This has been an interesting week. I learned a great deal and that's always a good thing, except when you learn that your industry is still woefully behind the times. A serious snafu in policy issuance has got my goat this week.
In the early part of the 2000's we attempted to change the way that client information was delivered to insurers by centralizing it in one location that could be accessed by all: insurers, clients and brokers. Our technology worked, but alas we were 8 years too soon and the tech bubble burst...the beat goes on.
Eight years later there are a handful of insurers that have some solid policy systems that are helping to bring one of the most important but often overlooked services of our business into the present., but they are few and far between. What is it you ask? ACCURACY in issuing the policy and making sure all of the terms of the binder are actually on the policy.
Yes folks, the insurance industry still has people manually typing endorsements. It takes months to create a new policy, especially if you have negotiated manuscript terms. When you get the policy you better have your outside or in-house counsel check it...since it will be wrong. Why will it be wrong? Insurers have not invested in systems that allow for a collaborative platform for creating the policy at the point of negotiation. You have the equivalent of a third grade game of telephone...at the end the story is always different. This is an extremely dangerous game for you and your client. Dust off your E&O policy.
Let's hope the insurers get their act together soon before they get passed by for more efficient risk transfer mechanisms. Well that's my beef for today...I've gotta run...I'm going out to create a captive so that we are in control of terms, conditions, pricing and policy issuance for our clients. I guarantee it will be accurate and come from a platform that allows everyone to see the policy before it gets issued. We'll run circles around the competition.
Cheers.
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About the Author
- Richard A. Maloy, Jr, CIC CRM
- Mr. Maloy is the fifth generation of the family to lead Maloy Risk Services, which was founded in 1872 by his great, great grandfather Joseph Maloy. Based in Princeton and NYC, Mr. Maloy runs one of the oldest continually family operated insurance agencies in the country. Mr. Maloy retooled the agency in 1995 to focus on niche industry sectors providing risk management and insurance placement services to emerging growth companies in the Technology, Life Science, Venture Capital, and Hedge Fund industries. In 2004, Mr. Maloy created TriPro Managers, an insurance wholesale brokerage operation to augment Maloy Risk Services retail brokerage operations. TriPro Managers assists retail brokers in the placement of specialty professional liability coverage for the Technology, Life Science, Venture Capital and Hedge Fund industries. Mr. Maloy is a Certified Insurance Counselor, Certified Risk Manager and serves on the Board of Directors of the New Jersey Technology Council and is a past Alumni Advisory Board member of Wake Forest University. Mr. Maloy, is a member of Terrier Tri, a triathlon club in New York City. Mr. Maloy holds a BA from Wake Forest University.
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