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Hands-Free Distractions, Google Coming and Going in Insurance, Insurance Myths

Posted By Thom Young (Full first name: Thomas Clifford John), March 1, 2016
Well, here I am blowing past my own production deadlines once again. To shatter the misconception out there that I’m retired, the truth is that I’m often very busy managing many different projects for both my business and my involvement in our industry. True, some days are filled with long walks on the beach, but others are filled with trying to get a couple thousand legible and entertaining words onto a document or preparing a critical review of the educational standards by which we approve people for different license levels in our business. When those objectives overlap, often the beach wins!

The half dozen responses on the last issue were heartening to receive. I guess some sensed that I was questioning my commitment to continuing this project. Fear not, I still enjoy the work, although sometimes it’s easier to accomplish than others. I usually clip your responses and save them in a newsletter topic file that is constantly undergoing revision. I’m often asked where I get the ideas for the things I ramble on about. These emails are a great source. They often stimulate further dialogue on the issue. I receive 40 to 60 emails every day. Some come from RSS feeds that I have set up to monitor the media reports on our business and its issues and some come from readers like you who want my ideas on some topic. All direct inquiries get a direct response . . . eventually. I also read many industry journals that keep me up to date on issues. Beyond those sources, I interact with many of you at different functions and events and make notes of our discussions. So far, one issue or another always seems to get legs. When I run out of ideas, you’ll be the first to know.

For the record though, I’d like to acknowledge and thank those who’ve written me. Your kind words are the best compensation for the work I do on this project!

Think Hands-Free Means Safer Driving? Think Again

The other day, I was having a rather animated discussion with one of my automobiles. Yes, you read that correctly; I was arguing with my car. This vehicle is equipped with the most advanced voice-recognition technology and interpersonal interface available in the automobile world today which, in my view, is saying that it is programmed to frustrate. It returns every turn of phrase I make and every verbal direction with a question that is irrelevant to what I am trying to accomplish. When this inanity leaves me without a civil response, it responds to profanity with “Pardon, please rephrase the question.” Then it adds to my frustration by ignoring any attempt to override the voice feature by manual input. In short, I’m not getting along very well with this car. My other car has a similar feature and the relationship there isn’t much better.

The real point of this amusing anecdote is that I’m experiencing these frustrations with a device that’s supposed to make my use of it easier all the while I’m hurtling down a busy freeway at 105 kilometres per hour or more. I’m using a hands-free device to avoid being in violation of the distracted-driving legislation but find myself more distracted than I would have been by simply picking up my phone or GPS unit and initiating the interaction manually. So much for public safety under the law.

I’ve always taken the approach that distracted-driving legislation is a necessary response to the real problem of people who won’t discipline themselves and drive properly. Granted, driving while texting, watching a movie, reading a book or newspaper, putting on makeup, or plucking eyebrows distracts from attention to the road and its conditions. However, I contend that the accidents caused by people who do these things are not caused by distracted driving so much as by poor driving. If you’re a good driver, you understand the limitations and risks involved in undertaking anything while driving, whether that be drinking coffee or answering the phone. Technology may eventually limit the ability to be stupid while driving, except, of course, if you’re arguing with your car. New innovative software and technology is coming but not soon enough in my opinion as the technology in use in automobiles is about 10 years off the current mark and woefully inadequate to the task.

For years, we’ve been encouraged to use hands-free kits for mobile phones to avoid the danger of using only one hand on the wheel, but that practice may also be risky. A new study from the University of Utah has found that drivers take up to 27 seconds to regain full attention after using voice-activated commands on their phone or controlling the radio or other devices. Even systems that are deemed better at understanding and processing voice commands distract drivers for up to 15 seconds. Of the three main virtual assistants, Google Now was found to be the most intuitive and slightly less distracting than iPhone’s Siri and Microsoft’s Cortana. Some people are able to manage these distractions better than others through avoidance and practice, others not so much.

The argument on electronically distracted driving will never really end until the technology eliminates the discussion by mitigating the dangers in the activity. For the insurance business, the answers are in a review of the numbers. Arizona has no distracted driving legislation for using a telephone or other electronic device, but it maintains comparable loss ratios to other jurisdictions. It also has some of the lowest automobile insurance rates in the U.S. and doesn’t seem be in any crisis . . . yet.

