Paid Up Definition
Premiums have been paid on a Life insurance policy that has not matured.
I must confess to being a World War II junkie. I just cant get enough of the books, pictures, and old movie reels. Do any of you remember the old black and white movies of Benito Mussolini, the Italian dictator, standing on the balcony and ranting at the crowd? His hands were waving, his face flushed, and his arms were moving at the speed of a striking viper. You could just imagine the fiery rhetoric that was being delivered. Well, it is time for me to briefly cast aside my usual mild mannered personality and deliver the “Mussolini From the Balcony Speech.”
Business Insurance Maryland We received a tremendous response to our recent year-end survey. Thank you for your participation and input. We will share the results of the survey with you next week. Overall, the survey provided us with some very encouraging trends. For example, most of you are doing more business through the Brokerage Selection Process and through Broker of Record Letters. Virtually all of you understand that you dont need to have the cheapest price if you can demonstrate the lowest cost. This confirms that you truly understand the importance of the Ekern TCOR (Total Cost of Risk) Methodology. Now here it comes…
Insurance Baltimore MD WE ARE STILL MISSING THE KEY POINT!!!
Life Insurance Baltimore The survey asked which component of a clients Total Cost of Risk is the most important. The vast majority of our readers said Risk Financing. Wrong Answer!!! The four major components of the Ekern TCOR Methodology are as follows: Risk financing, direct loss costs, indirect loss costs, and administrative costs. Risk financing (insurance costs) is the least important piece! Here is why:
Industry experts estimate that approximately 80% of a clients costs are outside the traditional risk financing portion. When we focus on the risk financing component, we are dealing with only 20% of the issues and costs (see our previous Briefing entitled, “Chasing the Right Rabbit”). The clients themselves have told us that they consider the risk financing component (i.e. price) to be the most important in only 17% of the cases. You have very little control over the outcome of the risk financing cost. It is almost entirely in the hands of the underwriters and carriers. When you make the risk financing costs the most important piece, you are focusing on the commodity. Consultative Brokers who understand the huge cost of indirect losses are better able to quantify their services and demonstrate an ongoing value. Without this knowledge, many of us will become victims of the softening marketplace. When we discuss the indirect costs of loss with a client or prospect, we can focus on their business model. We can talk about their balance sheet and demonstrate how we can affect it. Therefore, we become their consultant! As the marketplace continues to shift towards reduced pricing and increased appetites, it will be critical for all of us to understand these concepts. Failure to learn and practice the Ekern TCOR Methodology and Consultative Brokerage Techniques will lead to a death spiral like the one that fueled the soft market frenzy of the 90s. You may recall this was brought about when brokers were chasing the lowest premiums and reducing insurance to a commodity.
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There, I got that out of my system. Mussolini can now climb down from the balcony. However, throughout the course of this year we will continue to write about how to differentiate ourselves, serve our clients, and prosper in a softening marketplace by using Consultative Brokerage and the Ekern TCOR Methodology. If you keep reading, we will keep writing!
florida commercial insurance For more information about the services provided by C. R. Ekern & Company, visit their web site at http://www.crekern.com.
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