Organizational adaptation to Complexity: A study of the South African Insurance Market as a Complex Adaptive System through Statistical Risk Analysis

TL;DR

This study analyzes how South African insurance companies adapt to external complexities by treating the market as a Complex Adaptive System and using statistical risk measures to understand their coping strategies.

Contribution

It combines qualitative and quantitative methods to characterize the insurance market as a Complex Adaptive System and examines risk management strategies through statistical analysis.

Findings

Insurance market exhibits characteristics of a Complex Adaptive System

Risk measures like VaR and CTE reveal coping strategies

Managerial implications for managing complexity in insurance

Abstract

South Africa assumes a significant position in the insurance landscape of Africa. The present research based upon qualitative and quantitative analysis, shows that it shows the characteristics of a Complex Adaptive System. In addition, a statistical analysis of risk measures through Value at risk and Conditional tail expectation is carried out to show how an individual insurance company copes under external complexities. The authors believe that an explanation of the coping strategies, and the subsequent managerial implications would enrich our understanding of complexity in business.