Monitoring and motivating outworkers : the case of the AMP and the sale of industrial life insurance 1905-1940

The development of labor management practices in the financial services sector provides an interesting insight into how problems associated with agency issues were overcome. Within financial institutions and other white collar occupations, the use of internal labor markets emerged as an effective means of both controlling and motivating employees. However such management techniques were only effective in cases where work tasks could be internalized. The business of some types of organizations necessitated a division of work tasks between those undertaken within the office and those undertaken outside the office. The management and sale of insurance products is a case in point. This paper explores the development of processes implemented to resolve a specific type of labor management issue, namely the control of workers under conditions of uncertainty. Using the example of the Australian Mutual Provident (Australia's largest life insurer), it analyses how and why particular work relations procedures were developed.

The curious case of the Occidental and Regal : the evolution of solvency and disclosure standards in the Australian life insurance industry

In 1990, the Australian life insurance industry was rocked by a scandal that threatened to destabilize consumer confidence in the ability of insurance providers to meet policyholder liabilities. The incident highlighted the nature of the agency problems that arise when conditions of asymmetric information exist. It revealed systemic weaknesses in accounting, solvency and disclosure standards as they applied to life insurers. This article uses an evolutionary concept of agency to analyse government and industry responses to this event. It is argued that initial adaptive responses stabilized the industry and averted a more serious crisis. Longer term innovative responses led to the introduction of a new and more rigorous approach to reporting and solvency standards, which has improved information flows and agency outcomes.

The privatisation experience in the Australian banking and insurance sectors: an explanation of the change in ownership structures

Deregulation has been a feature of the evolution of financial markets in the past two decades. Extending this trend has been the move to privatise government-owned financial institutions. In the 1990s, Australian governments progressively sold publicly owned banks and insurance institutions. One outcome has been that few of these privatised financial firms exist today, having been absorbed in mergers and acquisitions within the financial services sector. This paper uses an information cost framework to explain the experience of privatised banks and insurers. Our approach points to a dynamic process of organisational change that has influenced the outcomes of privatisation in the financial services sector.

Use and cost effectiveness of computer based training in the insurance industry

Training is essential to the growth and economic well-being of a nation. This need for training pervades all levels of industry, from a national level where a country’s well being is enhanced by training, to each company where productivity is improved, down to the individual whose skills are enhanced and as a result improve their position in the employment marketplace. The Australian Bureau of Statistics report ‘Training and Education Experience –Australia’ (ABS 1993) indicates that training in Australia is undertaken at a significant level with some 86% of employers undertaking some form of training. This is slightly higher in the Finance industry at a little over 89%. On the job training is undertaken by 82% of employers and off the job training is used by 47% of employers. In 80% of the off the job cases these courses were conducted in a conventional manner using an instructor. The remaining 20% of cases were either self paced (14%) or instructor based (6%). These latter cases could involve Computer Based Training (CBT). The report, referred to in the last paragraph, also indicates that a significant aspect of business in Australia is that 95% of businesses have less than 20 staff. This poses significant problems in that the ability to deliver effective training is limited. With businesses as small as these their size does not permit them to carry specialist training personnel so this role falls to the senior staff. These people already have a full workload and their ability to be able to take on training duties is limited. In addition these people were employed for their technical skills, not training. It may be that their ability to fill the role of a trainer is not good and as a result the training may not be very effective. In addition, small business has difficulty in releasing staff for training, The difficulties faced by small business were recognised by the Australian National Training Authority in their 1995 report which indicated that there was a need to develop a ‘training culture’ among small business employers. The authority made a commitment to provide flexible delivery strategies. This includes Computer Based Training (CBT). CBT has existed since the 1970’s. It came on to the scene with a flourish and tended to provide ‘page turning’ programs or ‘drill and practice programs’. In limited areas this form of training became popular but its popularity waned in the 80’s. With the advent of better graphical displays, larger and faster memory, and improved programs in the 1990’s the quality of CBT today is superior to those offered in the 70’s and has greater appeal. Today, still photographs and video clips can be displayed and made interactive. Because of this CBT is making a comeback and starting to have a greater impact. The insurance industry covers a wide range of companies in Australia, these companies vary in size from companies with employees in the thousands to companies with less than five staff. While the needs of the employees of each are similar the ability of these companies to deliver the training varies significantly. Any training can be divided into two parts. Internal or on the job training and external. External training deals with those aspects that concern the industry as a whole whereas internal training affects the individual company. Internal training would deal with matters like company procedures, company products and the like. External training deals with matters such as legislation, products generally, and the like. In the insurance industry the major problem arises with the small companies. Insurance companies would tend to be large in size and able to cover their training costs but the insurance brokers who would make up, numerically, the major number of companies would have a significant number of companies that fall into the 20 staffer less category. In fact many would have a staff of less than 5. While CBT can benefit all companies it is these small companies that could benefit from it the most. This thesis examines: • The place of CBT in training, its cost and effectiveness. • The incidence of CBT in the insurance industry and how the industry determines its effectiveness. • If a program that meets an industry need is able to be produced at a realistic price?

