Trying to out-smart market timing can be dicey business. I'm nota stock broker, but investment professionals I trust warn against amarket-timing investment strategy–essentially banking on timingyour buys at the trough and your sales at the peak. It may work inthe short run, but over time this has proven to be a very riskystrategy dogged by low returns and unexpected losses. Despite that,I am told that brokers routinely deal with investors who are surethey can beat the system, mesmerized by the allure of grabbing justa little more of a good thing.

Some of the best insights in life come through restating theobvious. Here's something we all know: the insurance market, andthe medical-professional liability market in particular, has beenstuck in an unprecedented soft cycle, producing downward pricepressure that has delighted our clients for more years than most ofus would care to admit.

As things drag on with no clear inflection point in sight, it'stempting for even the best clients and brokers to become obsessedwith squeezing every last soft-market dollar of savings possibleout of this unique market situation.

That said, let me suggest a few obvious insights I've seenbrokers and clients walk right past in their drive for costsavings:

1. Premiums at historic low levels mean everyone's prices arelow–from A+ rated carriers to unrated carriers and everything inbetween. Premier quality coverage hasn't been this affordable in along time. Saving a few dollars with a low or unrated carrier atthis point falls clearly into the realm of market-timingrisk–trying to out-guess the tipping point of the next hard marketonly to squeeze out those last few dollars of savings. Historysuggests that gambling with client dollars and your reputation isprobably not the best long-term strategy given the optionsavailable. Clients can move to high quality at great prices and bewell positioned for the next hard market.

2. Many coverage add-ons included with policies make nicecompetitive talking points, but really don't provide adequateprotection for clients' needs. A classic example is the cyberliability endorsement included by many carriers at no additionalcost. Cyber liability protection is a legitimate need in today'smarket, but these add-ons come nowhere near real-worldprotection.

The quick math goes something like this: Most physicians have apanel of 5-10K patients. A cyber breach puts into motion severalrequired actions, the first of which is notification of alleffected parties. Notification runs between $2 to $3 per affectedparty–around $20,000 in our example, and consuming nearly all ofthe $25,000 coverage limit typical of these policies.

That's just the starting point. A typical breach will alsorequire forensic research, credit monitoring for effected thirdparties, IT expert consultation, legal representation and oftencrisis PR and communications to manage impact to the physicians'reputations.

3. Many options exist for differentiation. With pricecompetition so fierce, there are other offerings available thatmake attractive points of differentiation, adding real value forthe client. We can add real value by providing a cyber policy thatincludes not only adequate coverage limits, but the cyber crisisteam so crucial to dealing adequately with these serious andemotionally draining incidents. While these represent an additionalcost to the client, they too are priced very competitively. Presenting this to your client, you have the opportunity to providereal value and expert advice and deliver affordablepricing.

Another example is in the realm of risk management. Whilewe all know physicians take risk management CMEs primarily for thepremium discounts, there are innovative approaches being introducedthat attract physician engagement on topics of high interest tothem. One program, from a company called Astute Doctor,engages physicians on the “soft skills” (not clinical issues) thatrecent research verifies drives 70% to 80% of malpracticelitigation. Topics like “The 10 things a physician should never sayto patients” reflect this real-world approach. These interactivecourses are peer-research based, practical and focused on skillsdevelopment and transfer. This program proved so compelling, it wasrecently endorsed by Cleveland Clinic Foundation Center forContinuing Education.

I'm certainly not going to try to out-guess market timing forthe hard market turn. We know it's coming, but when is anyone'sguess. However, I recognize value when I see it. It seems to me weare sitting on a historic opportunity to bring that value to ourclients and set them–and ourselves–up for a successful andprofitable ride into the hard market on the horizon.