Don’t get me wrong. If you’re weaving all over the highway putting on your makeup or texting, the Arizona Highway Patrol has the legislative authority to cite you for driving incorrectly. You just won’t get charged for having a telephone up to your ear.

Google Is Coming, Google Is Coming, . . . Google Is Going?

Several months ago, much ado arose about the possibility of Google entering our Canadian market and introducing price comparison links for automobile insurance. You may be interested to note that Google has globally abandoned its price comparison efforts. I guess it was too complicated to be profitable. Rumors continue to swirl that Google’s parent company, Alphabet, may make inroads on the life side by buying AIG’s operations, but most of the people I know in the life insurance part of the business claim that it’s just wishful thinking on the part of the sales and distribution network that would like to see some stability in ownership of AIG that would add confidence to their operations. Who knows, but insurance, particularly property insurance, remains a complicated relationship-based commodity. Those who try to operate outside of that model quickly find themselves at odds with their customers when the service issues arise.

Insurance Myths and Misunderstandings

When you finish your presentation to your clients and see them to the door, do you believe you’ve really made that connection described as the meeting of the minds on the main issues? Are you mostly convinced that the customers have a good understanding of the coverage you’ve arranged, the reason you put it together that way, and the manner in which it will work for them if they sustain a loss? The Insure.com survey says that, for the vast majority of clients, the process is lost to them. It’s a good exercise for insurance professionals to review this survey so that they can focus on the confused points when discussing them with clients.

A survey of 2,000 adults asking whether eight insurance-related statements were true or false revealed some interesting insights as to just what your client doesn’t know about insurance.

The Insure.com survey, which all the questions asked were false, found the most common sources of misinformation extended from insurance for houses and red cars.

For instance, 52 per cent of respondents were confused about how to properly insure a house with many of them believing a house should be insured for its market value when in fact it should be insured on the basis of reconstruction costs.

Depending on location if individuals are insuring on the basis of market value they could be significantly under-insuring or over-insuring their homes.

Below are the myths, the realities and gender breakdown of those who believe the myths are true.

Myth 1: I should buy insurance coverage for my house based on its real estate market value.

  • 52 per cent think it's true (45 per cent women, 55 per cent men).
    Reality: Buy coverage based on a home’s cost to reconstruct (materials and labour).

Myth 2: Red cars cost more to insure because they get pulled over for speeding more.

  •  46 per cent think it's true (52 per cent women, 48 per cent men).
    Reality: Car colour doesn't affect insurance rates.

Myth 3: If I cause a crash with extensive damages to others, my auto insurance company can cancel me immediately.

  • 44 per cent think it's true (50 per cent women, 50 per cent men).
    Reality: If an insurer wants to drop a customer due to claims, it generally has to wait until the policy period is up.

Myth 4: Small cars are the cheapest to insure.

  • 40 per cent think it's true (42 per cent women, 58 per cent men).
    Reality: Small and mid-size SUVs and minivans are generally the cheapest to insure. Small cars are not, often because they're chosen by more inexperienced drivers who tend to make claims, and because passengers incur more expensive injury claims.

Myth 5: Comprehensive auto insurance covers everything and anything.

  • 32 per cent think it's true (41 per cent women, 59 per cent men).
    Reality: Comprehensive coverage is tragically misnamed. It covers only narrow portions of possible problems, including car theft, storm damage, animal collisions and vandalism.

Myth 6: Thieves prefer to steal new cars.

  • 29 per cent think it's true (42 per cent women, 58 per cent men).
    Reality: It's more lucrative to steal old cars and sell them for parts.

Myth 7: If my friend borrows my car and crashes it, their insurance will pay for damage.

  • 25 per cent think it's true (48 per cent women, 52 per cent men).
    Reality: You and your insurance are on the hook when someone else drives your car.

Myth 8: Out-of-province speeding tickets can't follow you home.

  • 13 per cent think it's true (34 per cent women, 66 per cent men).
    Reality: Oh yes they can.
(Insurance Business)

Keep those email comments coming. I really do appreciate the feedback.

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.

 

Tags:  AIG  Alphabet  distracted driving  Google  hands-free technology  mobile phones  voice recognition  Young's Stuff subscription 

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Flood Coverage Confusion, Demise of the Broker, Driverless Cars, AIC Online License Application

Posted By Thom Young, October 7, 2015
Well, the frost is certainly on the pumpkin in Southern Alberta. As a rather large flock of Canada geese heading directly south flew right over my place, the last one looked back at me as if to ask “What are you waiting for?”  Our fall departure for the southern climes has been delayed since our usual date coincides with the birthday of our middle grandchild. We’re not allowed to be away until after that. Besides, I’ve still got much to get done here this fall, so my Canadian perspective on things remains pure at the moment.

