Risk Insider Inaugural Address
This being my inaugural essay for Risk Insider, I wanted to keep it light but topical. So I thought, how about two subjects to avoid in cocktail banter — politics and insurance. Perfect.
Carefully putting political opinion and party affiliation aside, what if we looked at the presidential campaign like an insurance renewal? Consider how carriers, brokers and insureds would weigh in on evaluating and selecting our next President, with the candidates being the risks, carriers performing the underwriting and the insured playing the voter.
From the carriers’ perspective, they would want good underwriting data like lifestyle metrics and claims history. In the property realm, think about what each candidate would submit on their Statement of Values — homes, boats, vehicles, other physical assets.
Using apples to apples (or elephants to elephants, donkeys to donkeys, elephants to donkeys?), who would have the highest retention, the costliest premium, the most sublimits and exclusions?
What would cause a business interruption (err … distraction from serving), and for what values? In addition to personal revenue, liability underwriters might want to know number of relatives, and are they as quirky as the candidate? How susceptible are they to cause injury or harm to 3rd parties?
Those in executive management liability might want to know what is the likelihood a constituent would sue the candidate, his/her relatives or their campaign manager? Is there a propensity/history of the candidate or their colleagues to lie or steal?
Would the candidate sue the fiduciary who independently oversees their retirement portfolio while in office? Remember, this is politics!
And now the fun part — claims history. As there is no TPA for politicians, perhaps the FBI, CIA, ATT, the E! Channel or TMZ can provide “loss” runs like criminal records, text messages or past dating partners. What kind of collateral will be required?
On the brokers’ side, neutrality might be the best approach, using shuttle diplomacy between carrier and client. Maybe the broker role is to flush out the rumors, provide historical voting information and advising on premium, limit and deductible levels contained in their vast benchmark database. And given past experience, brokers (and carriers) might also be good sources for clients to secure VIP seating at local political rallies.
Insureds (voters) would have the task of reviewing the candidates based on the data assembled, analyzed by the carriers and brokers, woven into a set of proposals. I can envision a renewal quote spreadsheet comparing eligible candidates as well as against the incumbent.
Using apples to apples (or elephants to elephants, donkeys to donkeys, elephants to donkeys?), who would have the highest retention, the costliest premium, the most sublimits and exclusions? At this point the insured may ask the broker, “Why are the costs/retention so high, exclusions so numerous? Aren’t there any other choices out there?”
Previous to 2016, picking a presidential candidate had been relatively serious business, requiring review of a broad set of risks. Seems this campaign has been a mixture of business and entertainment.
Well, we in insurance traditionally enjoy business and entertainment. So, give the methodology outlined above a try to guide you through your selection process, at least for the entertainment value!
Jan Berger’s views are his own and don’t represent the views of LiveNation.