The Greatest Threat to the Insurance Industry is….

A lot of my readers would think I would say the NAIC.  Others would think it is the political make up of our states and Federal Government.  How about the significant changes we have seen in weather that has brought about catastrophes never seen by the industry?  Anyone vote for rising medical costs?  How about the increased demands and expectations of the insurance consumer?

Well all these factors will have an impact on the Insurance Industry.  I personally feel that the greatest impact will be the lack of leadership within the industry itself.  In the late 60s and early 70s the industry saw a huge growth cycle in not only new policy holders but also in the number of quality people needed to service policy holders.  Most of the leaders and managers of the companies are from that era.  This also means that 30-40 percent of tenured managers are eligible for retirement or have retired in the last few years. 

The industry saw no real growth in new employees in the past 20 years and 5 years ago many companies actually laid off employees to control their costs.  Other companies laid people off because of declining policies in force and declining claim counts.  While companies maintained their bottom lines, the lack of new quality people coming into the industry, to be trained as leaders and managers, will be the main crisis the industry will face over the next 10-20 years.  Without strong and knowledgeable leaders, who will make the decisions to keep companies strong and on track?  Who will train people and pass on the years of insurance knowledge that so many of us have done in our careers?

The companies who are putting in good mentoring programs, combined with the accelerated development of people identified for senior management positions, are the companies that will continue to grow and be profitable in the years to come. 

What is your company doing?

Now I don’t really mind inexperienced people making bad claim, risk management and marketing decisions.  It has been great for the my consulting business and the trial lawyers.