Predictions from 1996

In my book titled "Fourth Generation Risk Management", published in 1996, a set of predictions concerning risk management practices and the insurance industry were made based on observations at that time. Below are the predictions. Lets see how far the industry has come to fulfilling predictions of ten years ago.

1) Risk Managements will measure service responsiveness of their suppliers and publish the results nationally

2) Risk Managers will more finitely define the role of the broker/agent, and the latter's fee's will be tied to their ability to provide services that create value for the entire organization.

3) Risk Managers will no longer be willing to pay commissions for traditional transactional services.

4) Risk Managers will increasingly separate the negotiations of insurance coverage from the selection of the broker/agent. Risk Managers will decide what broker/agent has the capability to provide quality services, and then approach the insurance companies in partnership.

5) Knowledge of an organizations operational issues will become a "must be" for brokers/agents.

6) There will be less shopping of insurance and more long term negotiations

7) Insurance company executives will become more and more involved in personal relationships with their largest customers and trade groups representing the smaller or medium sized customers

8) Operational problem solving expertise will be necessary for insurance carriers and brokers/agents

9) Measurement and evaluation of claims and cost of risk will be dominated by statistical tools and metrics to enable risk managers to provide better analysis and recommendations to their company.

10) Insurance purchasing constortiums will be formed to provide access to the insurance markets for mid- sized risk on a fee basis

11) The information super highway will accelerate transformation of business processes and interactions between the risk manager and their insurance suppliers. This transformation will create further change for the insurance industry and drive down transactional cost.

Certainly the above list represents changes that should have occurred given the explosion of technology over the last ten years. The question is whether risk managers and the entire insurance industry have used technology to the customers benefit and has the customer lead the transformation.