Flood Coverage Confusion

In addition to the usual number of interesting things to talk about at the couple of industry gatherings I’ve attended in the past few weeks, “flood” coverage and its limitations seems to have generated quite a bit of confusion. Many people are concerned about the new limitations on sewer backup endorsements that insurance companies are slipping into customer renewals. The implications for E&O exposure on the broker side are staggering. Clients may think they have coverage but don’t if the proximate cause is “overland water.” If a nearby creek over flowed its banks 72 hours before or after the sewer backup, then the proximate cause is “overland water.” In the past, many of us wondered why sewer backup would respond when the proximate cause was flood, an uninsured peril. Questions of this nature used to be answered with a blank stare, but now an actual wording limits the cover. Do clients still have good coverage? Try explaining the coverage and all the limits and exclusions when, as a broker, you’re not sure about the benefits yourself. The real kick on this will come with the next major flood event, which could be next year or not for five. The interpretation and, more importantly, limitations and exclusions of these coverages will not be firmly established until we meet up with a catastrophic loss. I worry about my customers and the way these changes impact my responsibilities to them.

Advice on the “overland water” coverage provided by various companies is even more difficult. The only wording I’ve been able to secure is the one from Aviva. I’m told that The Co-operators has one on the market and that Wawanesa and Intact are soon to enter into the competitive fray, but I’ve no idea how one product compares with another. Explaining the differences must be very confusing for a personal-lines CSR. A jaded person might suggest that the new coverage isn’t sufficient enough to move forward with a competitive response in any great urgency. We are back to the original conundrum with flood coverage. The coverage needs to provide adequate distribution of risk and sufficient premium to deal with claims. These are interesting times for insurance brokers and even more confusing for the buying public. Oh well, who needs brokers? I’m sure an internet link will eventually provide all the correct answers.

The Demise of the Broker

Once again the industry press is predicting that insurance sales intermediaries (the fancy legal term for sales people) are on the road to redundancy. According to those who claim that you can find online information to purchase just about anything without any assistance, sales people are irrelevant, an unnecessary distraction, and perhaps an annoyance. Online information sites are becoming better, they claim, and giving intelligent choices with proper information prompts to allow the consumer to purchase increasingly complicated things without the need for a company representative. These statements are all true but, and it’s a big BUT, one of the most important parts of arranging a contract that promises to do something in the future is the meeting of minds when the deal is struck. When only one mind is in play, the value of the contract is uncertain because of potential misinterpretations. The legality of the contract may be suspect as well.

Look, I’m not one of those anti-tech people. I’m all for using any available distribution method to get our products and services out to the public, but at the end of the process a real person must negotiate the interests of all parties to the transaction to ensure that their real needs are met and the legal process of the contract is respected. I support the notion that the value added of a properly trained insurance adviser will continue to be an important part of the distribution process for all insurance products. Any suppliers (insurance companies) that fail to understand the support they get from such an individual risks their business success. All of the technical simplifiers, online applications and quotes, information algorithms, coverage prompts, and flashy digital pictures used by the insurance companies serve only to drive to the finished transaction between two people, the insured and the broker/agent. The manner of this meeting could be changed by technology, but the importance of it and the value to all parties won’t be.

Speaking of Human Redundancy, What about Driverless Cars?

As the technology continues to advance in this field, we are very close to the tipping point where these vehicles become a reality in the norm. No longer just a strange thing, they will be reliable and cheap enough to become a common sight in many jurisdictions. Getting to this stage won’t be easy. Many hurdles will need to be jumped before the legislation becomes uniform enough to operate these vehicles in different jurisdictions. Further, the reliability of these vehicles in operation will need much demonstration, documentation, and proof. Who is going to insure these vehicles? Who is the insured? Current legislation in Alberta would likely see the vehicle insured in the facility market. The insured would be the owner of the vehicle as per the statute wording of the SPF 1, which defines who is insured. The owner would include the driver whether that be a computer with AI capability or your brother-in-law who borrowed the vehicle while visiting town. The driver will need to be more properly defined, but such definition is not an insurmountable obstacle as the usual operator (normally the owner) would be produced for the application record. In my view, the functional manner in which that person operates the vehicle or delegates its operation would be irrelevant (I repeat, in my view—legal disclaimers abound—this is my opinion). Definition of the driver may have some grey areas that may challenge the regulators, but let’s hope they’re looking at it now and have some kind of contingency in place to deal with it when it happens. Our Alberta regulatory response to changes in our business has tended to follow the leaders instead of making good changes for our market by being the leaders (again, IMHO)!

