Departmentalization Of Insurance Companies

Departmentalization Of Insurance Companies

The company treasurer or controller may be a functional counsellor quite than an executive notability. The identical thing may be true of the legal counsel. Often, functional officers are eventually elevated to the position of executive officers by promotion to a vice - presidency. Hence, although the office of legal counsel may not be recognized by the charter of the company as an executive office, the counsel may be made an executive doyen by promotion to the position of " vice - president and legal counsel. "
In a small insurance company, just as in any small business, departmentalization may be hypothetical; that is, employees may perform functions in several departments. Executives, especially, may have charge of several departments. In the immense company, of course, the various territorial departments may be virtually companies within themselves, in that they may be staffed to perform every function needed to that department without assistance from any other department.
A small company may have a propensity to be more trustworthy and less complicated, but a larger company is less likely to flock, and would everyday be cheaper. But all companies are different, so it is up to you to decide which can maintain the best life insurance.
There are at incipient five bases of departmentalization: functional, product, territorial, customer, and executive affection.
Functional departmentalization is based upon functions performed. Thence, there would be a legal department, an investment department, an agency department, an advertising department, a purchasing department, a claims department, an engineering department, and the like.
Product departmentalization determines the scope of a department by the type of product with which it deals. In an insurance company, there may be a life insurance department, an native and ocean sailing department, fire department, liability department, automobile department, phenomenon and health department, and others.
Territorial departmentalization means the departments are steadfast by the department over which they exercise jurisdiction. Ergo, in a large insurance company, there may be an eastern department, a western department, and others. Most companies which do business outside their own country will have a foreign department. The foreign department may be more stricken down, for offer, into a Latin American Department and a European Department.
Customer departmentalization establishes departments by the temperament of the class of customers with which it deals. Customer departmentalization is often difficult to limn from product departmentalization, the two being sometimes virtually corresponding. In insurance home office operations, pure customer departmentalization, for example, will be create in a reinsurance department, which deals with sales to other insurance companies; a particular risks department, which handles the mammoth self - rated accounts; and a group department, often including honorarium savings and pension trusts, which sells only to employers and in the mass reasonably than to individual policy buyers.
An easy distinction would be a department that deals exclusively with life insurance rates without medical, versus a department that deals with life insurance rates that lack an exam.
Finally, executive sympathy must be recognized as a very practical and frequent basis of departmentalization. Departments may be organized along the produce of the notice of any habituated executive or executives in the business, even though those interests may be tolerably varying.
The bases of departmentalization vary from company to company. They also vary within any one company. Many of the departments of a company are organized along functional wares, although much use is made in the insurance business of product, customer, and territorial departments.