definitions related to the evasion of this situation, are due to the fact that fear subconsciously affects the activity of all entrepreneurs, consequently it influences the direct and indirect results of the enterprise. In the creation of a business team, all managers know that the most important criterion for their partners is their activity. Suppression and action in fear have a negative impact on business climate as a whole, which can acquire unthinkable dimensions and provoke serious consequences.
Insurance is nothing more than a function of the suppressed business activity, in its capacity of a mathematical argument of subconsciously used mechanisms of fear; naturally, questions arise.
Laws and regulations are not liable to criticism because practically those very laws and regulations are enforced in Austria, including the currency board system. Consequently, the logical conclusion has to be drawn that the legislative and executive authorities have done their job by drafting, publishing and enforcing the respective laws and acts. So, “the emperor has clothes”, there is no presumption of violation of rules leading to success- law operates. In such cases, Bulgarian folklore has the following wisdom- “ The boss says yes, the porter says no!”. All we have to do is clarify who the porter is, but let us first admit that the “boss” is not to blame, having in mind a tiny exception: he spent a lot of time confronting unfounded attacks, although they were often rather incompetent. I believe that there shouldn’t have been so much time and effort put, because:
“The dogs may bark but the caravan moves on” – have you seen a caravan chasing dogs?!?
I think another thing should have been done, what I mean is to take into account that in the recent years the production of jar caps shows a double decrease due to no demand. It was worth trying to open the eyes of those who could see the fact that there has never been so fast and encompassing road construction in Bulgaria; such facts should be somewhat interpreted. It is not in the preaching that there are no holes on the roads; it’s just the opposite-there are holes on the roads. But there is this tendency, a positive and essential one, and so there is hope. And if there is hope, efforts are made; the first results lead to enthusiasm; enthusiasm leads to success.
In the sense of the above mentioned, we could come to the firm conclusion that success and failure, wealth and poverty, are nothing more but a state of mind. It is obvious that law generates this process, but there is definitely something that stays in the way in its very onset. What is it? Have a good look at the top media headings, and you will get the impression that everyone is wondering how we are still evading the final of the Bible, however, it should be all clear that this is not the thinking of a warrior or an optimist; it is the views of a pessimistic prisoner of war, instead. Yet, the antidote is much more than simple, i.e. it is about time for what is happening in Bulgaria to find its strong positive propaganda because the market logics says: “Those who can must help those who cannot through the market state mechanisms.“ What would happen to those who can and their enterprises if they are not informed or motivated, or if their initiatives are flooded with ice water: the answer is to that obvious. Although most people have never faced their worst nightmare, have they? What is worse, fear is implanted in a highly disrespectful manner: by flat and simple verbal expression.
I believe Bulgaria needs that little to achieve as much as it has never achieved before. Bulgarian mind should get rid of one thing- the fear to do business in your own country. Other fears, those who are insured by us, the insurers, will become more; thus, our branch of business will be adequate in size and efficiency when compared to the business in the European countries. That is what we all desire! It is time to understand how to start the end of poverty, once and for all. We should start with fear. It blurs the picture of all opportunities granted by the laws of society. Those who can see, will find the way!
