Our Best Hope

Insurance provides some money to pay for some things on only some bad days. If it is your primary risk management strategy, it is insufficient and inefficient.

Between policy changes, eligibility restrictions, deductible changes, sub-limits, and non-renewal postures, the availability of insurance coverage is shrinking. In the meantime, modern risks that normal people face like home renovations, domestic-employee hiring, cybercrime, electronic aggression, shared-economy use of assets, micro-livery occupations, multi-generational home occupancy, severe weather, and at-home employment are expanding. The gap between what insurance wants to do and what a family needs is growing.

Add to that a steady industry decline in attracting, training, and retaining talent that can consistently deliver a consumer experience that people are used to getting elsewhere (we still expect people to sit on hold for minutes upon minutes to get help, to wait for two days to get a return email, to have claims authority centralized to one person, to mail consumer unfriendly notifications of premiums or policy changes), it’s no wonder that I’m worried.

Will a consumer’s experience with their insurance be better tomorrow than today? It’s a fundamental question that you’d think would be a cornerstone of the industry’s strategic plan to answer. Yet companies talk today about the same streamlining and improved communications and efficiencies that they were talking about when I started 31 years ago. New techniques and new technologies, but same plan. The industry has said the same “communicate better, report faster, resolve happier” forever and how have they done, generally?

And all the while, what insurance companies want the most is your business. So they produce low-level commercials that avoid much content and they visit my office and try to grab more shelf space. But what they won’t do is re-invent. Insurance is what it is and it is not a mature approach to addressing the risks you face if it’s your sole hope. It should be a component of a plan, not THE plan. All day long I ask people why they are spending $1.30 to pay for insurance on things they could resolve themselves for $1.00, or prevent altogether for $0.50. There’s work that can be done so that you won’t need to use your insurance in the first place. Not having the bad day is always better and collectively, if the need for insurance decreases, the competitive pressure to attract you to them will increase. It’s our best hope.