Insurance and Paper Towels

An Open Letter to Everyone Writing About “Disrupters” and the Insurance “Customer Experience” and Citing “Industry Experts” and “Top Insurance Executives”

 

For the love of God, please, please, PLEASE stop comparing buying insurance to buying a consumer product on Amazon!

Case in point from an “industry expert”:

“What’s holding most insurers back from meeting the speed and performance of a customer experience leader like Amazon? In a nutshell, siloed legacy systems.”

No, siloed legacy systems are NOT why the insurance industry doesn’t meet the “customer experience” speed and performance of Amazon. The reason the insurance industry doesn’t meet the “customer experience” provided by Amazon is because WE DON’T SELL WHAT AMAZON SELLS! Amazon sells consumer products. “Insurance” is not a “product.” If you’re compelled to label it, insurance is a process, not a product.

Another case in point from a recent Reuters article that quoted Ajit Jain, Berkshire Hathaway’s “top insurance executive” as saying:

“Amazon.com can deliver something to you in four hours. If people can buy paper towels on the internet, why not insurance?”

Sorry, sir, but buying insurance is NOT the same as buying paper towels. Yes, technology can and should be used to improve the effectiveness and efficiency of the insurance process, but phone apps and “big data” are not going to make a silk purse out of a sow’s ear. (BTW, there are some great silk purse bargains on Amazon right now if you hurry, and the good news is, choosing the wrong one likely won’t bankrupt you, as can happen if you choose the wrong insurance “product.”)

Not every buying transaction can or should be reduced to an Amazon-like “1-click” purchase. If I want to buy paper towels, does Amazon need to ask me to explain what I’m going to use them for? Or who is going to use them? Or where I’m going to use them? Or…? The insurance PROCESS starts with assisting individuals, families, and organizations in identifying their many, and often unique, exposures to financial loss. That information is then used to determine what is the best combination of insurance policy forms and risk management techniques to minimize the likelihood of a serious or even catastrophic financial loss. And if there is a loss occurrence, the process continues in both a financial and emotional way.

Insurance” is not a commodity product. It’s a regulated, service-oriented process where the “product,” if you will, is a complex, detailed legal contract that is highly litigated. To compare it to paper towels or any other online consumer purchase is infantile. How many bad Amazon purchasing decisions can lead you to financial ruin?

“Technology is a tool and a means to an end, the ‘end’ being protecting individuals, families and organizations from financial catastrophe.”

Why do we listen to and enable people that lack historical perspective and clearly are fundamentally clueless about how the insurance industry works and why it works that way, who really don’t understand the overriding mission of this industry? Technology is a tool and a means to an end, the “end” being protecting individuals, families and organizations from financial catastrophe. Unless it’s the product “disrupters” and consultants are selling…then it’s the end in and of itself. Caveat emptor.

Photo by JeepersMedia 

About Bill Wilson

William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and director of the Big “I” Virtual University for over 17 years. He is the former Director of Education & Technical Affairs for the Insurors of Tennessee and, prior to that time, he was employed by Insurance Services Office, Inc. He is a graduate of the Illinois Institute of Technology with a B.S. degree in Fire Protection & Safety Engineering. Bill was a licensed insurance and surplus lines agent, and his professional affiliations have included past president of the Middle Tennessee Chapter of CPCU, member of the board of directors of the national CPCU society, PMLG of the Honorable Order of Blue Goose, International, member of the Independent Insurance Agents & Brokers of America (IIABA) National Education Committee, member of the Certified Insurance Service Representative (CISR) National Advisory Committee, member of the National Underwriter FC&S editorial board, member of the Society of Insurance Trainers and Educators (SITE) and its SITE Journal editorial committee, member of the National Writers Association, chairman of the Tennessee Insurance Commissioner’s Education Advisory Committee, member of the Middle Tennessee State University Insurance Liaison Committee, and member of the Nashville State Technical Institute’s Business Management Advisory Committee. He has served as a trainer and speaker for various organizations, including the Independent Insurance Agents & Brokers of America and 43 of its state affiliates, the CPCU Society national convention and chapter programs, the National Association of Insurance Women (NAIW), the Southern Agents Conference (SAC), the Risk & Insurance Managers Society (RIMS), the International Risk Management Institute (IRMI), and the Society of Risk Management Consultants (SRMC). Bill has conducted hundreds of technical seminars, workshops and convention presentations—from Hawaii to Maine and Alaska to Florida—as well as programs on time management, presentation and public speaking skills, seminar development, and many others. He has been the top-rated presenter at several CPCU National Conventions and his programs are always highly rated by attendees. He has presented seminars or webinars to as many as 5,000 attendees in a single session. He was the recipient of the IIABA L.P. McCord National Education Award for having the #1 ranked state insurance education program in America and has won six other national education awards, including the George M. Gottheimer Memorial Award which is presented periodically to a CPCU Society member who has made an outstanding contribution to the field of insurance education, risk management or insurance consulting and, most recently, the Jeff Yates Lifetime Achievement Award which is the IIABA’s highest honor for nonagents. Bill has researched, developed, written, and published dozens of technical articles, manuals and CDs/audio tapes, and has authored articles in business and industry trade periodicals such as Presentations magazine, American Agent & Broker magazine, Independent Agent magazine, Tennessee Insuror magazine, Tennessee Business magazine, the CPCU Journal, CPCU Interest Group newsletters, and the SITE Journal. He has been quoted as an expert in a number of mainstream publications, including Readers Digest, Kiplinger’s, and Money magazines and the Wall Street Journal, and he has been cited as an expert resource/interviewee for local television and radio media. He has also served as an expert witness in litigation. According to Nashville NBC television affiliate WSMV, “Bill Wilson is an expert when it comes to insurance.” Dr. William T. Hold, president of the Society of Certified Insurance Counselors in Austin, Texas has said that, “Bill Wilson is recognized by his peers as one of the premier insurance educators in America.” Bob Rusbuldt, CEO of the Independent Insurance Agents & Brokers of America says, “Bill Wilson is the nation’s foremost leading expert on form, coverage, and technical issues.” Bill now blogs on insurance industry issues at InsuranceCommentary.com and delivers keynote presentations in conjunction with his consulting practice. He is also working on several book projects in addition to playing lead guitar with the band The Old Dogs. His first insurance book, tentatively titled “When Words Collide: Resolving Insurance Coverage and Claims Disputes,” is scheduled for publication in late spring or summer 2018.

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