For many years the American Council of Life Insurance (now Insurers) maintained a trend analysis program (TAP). The function of the TAP committee was to look beyond the current horizon in an effort to spot trends that afford either a challenge or an opportunity for our business.
They did not monitor legislation itself–that was the function of government affairs people–but they did seek out trends or events that might infringe upon current or future legislation.
The heart of the TAP effort was the dozens of home office people scattered about the country that provided input to the committee. Each of these people was assigned a specific publication to read and monitor, in the hope of spotting an issue from outside our own business that might some day impact upon us. Each year an annual meeting was held for these monitors, and the collective wisdom thus assembled tried to sort out the various issues observed and evaluate them in order of their likelihood of impact and their importance.
I was privileged to serve on the TAP steering committee for a number of years and thought it was a very worthwhile exercise. Unfortunately, the program was eliminated in the wave of cost-cutting measures the ACLI experienced about 15 or 20 years ago. At the time, the people closest to TAP felt this was a typical “pennywise and pound foolish” decision.
Given the amount of volunteer labor involved, it struck me as an extraordinarily cost-effective way to gather vital information affecting every aspect of our business, so I was also saddened to see it go.
Service on the TAP program did, however, condition me to the importance of looking over the horizon and I continue to try to do so. It is in that context that I raise a concern today that could have a serious impact on our business. In the spirit of TAP, I offer the following events:
ITEM: A close friend experienced two very small claims and his homeowners policy was canceled by a major direct carrier and after 20 years of being claim free. Other carriers showed no interest after learning of the cancellation.
ITEM: The homeowners association where my sister lives was canceled. This occurred following a premium increase from $15,000 to $48,000. The association experienced one significant claim. Individual homeowners had to scramble for individual coverage.
ITEM: Another close friend had $1,700 worth of tools stolen from his truck. The agent advised him not to file a claim lest he be canceled. He had had no other claims.
ITEM: The homeowners association policy where my granddaughter lives experienced a premium increase from $5,577 to $12,684. They had one small claim in five years.