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First, all pricing should be based on the frequency and severity of claims. Moving away from this basic tenant is what got us into trouble in the first place. Good accounts that proactively manage their shop through resourceful risk management and loss control programs deserve better treatment, additional services, and better pricing. Having taken it on the chin for the past two years along with the “all other” accounts while the market caught up to itself, it is only fair to stabilize their pricing at a level that is appropriate yet still profitable. As far as the others go, let’s remember what we are here to do – design insurance programs that enable our clients to prevent injuries, save lives, and avoid financial hardship. Clients that have consistently poor loss histories are not just costing us all money, they are indirectly ( and perhaps innocently) promoting injuries and deaths by failing to implement the counter measures necessary to create and maintain a safe work environment. If an ounce of prevention is truly worth a pound of cure, there is no better place to apply this axiom.
Second, competition is good. It is what drives our economy and our society. Competition combined with specialization is even better because it promotes efficiency, innovation, and expertise. As our carriers continue to specialize by product line and business segment, they will gain a deeper and more comprehensive understanding of the needs and issues that are unique to their niche. Consequently, they will craft their products to better answer these needs and design specialized risk management and loss control programs that do more and save more.
Third, only the strong will survive. Stated better, agencies and carriers that have proactively serviced their accounts will continue to do so and grow and retain their book. Agencies and carriers that bring nothing more to the table than cookie-cutter products and price will not be as fortunate. Placing under-priced, poor-performing risks in an unforgiving market will continue to be very difficult at best and very expensive. So, we either get better, or, ultimately, we get gone. This self-imposed cleansing and redefinition of our best practices will eventually lead to enhanced client education and safety awareness. Ultimately, our clients will shift their buying habits and learn to appreciate the value, integrity, and trust that is characteristic of a healthy and thriving relationship with a reputable insurance partner. They will acknowledge that price is a factor in their insurance placement decision; however it is only one factor. They will recognize that we all get what we pay for and they will learn to shop for a comprehensive and proactive insurance program rather than just a policy and a price. They will evolve because we will evolve.
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