To Test Drive or Not to Test Drive
Posted by Robert Phelan on Fri, Jan 29, 2010 @ 07:49 AM
First of all, what do I mean by a Test Drive. Test Drive what? Test Drive the Risk Advisor's service program and the team that will deliver it. Depending on how many of my posts you've read, it might be unclear what I mean by Risk Advisor. Since my company is the first Risk Advisory firm dedicated to the construction industry, I will explain.
There are over 30,000 property/casualty insurance agencies in the U.S. The people who work in these companies are defined by the BLS (Bureau of Labor Statistics) as follows:
Property and casualty insurance agents sell policies that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and casualty insurance can also cover injured workers' compensation, product liability claims, or medical malpractice claims.
The operative words in that definition are, "sell policies". Insurance companies produce/manufacture polices and their agents sell them. That's all they do. There is a very small % of progressive agents (less than 1%) who provide a wide array of services to their clients. I don't know of any that provide free services before they sell some insurance.
A Risk Advisor provides insurance (25% of their role) but their primary functions are to:
1) Design and execute Risk Reduction PlansTM to reduce your Total Cost of Risk (TCOR)
2) Make you more attractive than all of your peers in your industry/niche to the insurance marketplace
So what you will Test Drive is the Risk Advisor team's ability to design and execute a Risk Reduction PlanTM. And you do this for FREE. In our model there is no cost for the test drive. What that Test Drive will consist of, and how long it will run, will be determined by mutual agreement.
What makes this so sacrilegious to the insurance industry is that valuable services are being provided by the Risk Advisor for FREE. You will rarely see this business model from anyone other than a Risk Advisor for the following reasons:
1) Small agents don't have the professional staff or the services to Test Drive
2) Larger agents/brokers are publicly-owned, bank-owned, private-equity-owned or just plain big insurance agencies without any distinctive services. With those guys you pay to play.
At this point you are probably saying to yourself, "How is a Risk Advisor able to do anything of value for free?" There is an easy answer to that. Our relationships are long-lived. We feel confident enough in what we do that we're willing to work for free until you recognize how different we are from insurance agents. This might take a week or it might take a year. We'll invest our time and resources in your success to earn the privilege of being your Risk Advisor.
In my next post, I'll tell a great story about how a Risk Advisor made a difference in the future of one of its clients.