If anyone thinks we’re talking about something way off future, think again. On last report, 48 vehicles are being operated in a California Google study. These vehicles operate in a highly dense urban environment and function extremely well all on their own, with no human intervention in the completion of their assignments. Yes, some minor accidents have involved these vehicles, but none of them can be defined as at fault—so long as you don’t use the other drivers’ distraction at a driverless vehicle as an excuse. The tests incurred some minor injuries in accidents but, again, they were due to the manual operation of the vehicle by technicians. No reports have been made of any traffic violations in the operation of these vehicles. While only four states have made provisions for autonomous vehicle operation, their use will doubtless soon be expanded to new jurisdictions in short order.

The concept of a self-driving automobile lets the mind wander into some interesting possibilities. For example, in a Top Broker editorial, Jeff Pearce discusses flying cars.

Certainly, driverless cars have a huge number of benefits. All of the advantages of having a chauffeur come to mind.

That $26 a day you pay in parking won’t be much of an issue. Just send your vehicle away to wait for you to tell it to come pick you up. Where you send it might be an issue, but I’m sure you could program around that hitch.

Auto theft would become an issue of the past. Imagine trying to steal a car that’s driving you to the police station, emitting an alarm, and has already sent the police a picture it has taken of the crook trying to steal it. Following that logic, your vehicle can become part of your home security system, keeping an eye on things around the house and reporting suspicious activity to you.

What about the kids needing to get to the rink or to dance? No more juggling schedules or negotiating with other parents to get them there and back—just send the car (or the other parent’s car).

Studies claim that the average person who lives and works in a high density urban environment spends as much as four months of their adult life looking for a parking place. Imagine how many more clients you could see if your car just dropped you off and came back to get you when you were done. Your productivity would increase substantially.

The technology has huge implications for the insurance industry, most of them very positive. Loss ratios on automobile insurance are composed substantially by administration and adjudication costs. Imagine the elimination of arguments regarding fault by the ability to review 360° digital recordings of the accident scene prior to the accident, during the accident, and after the accident? Much less discussion will be needed to determine who did what and who should have done what. The mind boggles. In some insurance markets, recording technology is already making a difference with the mandatory use of GoPro technology in commercial automobiles. We’re moving that way here too as the price of this technology declines. The price won’t be an issue when it comes built into your next automobile.

The mind can wander into the future. We can embrace new technology and work with it, or not. Based on my own musings here, the positives far outweigh the drawbacks. We certainly won’t be talking about distracted driving anymore, and underage drivers will be in a different class than they are now. The future is ours!

New Technical Frontiers

Speaking on the issue of technology advancement ….

As one of your representatives on the General Insurance Council, I’ve been working to resolve an amendment to the cumbersome regulations surrounding the DR’s role in recommending an individual for a license. As it now stands, only the DR is able to sign the application to sponsor an individual for a license. The DR is not able to delegate this authority to any other individual in the office. While this duty likely isn’t much of a burden for those operating a smaller shop with only one office and a few employees, the larger the brokerage, the more cumbersome this requirement becomes. New hires in branch offices are often stuck in an unproductive limbo waiting for the paperwork to get completed to give them the proper authority to act as an agent. If the DR is away on holidays or sick leave, further unnecessary delays can occur. In the logical flow of things, particularly in a multiple-office brokerage, the branch or office managers are responsible for the all functions of their location. They recruit, hire, and train new staff and are entrusted with all the duties of a self-directed senior manager except the submission to the regulator to transfer or change the license of one their employees. The DR in head office needs to sign the paperwork physically. I’ve maintained for years that this requirement is inefficient, impractical, and unnecessary. I know many other DRs share my perspective.

