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to To The Point list To the Point/October/2005 • Hurricane loses covered. Every industry deserves public scrutiny and that includes the insurance industry. Over the past year, the spotlight has focused on several insurance practices and particularly those of several very large insurance companies. Clearly, we all are more cautious and thoughtful than we were in the recent past. Those of us who take our profession seriously want everyone involved with insurance to do the right thing. There is another side of insurance that’s worth noting. “Hurricane Katrina looks certain to be one of the largest insurance losses in history,” wrote Judy Greenwald in Business Insurance on September 5 of this year. We know that she was on target. It is the largest insurance loss in history. Then came Hurricane Rita creating new losses. Yet, there has been no question about the insurance industry’s ability to pay the claims. It moved instantly to get thousands of claims adjusters to the devastated areas. By any measure, the U.S. has an extraordinary property and casualty insurance system. More than one insurance executive fails to see insurance rates rising because of Katrina and Rita, although some feel there may be increases in the territories affected, particularly if there are more incidents. One reason why insurance companies were not caught in a situation where many of them found themselves with Hurricane Andrew in Florida in 1992 is that that they now are much better at managing risk. Even with insurance company insolvencies at that time, claims were still paid. • Watch out for camera phones. Four out of five cell phones sold in the U.S. by 2006 will feature a built-in camera. Some of the newest phones have video capabilities. Camera-equipped phones present a number of risks, according to Brian P. Paul, an attorney at the Chicago law firm of Michael Best & Friedrich L.L.P. He points out the threat to trade secrets, client lists, product formulas and marketing strategies. There is also the possibility of the invasion of employee privacy that may lead to harassment claims. Some feel the camera phone’s greatest threat is in the area of harassment, particularly with its ability to email photos and post them to a web site. According to a 2004 study by the Society for Human Resource Management, 77% of companies did not currently have a camera phone policy, although 14% of those indicated they would within six months. That compares to 40% of companies with a cell phone policy in place and an additional 12% intending to have one within six months. Developing an appropriate camera phone policy and making it a part of the company’s employee manual is essential. • The sales conundrum. It’s the most common question heard in every company. There are many variations, but here’s a common one: “I just don’t understand why we couldn’t close that sale. All the buying signals were there and it certainly seemed that they liked it. Besides, they paid close attention to everything we said and seemed to agree with our analysis and recommendations.” Such reports are often quite accurate and not a self-serving attempt to rationalize away a lost sale. Anyone attending the sales meeting would come to the same conclusion: “This is a slam-dunk.” But it isn’t. Why? Here are a couple of possibilities for what seems to be contrary behavior—when they seem sold but don’t buy: • Enthusiasm wanes as the prospect considers what is involved in making a change, such as additional work. • The fear of making a mistake becomes overwhelming. While the current vendor’s solution may have inadequacies, a new one is untested. “What if there are problems and I get blamed for selecting the new company?” • The company representative you met with doesn’t make the decisions. This is often the case in smaller, privately held businesses. A way around this common problem is to prospect at the top, as well as down the management ladder. • The due diligence dilemma. While it seems the sale is certain, it doesn’t happen. Quite often, the interviewing and proposal process is a way to cover a decision that’s already made. The recommendation to the president or vice president reads, “After interviewing four suppliers and receiving their proposals, it’s my recommendation to remain with our current vendor…” The mistake most salespeople make is deleting such companies from their prospect database. Don’t do it. Stay in touch. Needs, circumstances, and situations all change. You want to be there when they do. Sincerely,  Tom Helbach Back to To The Point list |
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