New Years Resolution: Embrace Change In 2004!
Aon Ltd. in London suggested three New Years resolutions for commercial insurance sellers and buyers for 2004. We would endorse all three. They are:
To insurers: Get a grip on the cycle!
"Insurance buyers are frustrated by the unpredictability of the roller coaster insurance cycle and lack of recognition for the level of risk and quality of risk management practices. There is a real opportunity to use the structural change that is taking place in the industry for carriers to repair balance sheets and to smooth out the cycle, and thus make the pricing of risk for buyers much more predictable and more closely aligned to the risks involved."
To insurers, agents and brokers: Streamline your processes or risk losing more premium to alternative markets!
"In 2003, Aons survey among corporate buyers found that many insurers were rated poorly in providing value for the money, an efficient claims service, and the speed and quality of processing documentation Lower rates are far outweighed in the eyes of the corporate buyer by consistency and quality of service.
"Increased risk retention levels in 2003 have proved that companies are quite prepared to consider alternatives to manage their risks. The market needs to stick to the principle of utmost good faith and prove that its ability to pay claims is accompanied by willingness to pay."
To corporate insurance buyers: Take terrorism seriously!
"Terrorism continues to be a non-issue for many insurance buyers, having dropped out of Aons surveyed Top-Ten Risk list. Only 27 percent of organizations surveyed have a specific plan in place to address a terrorist attack despite recent warnings of serious threats of such an attack."
We would suggest a few other resolutions for the industry. They are:
To insurers: Topple the Tower of Babel once and for all!
The SEMCI clock has been ticking for nearly 36 years! Thousands of agents and dozens of carriers are already doing business in real time using single-entry, multiple-company interface. Still, some hold back, fearful that SEMCI will strip them of proprietary tech advantages and leave them vulnerable. Universal SEMCI is inevitable. Get with the program or get out of the way!
To agents and brokers: Theres more than one way to sell a client!
With the market sure to be more competitive in 2004, dont succumb to the temptation to be mere price-peddlers again. Only those who remain true risk managers for their clients will survive and prosper in the long term.
To risk managers: Let the buyer beware!
With prices moderating, and bottom-line pressure relentless, the temptation will be to go with the cheapest policies. Shop carefully and make sure the carriers with which you place your risks offer outstanding claims service, a solid financial rating and reliable reinsurers behind them. Youll be glad you did.
From the staff of National Underwriter, we wish our readers and advertisers a happy, healthy and profitable new year!
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 2, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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