Recently, the AIC sent out an email advising of new online provisions for Levels 1, 2, and Probationary New License Applications. If you have not done so already, I strongly suggest that you familiarize yourself with the contents. Transfers and Level 3 General applications are still being handled in the old manner, but I’m told these procedures will also be updated. DRs can now delegate supervision of these online application preparations. DRs still need to endorse the submission to the AIC, but, now that it’s online, DRs can review and digitally endorse the transaction from wherever they are. This provision should provide greater efficiency and speed up the process.

I wonder what the take up is and will be on this processing ability and if it will in fact reduce the amount of paperwork. I will be asking questions about the new process at the upcoming GIC meeting and encourage your feedback on this topic. While I’m supportive of these changes, I still feel the process can be adjusted to provide for the complete delegation of the DR’s authority within larger organizations. I can’t seem to get the point across that the delegation of authority doesn’t negate the responsibility. Please let me know what you think.

In Closing

It’s hard to remain focused and unbiased given the political climate at the moment. It’s hard to be complacent with so many issues before us and so many different points of view! Still, as I voice my opinions in this column, I want simply to remind everyone to exercise the right to express your opinion at the ballot box. I cannot stress enough that this ability is your ultimate right to self-determination. Your vote can help change the things that are bad in the world and make a difference for everything that needs to be supported. This right has been fought for through many generations. The equality demonstrated by the line ups at the voting booths is one not shared by many other people in our world. Tyrants and brutal cultural influences that mute the voices of the people don’t belong in a modern society. Many young people in our new technological society don’t see the need to use this franchise or don’t believe their actions make any difference. They see the “trending” perspective instantly on issues and can’t understand how slow the process of a functioning democracy is to change. That slow process becomes even slower when people don’t vote. Politicians won’t think about to your concerns if they know that listening to your problems won’t get them a vote. Make a difference and get involved. Get out and vote. If you don’t care enough to get out and vote, you can’t later complain about what the government is doing!

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.

Tags:  Alberta Insurance Council  Aviva  Aviva overland flood policy  broker channel  competition  customer service  DR authority  driverless cars  Google  GoPro  Intact  online insurance  overland flood insurance  sewer backup insurance  The Co-operators  Wawanesa 

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World Happiness, No Falling Sky on Broker Distribution Channel, Nepal Relief

Posted By Thom Young, May 19, 2015
Updated: April 28, 2015

World Happiness Report

Canadians are apparently the 5th happiest people in the world. You wouldn’t know it watching the news lately. The recently released "World Happiness Report" has rewarded us Canadians with a rather good standing in ranking our approach to life and the satisfaction that we receive from it. These kinds of “studies” and expert reports are always amusing to me, particularly when determining the source and the funding of the work that goes into “research” on such a topic. These reports and discussions, as near as I can tell, originate from the United Nations. As these things often go, a discussion may have started between a couple of bureaucrats about how happy a place our planet is and then an application was made to obtain funding to look further into the problem. Now, perhaps I’m raining on the parade here thinking about all the troubles in our world, but the United Nations could probably better use its resources to find a solution to things like getting clean drinking water to all the people who live in our world or producing a plan to promote pluralistic harmony between people shooting at each other. Still, they were given funding for measuring the temperature of happiness. Of course, the interesting talking point in these important announcements is where different countries sit in the ranking. In order to spare you the tedious task of mulling through the 176-page report referenced in the link above, I’ve listed the top 30 countries ranked by happiness below:
  1. Switzerland (7.587)
  2. Iceland (7.561)
  3. Denmark (7.527)
  4. Norway (7.522)
  5. Canada (7.427)
  6. Finland (7.406)
  7. Netherlands (7.378)
  8. Sweden (7.364)
  9. New Zealand (7.286)
  10. Australia (7.284)
  11. Israel (7.278)
  12. Costa Rica (7.226)
  13. Austria (7.200)
  14. Mexico (7.187)
  15. United States (7.119)
  16. Brazil (6.983)
  17. Luxembourg (6.946)
  18. Ireland (6.940)
  19. Belgium (6.937)
  20. United Arab Emirates (6.901)
  21. United Kingdom (6.867)
  22. Oman (6.853)
  23. Venezuela (6.810)
  24. Singapore (6.798)
  25. Panama (6.786)
  26. Germany (6.75)
  27. Chile (6.670)
  28. Qatar (6.611)
  29. France (6.575)
  30. Argentina (6.574)
While I was originally going to list only the top 10, I decided to expand that number to 30 to include a fair representation of European countries in the review. I have been fortunate to have been in 17 of the countries referenced and could give a firsthand opinion on the accuracy of the research for those. In that regard, I don’t have much argument with the results of this study. The conclusions as to the reasons why the rankings came out the way they did are for much further discussion.

