Disability insurers should be trying to do more than just trying to get by.
Drew King, president of JHA Inc., Portland, Maine, a disability insurance consulting firm, urged executives here for JHAs 12th annual disability conference to “take the road less traveled” and find ways to adopt a longer-term approach to building customer relationships, sales and profits.
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“We improve the lives of millions of people every day, whether they ever submit a claim to us or not,” King said. “We must demand an adequate return for the risks we take.”
Disability insurance executives should ask themselves whether shifting to a longer-term outlook and pushing for adequate profit margins might not help them avoid the kinds of moves that have led to recent waves of bad publicity about claims handling practices and allegations of bid-rigging, King said.
To improve consumers attitude toward disability insurance, “weve got quite a hill to climb,” King said.
Another general session speaker, Robert Bates, president of Benefit Partners, Omaha, Neb., a unit of Jefferson Pilot Corp., Greensboro, N.C., agreed on the need for disability insurers to do more than accept their current modest profits.
At Benefit Partners, “weve concluded that the sales environment is difficult and that that is permanent,” Bates said.
Once employers get used to shifting responsibility for paying for disability insurance to employees, theyre unlikely to take that responsibility back, and some scenarios suggest that current low interest rates, which hurt earnings on disability insurers investment portfolios, could last for a long time, Bates said.
Some of the keys to prospering in the current climate include pursuing either a high-end strategy or a mass production strategy, rather than staying in the middle and hiring enthusiastic, skilled employees who will care enough to do things right the first time, Bates said.