The privatisation experience in banking and insurance in Australia

The role of ownership in performance of financial institutions is under-examined yet remains a topical issue. Whilst ownership changes in the banking sector have been evaluated in several studies, the link with other sectors has not been a focus of in depth analysis. A controlled comparison of performance between privatising banks and insurance firms in Australia is undertaken via a ‘meso’ approach of pairing privatising with comparator private institutions across the event period. Performance is evaluated using commercial CAMEL indicators and applying Wilcoxon rank tests (Otchere and Chan 2003) which provide statistically robust findings in the small annual data samples available around the privatisation event. Performance of privatising and private institutions is found to be quite similar before and after the event. For the privatising banks, some indicator medians improved to commercial levels (CBA) or were mostly unchanged (Colonial). By contrast one of the privatising insurance institutions (Suncorp) was found to outperform the private insurance comparator while there was little difference for the other (GIO).

Household structure and consumption insurance of the elderly

This paper examines the role of household formation in providing consumption insurance to the elderly. Using data from the Consumer Expenditure Surveys, raw tabulations of per adult equivalent consumption indicate that the elderly who live alone have higher levels of well-being relative to those who live with others. This is misleading, however, because the decision to live alone is clearly endogenous. The empirical estimation accounts for this endogeneity using data from the Panel Study of Income Dynamics. The results provide evidence that household formation plays a significant role in maintaining consumption levels. Without the opportunity to live with others, the welfare gap measured by the difference between per adult equivalent consumption levels of dependent and independent livers would be even larger. These findings suggest that co-residing with others effectively supplements social security, pensions, and private savings and helps the elderly to smooth consumption in old age.

Improving our superannuation regime : a post-Henry review look at superannuation taxation, raising superannuation balances and longevity insurance

This paper examines what, if any changes should be made regarding certain aspects of the superannuation system. Specifically, it looks at possible changes to the superannuation tax regime, measures intended at increasing superannuation balances, as well as policies aimed at improving the price and availability of retirement income streams. The recommendations of the final report of the Henry Review on these issues are also critically evaluated. The paper finds that a greater targeting of superannuation tax concessions towards middle and lower income earners would make the system more equitable and achieve other desirable goals such as increasing voluntary savings. Furthermore, the available evidence suggests that the current mandatory contributions rate of 9% is adequate, and a higher contributions rate is likely to have more costs than benefits. On the issue of superannuation income streams, the article finds that whilst taxpayers should continue to be allowed to take their superannuation as a lump sum, policies should be implemented to make lifetime annuities more readily available and better value for money. The Henry Review's recommendations on these issues, with some exceptions, are for the most part sound and based on logic.

Drought-rainfall cycles as potential environmental drivers of fowl plague and Newcastle disease uutbreaks in Australian poultry

Climatic conditions in Australia are erratic and characterised by periods of intense rainfall followed by periods of intense drought. This has considerable impact on the population dynamics and ecology of many Australian species of waterfowl, which are thought to form the reservoir of avian influenza viruses (AIV) but may also be important carriers (and possibly reservoirs) of other diseases (e.g. bursal disease, Newcastle disease). During the wet, waterfowl numbers increase with many serologically naive juveniles entering the population. During the subsequent period of drought, bird densities increase in the few remaining wetlands. We hypothesise that it is during this period of increasing densities of naive birds that the population’s viral prevalence of some infectious diseases may increase dramatically. Indeed, there exists a remarkable and suggestive coincidence between outbreaks of fowl plaque and Newcastle disease in Australian poultry farms and the periods of drought following a very wet period. In other words, we suspect a link between increased risk for disease outbreaks in poultry farms and the hypothesised high in the prevalences of the viruses causing these diseases in waterfowl. Given that poultry farms may provide ideal conditions for development of high-pathogenic strains, there is also a reciprocal risk for wildlife involved during these periods.

The whole-body fatty acid balance method : examples of its potential for feed efficiency and product quality optimisation in fish and poultry

Dietary lipids and fatty acids are not only fundamental in determining animal performance, but also determine the eating qualities of animal products. Several methods have been used to quantify fatty acid metabolism but most involve expensive in vitro approaches that are not suitable for most laboratories. Furthermore, there is considerable variation between methods with regard to enzyme activity, which makes comparison of results between studies difficult. The recently developed whole-body fatty acid balance method (WBFABM) is a simple and reliable in vivo method for assessing fatty acid metabolism, including rates of liponeogenesis and de novo fatty acid production, β-oxidation of fatty acids and bioconversion (elongation and desaturation) of fatty acids to long-chain polyunsaturated fatty acids. Initially developed for implementation with a fish model, the WBFABM has proven to be a simple and effective method that can be used in any laboratory equipped with a gas chromatography unit. Since its development, it has been used in several farmed finfish feeding trials and in broiler chicken feeding trials. The WBFABM is currently used at research institutions worldwide and its use is increasing in popularity among animal scientists. With this method, it is possible to track the fate of individual dietary fatty acids within the body. The WBFABM could contribute significantly to information generated by animal feeding trials.

A comparative analysis of decision trees vis-à-vis other computational data mining techniques in automotive insurance fraud detection

The development and application of computational data mining techniques in financial fraud detection and business failure prediction has become a popular cross-disciplinary research area in recent times involving financial economists, forensic accountants and computational modellers. Some of the computational techniques popularly used in the context of - financial fraud detection and business failure prediction can also be effectively applied in the detection of fraudulent insurance claims and therefore, can be of immense practical value to the insurance industry. We provide a comparative analysis of prediction performance of a battery of data mining techniques using real-life automotive insurance fraud data. While the data we have used in our paper is US-based, the computational techniques we have tested can be adapted and generally applied to detect similar insurance frauds in other countries as well where an organized automotive insurance industry exists.