One can clearly see the correlation between the standards of living and the rankings, but a few anomalies appear in the mix. Certainly, the inference of cultural differences doesn’t leap out from the report. For the most part, those who live in a country with a high standard of living and a fair political system seem to be winning the contest to be happy. You may find a different answer in your review. An interesting read. I, like most of you, already knew that Canada is one of the best places on the planet to live, and that fact makes me very happy!

The Sky Is Falling, the Sky Is Falling

insurance umbrellaFrom Walmart to Google, everyone seems to want into the General insurance business. The best method of distribution continues to be up for much debate, and our industry press likes to stir the pot with this popular topic. The headlines often begin with a dire prediction that the independent broker network is under attack again, and our imminent demise is predicted because some new and improved method of distribution will gobble up our market share. Now, far be it from me to give the impression that there are no threats to your market share in this competitive environment. We deal with the realities of it each time we quote a new piece of business or service our existing clients. Still, most of us seem to win our share of new business and hold onto our existing clients.

No doubt, this isn’t the case for everyone—not everyone should do well in a competitive market. A well-run insurance brokerage will always be responding to competitive pressures to correct failures and reward successes. Production reports are reviewed at least monthly and comparisons are done at least quarterly. Trends are identified quickly and a market response made to correct deficiencies. This is the norm in any service business, from the corner grocery to the multinational distributor. If you’re not taking care of your business in this manner, then you are vulnerable to the next competitor who calls your customers, and you won’t know you’re not taking care of business until it’s too late to fix the problem. Often people who fail in this manner are quick to announce to the world that outside influences overtook their business unfairly. The reality is more apparent than that.

Over the years, I’ve watched many good producers make a very good living in our business. When you review how they accomplished that, it usually boils down to customer service backed by good processing systems. These producers are the ones who are in tune with their marketplace and are usually the first to identify a trend in the market that poses a threat to their business. The entry of a new player undercutting the market in rate or underwriting silliness puts pressure on your market share and makes retention of your clients difficult. Fortunately, the rules apply to these new players too. A couple of decades ago, when we were constantly being visited by new competitors such CIBC, the Bank of Nova Scotia, and Canada Trust, we saw them “cherry picking” the best customers with rate and coverage enhancements that couldn’t be matched by our markets. Many brokers were very alarmed about the business they were losing, and producers were suffering badly against this “unfair” competition. Still, the rules of the marketplace applied to these new entrants, and the discipline of competitive factors came to play on them very quickly. No doubt, the banking executives holding their insurance divisions to account for failing to obtain a sustaining market share while losing money with the product had a lot to do with these companies either leaving the marketplace entirely or increasing their rates and refining their product to match the norms in the marketplace. I know for a fact that the claims service and customer service provided by these entities had a lot to do with their failure to advance in the marketplace. I actually recall a high-value client who we had lost to the Canada Trust program telling me that the $300 Canada Trust saved him on his home insurance didn’t amount to any savings when he factored in the nonsense he had to go through just getting hold of the adjuster assigned to his claim. Every time he phoned, he went through the call centre dance and ended up at the beginning of the story with a new person. Competition works, people. When the service you’re providing fails to meet the needs of your customers, they won’t be your customers for long.

You should remember the number one rule:

If we don’t look after our customers properly, someone else will!


You have my permission to copy and paste that phrase onto a full-sized piece of paper, print it out, and put on all your CSR’s desks.

So Google is coming? Well, who cares? I will do a better job than Google of looking after my customers, and I know you can too! The broker distribution network is in good hands, and the solutions we provide for our customers are better than any direct writing influence. You just need to remind your customers continually of that truth. Contact them at renewal, stay on top of the coverages and the rates with the companies you represent, and give your clients the best choices for them. The first of those best choices is always you!

