It’s tempting to think that the economic downturn is like the weather: everybody’s talking about it, but nobody’s been able to change it.
I don’t agree. While I’ve never seen anything like this recession during my career, I believe we in the insurance industry have a unique opportunity during this economic crisis. It’s a good time to assess what’s working and to confirm the value that we as professionals (and our organizations) provide in the marketplace.
If we do, we’ll get better as an industry and as professionals, and our organizations also will improve. Our customers and the entire economy will be better off because of it.
Let me explain, and you’ll see how reassessing can generate greater opportunity.
First, a peek back at history. Up until the late 1980s, insurance carriers tried to be comprehensive providers of a wide range of products to a wide range of customers. It was common for carriers to have proprietary distribution systems that sold company-only products. Customers were serviced by an in-house team using home-grown administrative and technology systems.
But then (driven primarily by rating agencies), life/health insurance carriers were forced to reassess the “all things to all people” business model. The corporate soul searching began in earnest. Carriers began to specialize in product lines. Distribution channels sought independent and interdependent relationships with product providers. Service providers started to offer specialized capabilities in processing business.
Along with industry consolidation, this trend gave rise to specialists who “picked their genius.” That continues to be true today in product development, underwriting, distribution, and customer service.
Let’s look at what’s happening now. I predict that the pace of specialization will accelerate. The recessionary climate that began in December 2007 and the startling summer 2008 meltdowns in credit and consumer confidence will push our industry further along in this trend.
Cost pressures, flattening revenues, and investment issues are all impinging on the insurance industry’s customers. We need to make sure that we’re focused, whether we’re producers, underwriters, marketing professionals, sales executives, or service people. When our customers – businesses and consumers – are streamlining their operations and cost structures, it’s time to re-sell the value of insurance products and services. If we don’t, they’ll drop our products and services.
Being focused on what you do best also means realizing what you don’t. And that’s where the opportunity is, and it’s two-fold:
1) You can find specialists in distribution, products, and service that complement your own specialty and expertise.
2) You can offer your specialty to others in the industry.
Either way, when you create win-win relationships with strategic alliances partners, all will thrive: specialist, partner, and customer.
Our industry will grow in the future through the virtues of interdependent, strategic relationships. More than ever, it’s better together. Make sure you don’t miss the boat.
Anne Marie Faria is executive vice president – chief marketing and sales officer of HealthPlan Services, which provides distribution, enrollment, billing and collection, claims administration, and risk management services for health insurers and other carriers. She is 2009 president of the Inter-Company Marketing Group, a non-profit trade association that fosters networking and strategic alliances in the life/health and benefits sectors of the insurance industry.