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November 17, 2002 at 07:00 PM
In The Aftermath Of War, Expect Growth In Insurance
Down and up swings seem to be part and parcel of how the insurance industry responds to periods of war.
People who are now in the industry need to be aware of this pattern, as they chart a course for themselves and their clients during todays war on terrorism (and recession as well).
In short, if sales of certain products seem to have slumped, and if certain markets seem to have dried up, this is not the end of the story. Better times are ahead.
Let me explain first by recalling my own experience with war and insurance. Then, well look at what history has to teach us about this subject.
By early 1943, I had passed three “actuarial exams” (out of eight) and was looking forward to a long career in the insurance industry.
But World War II was on, and I soon found myself, as a private, in a Canadian Army Infantry Training Camp. The war did not seem to be going well, and all of us in the camp felt the war would go on permanently and that our careers were forever stopped.
I heard that things in the insurance industry were not going all that well, either. The business seemed to have fallen into a do-nothing mode, just taking care of business and not producing much by way of improvement or innovation.
Well, the war did end, as you know, and the victory was a source of great pride. I soon learned that my career had not stopped and that the insurance industry was getting out of its do-nothing mode. Things definitely looked up after the war was over.
I submit to you that a similar down-and-up pattern will occur with this present war.
It is true that, in some sectors of the insurance industry today, careers seem to have stopped short, just as mine seemed to have done so in World War II. Also, the industry seems to be in a do-nothing mode in certain sectors (its working hard to preserve what it has now, for instance, rather than putting an all-out effort into designing entirely new products and services.)
But Ive been studying the impact of war on the insurance industry for quite some time, and Ive concluded that there is reason to expect brighter days ahead.