Asia Once Again Dealing with Huge Natural Disaster

On April 25th, the people of Nepal had their world turned upside down. One of the largest earthquakes in living memory shook the mountains and valleys of this small impoverished country and its neighbour Tibet. The very urban city of Katmandu had suffered a similar earthquake in the 1934, but then it was simply a small village with few structures built of any significance. The damage then, while significant, has no comparison to this current event. As in many third-world countries, the urban development has been rapid and without engineering discipline. Building codes and the logic of civic engineering intermesh with ancient customs so that many of the rules we’ve become accustomed to are bypassed and overlooked. When the earth shakes, the buildings fall down in total destruction, taking many of the residents with them.

Initial estimates of several thousand dead seemed very optimistic to those who have studied natural disasters. While the tally at this point of writing is approximately 5000, the recovery effort has only just begun. With little in the way of heavy equipment to clear away the tons of rubble, the search for survivors is now fruitless. Doubtless, the number of fatalities will soar into the tens of thousands. The small villages of several hundred or a few thousand in the steep valleys have been isolated by avalanches and, while at this juncture the news is focusing on what’s happening in Katmandu, others report that many of these communities are not just isolated but also entombed by the rock that has fallen from the mountains. Surely, this event will be on record as one of this century’s largest natural disasters.

Earthquakes can happen anywhere and are about as predictable as rain. Even the best forecasters can declare the certainty of the event but cannot provide details as to when and with what severity. While many experts will forecast probabilities, without certainty, little attention is paid to them by anyone. Nothing except the strange behaviour of animals gives any forewarning of an earthquake. Even the strange behaviour of animals gives little advance warning that can be used to initiate any action to mitigate the effects of this natural event.

The earthquake in Nepal occurred along fault lines in the earth where two tectonic plates are grinding away against each other at the rate of some 5 cm per year. This physical action over millions of years has produced the world’s highest mountains, and the tremendous pressures produced by this action are often released in sudden cataclysmic earthquakes. The fierce movement of the hard rock produces the most damaging results of any earthquakes and brings with it the largest loss of life. In such an area, you would think that buildings would be constructed to reduce the risk, but they are not. The technology exists and is known as can be evidenced by the ancient temples and palaces that are still standing after centuries of earthquake movement.

We need to do what we can to help the hundreds of thousands of people who have been displaced by this event. In the global village, the idea of brokers helping the community expands geographically. Our federal government has again initiated the matching program—matching our personal funds with government funds to help those in need. If you can spare a dollar or two, it will double in benefit. Details about the program can be found in the Nepal Earthquake Relief Fund webpage. By the time you read this column, only a few days will be left to get your money into this plan. Many companies also match employee donations to worthy charities. Our social and civic responsibility is to help where we can.

As we continue to follow the events in Nepal, we should be reminded again that natural disasters can occur anywhere at any time. Recently, a large earthquake occurred off our west coastline near Haida Gwaii, hitting a sparsely populated area without many high-rises to worry about, but it was still damaging and frightening. The Haida Gwaii earthquake was similar to that in Nepal where hard rock realigns itself in rapid violent movement, not like the slow undulating kind of earth movement usual to the Southwestern U.S. quakes. Still, either can be devastating depending on several factors. The numbers given to the event are difficult to understand as a factor 6 can be as damaging as an 8 depending on the geology of the epicenter. No matter what size, the event is terrifying to those experiencing it. The largest North American earthquake recorded occurred in 1811 at New Madrid, Missouri. Estimating the size is difficult, but the record shows that shock waves traveled through the earth raising the ground 10 to 20 metres as they emanated from the epicentre. The earth readjusted to the extent that the Mississippi River actually ran backward against itself for several days before finding a new course. Destruction from such an event today would see present-day St. Louis reduced to nothing but rubble and the loss of life unimaginable. Here in Calgary, a seismic fault runs diagonally northwest from the south east part of the city to just south of Cochrane. You can see the fault’s strata while driving on Highway 22 and then to the west on Highway 1. One can only speculate when the last realignment of this fault line took place, but certainly its results are evident in the geology. Will it move again?

We have a kit in our vehicles that gives us a 48-hour fighting chance in the event of an emergency. Are you prepared? I heard an interview with a resident of the Queen Charlotte Islands where he spoke of his ready bag by the door. I haven’t got to that point yet, but maybe I should.

In Closing

Time commitments of conventions and holidays have me writing this piece several weeks before it is due to be distributed. I apologize if the flow of the discussion isn’t as timely and topical with regard to current events as it usually is. I’ll get back on track on the next issue, I promise!

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.

Tags:  broker channel  customer service  Google  Nepal Relief  Walmart  World Happiness Report 

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