Because we tend to be the “technology people” in any insurance room, our team is often asked about the future of this historic industry, the business of insuring risk. Our team is comprised of a number of Millennials and Gen-Xers, and while we are fairly adept at things like social media, building cool technology, and witty tee-shirts, we also have a healthy respect for the foundation of commercial insurance.
At the symbolic heart of this industry is mutual insurance, as American a notion as Benjamin Franklin–who basically originated the concept in the form of fire insurance in Philadelphia in 1752. Mutual insurance companies are wholly owned by policyholders, a throwback to an era of independence and freedom. Today, in fact, Pennsylvania still has the lion’s share of mutual companies, followed by New York state and thirdly Wisconsin (EvoSure’s resident Packer fan Brett reminds you that Wisconsin also houses the only wholly shareholder-owned NFL team).
Last week, mutual insurers were given some well-deserved attention as Guy Carpenter hosted its annual Mutual Company Seminar in Chicago. While views from the TRUMP hotel’s 16th floor banquet rooms made for a stunning backdrop, emerging risk and the future of insurance were at the forefront.
The conference kicked off with a presentation by Jerry Theodorou from esteemed research institute Conning, and concluded a day later with a self-study of Millennial insurance buyers by Patrick Sullivan of Risk Management, Inc. From drones to fracking, from outdated actuarial tables to 21st century hiring best practices, hardly any stone was left unturned. EvoSure was honored to present on a subject near and dear to our heart: distribution management. But we were even more honored to listen and learn.Here are our key takeaways from the conference:
- Mutual companies surveyed by Conning reported that “Service” and “Local Presence/Brand Recognition” were more distinctive in the market than industry segment specialization or product specialization.
This caught our attention because so many mutual insurance companies are so very niche. We like the notion that treating clients well and local familiarity are highly valued by insurance purchasers. It peaked our curiosity to wonder if the same might hold true for standard market carriers, who continue to shift between industry specialization and generalist excellence models.
- Drones are terrifying; never leave your house again.
We’re kidding (kind of). Gerry Deneen of SwissRe highlighted the risks, coverage implications, and regulatory status of microdrones and while we in the EvoSure headquarters often discuss the technological advances made possible by drones, Gerry’s anecdote about high schools handing drone controls over to 17-year-olds as a means for filming football practice was a bit of a wake-up call. Privacy considerations grab a lot of headlines, lately, but Gerry’s points about the importance of solid hull coverage warrant attention. Many early adopters of drone technology are in the agricultural sector (where a number of mutual companies excel) and damage to or loss of these expensive pieces of equipment could be devastatingly costly.
- Millennial insurance buyers are mostly miserable with the insurance transaction experience.
Patrick Sullivan called attendees’ attention to the fact that 69% of Millennials surveyed initiated auto insurance transactions online or via mobile, but the happiest outcomes inevitably resulted from actually talking to an insurance agent. Over dinner, several of us engaged in a multi-generational conversation about the fact that mobile technology has led younger professionals to initiate contact via text message or email in lieu of phone calls and lunches–a point communicated strongly in Mercer’s day-one presentation on Talent Management.
This is a sea change in behaviors as far as our industry is concerned. Even in our technology-driven business at EvoSure, we prefer handshakes to hashtags; yet there is something to be said about adopting your model for the audience of the future. Perhaps Millennial insurance customers require a digital first touch before picking up the phone, and the challenge become the initial engagement (and then, back to point number one of our takeaways, a satisfying service experience from an expert provider). We did feel it worth mentioning, though, that one of the youngest participants at the conference was the very first person to send a “nice to meet you” email after the conference. Further, we each received Linkedin requests from fellow attendees before Matt was even done presenting in EvoSure’s session.
Sullivan’s slides in the closing presentation indicated that Millennials gravitate towards highly niche, highly local, highly specialty everything: farm-to-table cuisine, hipster facial hair (both “moustache wax” and “beards” made Sullivan’s list), even urban beekeeping. Everything comes full circle when you realize that mutual companies are tailor-made for the Millennial consumer. From jewelry to churches to, as one of our clients put it, “the extra fun sports risks that no one else wants,” mutual insurers cut their teeth in niche; and by all accounts from last week’s seminar, more than 263 years later, mutuals are still in style.
EvoSure specializes in matching insurance agents’ commercial risks with the right underwriters. Request your test drive today.