For Your Consideration

Some subjects just lend themselves to exciting writing: politics, religion and of course, the current media-created sensation du jour, Britney Spears. Let’s face it: writing about insurance is kind of like trying to make paint drying exciting and inspires as much enthusiasm as the thought of watching grass grow.

Well, no argument here. In fact, after spending close to 20 years in my chosen profession, it’s absolutely true that people want to know about their coverage exactly on two occasions: when their premium is due and when it comes time to file a claim. This should not exactly surprise anyone.

The industry is vast and complex and it’s not surprising to get (at least) 2 different answers to any one question asked. Even alleged “experts” disagree on fine points of coverage (ask a victim of Hurricane Katrina if their loss was a result of a flood or wind damage) and in many occasions, the court system is relied upon to tell us what the definition of is is. And so goes the insurance industry’s delicate dance with the legal system. It’s sometimes impossible to imagine one without the other.

Personal financial risk management is not for the timid or weak of heart. The best insurance people find reasonable solutions to the very real risks faced by their clients. When things go well, the work goes mostly unnoticed, due to the intelligent risk management design of an insurance professional.

There is a subtle, yet real difference between the terms customer and client – they are not interchangeable. Essentially, a customer is a Wal-Mart shopper: the active party in a transaction. A client is generally defined as one who is “under the protection of another”. Usage of the term “client” conveys an active professional standard and duty of care, which may be why the term has fallen out of favor.

Over the past decade, insurers have come under increasing pressure to become more a “financial services firm that happens to do insurance” than what most people think of as the traditional financial risk transfer role of insurers. With this subtle transition, and much to my dismay, insurers have been quietly exiting the “client” business.

Of course, the insurers are not solely to blame, as they will stress that they are only reacting to consumer demand. There’s truth to it: One cannot get through an evening without seeing at least one TV commercial with an animated character espousing the ability to quote, bind and print auto insurance policies online within minutes.

The subtext is clear: The burden of being “correct” has shifted to you from the insurer (or its representative) . Regrettably, the choices made will not be known to be adequate until AFTER an incident. Let’s be careful out there!

This entry was posted on Saturday, January 19th, 2008 at 18:52 and is filed under Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.