Happy New Year. It’s time to rewind, re-evaluate how you did in 2009, and make resolutions for 2010. I’m not big on making resolutions I know I won’t keep — like sticking to an overly ambitious exercise regime. But the start of a new year is a great time to refocus one’s efforts on the areas that are important — such as the state of one’s business.
Last year wasn’t exactly rosy for the insurance industry. Premium volume — and profits — were down, and unfortunately, the numbers aren’t expected to “rebound tremendously” in the coming year.
Insurance companies, to counter weak investments, are going to have to focus more on appropriately pricing and underwriting their products. That was the message shared by the Insurance Information Institute’s President and Economist Dr. Robert Hartwig in his advice for the insurance industry in 2010.
And in a separate interview with Insurance Journal, The Hanover Insurance Group Inc.’s CEO Fred Eppinger said: “The heart and soul of what insurance companies should be is underwriting companies. … Insurance companies lose their way when they think they’re investment companies. … If you look at the past 30 years, the people that have made money in our business are underwriters. Year in and year out, they’re thoughtful, they’re conservative, they’re good at what they do.”
Understandably, independent insurance agents are not insurance companies. But the fundamental message in what both Hartwig and Eppinger had to say rings true: People who are successful in the insurance industry stick to what they know, focusing on their core capabilities. Agents should not risk their reputations offering their clients advice if they are ill-informed about the products and coverages needed. Nor should agents rest on their laurels, expecting that business will continue rolling in if they neglect their customers. You wouldn’t stick with an insurer if it didn’t provide you with appropriate products either, would you?
Take, for example, a friend’s insurance policies. For years, she purchased insurance from her uncle, the independent insurance agent. When he retired, a colleague continued with the business, and she renewed the policies year after year. But like other customers in 2009, my friend decided to re-evaluate her coverages and premiums. And in doing so, she found the new agent had made enough errors that she decided to rethink doing business with him.
Who knows why the agent made the mistakes he did. But it could be that he got so busy trying to grow his business in other areas, that he neglected his core customers.
As an agent, your livelihood in 2010 and beyond relies on your ability to provide a quality service. If you diverge too much from your core competencies without knowing what you’re doing, you run the risk of ruining the foundation of your business. So be thoughtful in your resolutions for 2010. If there’s anything you can be sure of in the new year, it’s that your customers will be re-evaluating your business, too.
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