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 exercise regime (when I don’t even own a pair of running shoes). But I am all for renewing my commitment to something significant, like improving my parenting skills and taking a class or two to do so.
Last year wasn’t exactly rosy for the insurance industry. As you well know, premium volume — and profits — were down. And much to the industry’s dismay, the numbers aren’t expected to “rebound tremendously” in the coming year, according to industry experts. So the start of this new year is the perfect time to refocus your company’s efforts on the areas that are important to your business.
Insurance companies, for instance, 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 the new year.
And it started to sound like there was an echo in Insurance Journal’s halls when, in a separate interview, The Hanover Insurance Group Inc.’s CEO Fred Eppinger said “the heart and soul of what insurance companies should be is underwriting companies.”
“I tell people there’s only one Warren Buffett, and I’m not him,” Eppinger said, noting insurance companies should be more conservative with their investment portfolios. “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, my family’s insurance policies. For years, we purchased insurance from our uncle, the independent insurance agent. When he retired, a colleague continued with the business, and we had no problems renewing the policy year after year. But like other customers in 2009, we decided to re-evaluate our coverages and premiums being paid. And unfortunately in doing so, this agent made enough errors that we decided to rethink with whom we will do business.
I don’t know why the agent made the mistakes that he did. But I have a hunch he got too 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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