Tag Archives: mike manes

The Revolution Is Coming! Be Ready

The world, the world of risk and risk in the world will be as different in 2020 as the original 13 colonies were from the U.S. as it is today.

The bad news is that Paul Revere won’t ride through your town alerting you.

So you'll have to settle for me — and I am, in fact, giving you enough warning to design your future, and not just manage toward it.

Understand: When one thing is different, it is change. When everything is different, it is chaos.

Change works for dinosaurs. Chaos doesn’t.

But chaos brings opportunity for those who are prepared, and, if you’ve survived in this industry for any length of time, you are able to adapt. Your only issue is one of willingness.

What follows are the 10 environmental factors that, in combination, are triggers of the coming Risk Revolution. These cultural changes are fissures in the foundation of the “good old days” and render vulnerable all traditional institutions and structures that have done so well for so long.

  1. Loss of innocence: When President Nixon said during the Watergate scandal, “I am not a crook,” he acknowledged the end of command and control. Raw power could no longer sustain the most powerful man in the world. As citizens, we confronted the “feet of clay” of our leaders. What Nixon did to weaken our trust in our political leaders, terrorists in airplanes on 9/11 did to our confidence. We won two world wars and are insulated and isolated from the “evil” out there by oceans on our coasts, but it is not enough. We have to accept we are vulnerable.
  2. Katrina was a “girl” but she was no lady: When Hurricane Katrina hit the Gulf Coast in 2005, it breached levees and created a Mad Max world that none were ready to face. Our institutions – federal, state and local government, the Red Cross, etc. – were supposedly built for catastrophes but failed us. Our confidence in our system of order was lost. We must rethink the world.
  3. “Hell no, we won’t go”:  war protests, burned bras, tie-dyed T-shirts, Elvis and the Beatles, hippies who protested everything except the right to protest. This was the marketplace speaking for the first time. Tomorrow, the market won't be quieted.
  4. ________ – Americans:  African-Americans, Asian-Americans, you-name-it-Americans. We're no longer a homogeneous nation. One size does not fit all. The change will accentuate the world of niches, affinity groups and “verticals” and so fragment the market that mass customization will be required, down to a niche of one. We want it “our way,” and not just in fast food.
  5. The front porch and the back fence are gone: Time and place now have little value, and “pace” is as fast as the buyer wants it to be. The question is: If Gen Y is known for a lack of empathy, how do you sell in a nonverbal world?
  6. Tennis balls and Patty Hearst: Sgt. Gill, an intelligence officer, told me in 1972 about satellites that could read the label on your tennis ball while you were playing. In 1973, Jim, another military intelligence guy discovered that, while his data mining model couldn’t help the FBI find Patty Hearst, he could find everyone in America who was just like her. In an era of satellites/drones/etc. and big data, what happens to privacy?
  7. Miss Hathaway: In the finance department of LSU, Joan always reminded me of Miss Hathaway from “The Beverly Hillbillies.” She told me decades ago, “Mike, this LexisNexis thing is going to be big.” She was talking about the Internet. She was right.
  8. From Ozzie and Harriet to Archie Bunker to the Huxtables to the Simpsons to the Modern Family and maybe to the Jetsons: The world keeps changing, and lots of people don't like that. They want to hold on to the past. Political correctness, shouts of racism and sexism, a bipolar political process, extremes, etc. all limit our willingness to hold hands and sing “Kumbaya.” We are changed forever, and so is our society and its most basic building block – the family. Deal with it.
  9. “If you have all your eggs in one basket, make sure it’s a strong basket.”: That line, from a Volvo ad, circa 1980, applies today because we are betting the economy and our world on technology . What happens if a natural disaster, a terrorist, an enemy or sun spots disables our technology for a week, a month, a year?
  10. Addictions: Addiction to the status quo is the worst. In this most serious form of dependency, we sacrifice everything to do nothing but protect our comfort zone. The insurance industry once owned the world of risk. Now we have done more than “let the camel’s nose under the tent.” We are now sleeping with the camel. When the market demanded innovation, we too often failed to provide it. Instead we gave up our responsibility and let government and others do what we didn’t want to do. Captives, alternative risk funding, HMOs, the ACA, self-insurance and the National Flood Insurance Program are all examples of decisions being made without us. That is the nature of markets. We were too slow, and something else filled the void. We still face two fundamental challenges: Our products are priced beyond the ability of many consumers to pay, and some embrace a “nanny state.”

The trends identified are not all right and they are not all wrong. They just are. What will 2020 bring your world? What will you do to prepare?

Remember the admonition from Peter Drucker, “Whom the gods wish to destroy, they send 40 years of prosperity.” The last decades have been good to us. The next decades can be, too, but only with the right amount of awareness, preparation, discipline and commitment.

George C. Scott, playing Gen. George Patton in the movie “Patton,” said: “In times of war, all other forms of human endeavor shrink to insignificance.” 

Are you ready, willing and able to fight and prevail in the coming Risk Revolution?

A Real Checklist for Real Disasters

In a fraternity, they’d call this hell week. At your agency, this is the one week each year when you deliver renewals to your four largest accounts. 

Renewals might be a misnomer this year because you are moving all of the accounts to a market that is better for you and them. Two of the accounts were being non-renewed, and you are not renewing the other two with the existing carrier. 

Its midnight, and you’ve just left your office. Miss Hathaway is still there putting the final touches on the renewal proposals. They’ll be on your desk in the a.m. as you begin this market marathon. In 48 hours, you’ll have worked your magic on 32% of your book – these most important accounts will be laid to rest for another 12 months. 

The staff thinks you’re crazy for waiting until the last minute. You’ve had these offerings in house for the past three weeks. But you think strategically. If you delivered these renewals when you received them, a ruthless competitor would have delivered a better quote a day later. Instead, you’ll be picking up deposit checks from four clients in three cities in a day and a half.

You need gas, but you need sleep more. You can fill up in the morning. Your wife and daughter are out of town, and your son is staying somewhere across town with a classmate. You can’t even remember who or where. Your wife will call in the a.m. and catch you up on the details.

You hit the bed for a few hours of rest. At 3 a.m., you’re awakened by police chatter. Your first thought is that you left the TV on in the den. As your head clears, you realize a police cruiser is driving through the neighborhood announcing an emergency evacuation. The announcement is garbled, but the message is clear – everyone is to evacuate at once. 

You throw on your clothes, grab your smart phone and iPad and head to the garage. As you open the car door you remember the gas you didn’t buy. As you approach the interstate's entrance ramp, you see chaos – total gridlock. You look west to see the sky aglow. This is near the nuclear reactor that has been the region’s source of electricity for decades. Just when you think your situation can’t get any worse, you hear explosions that remind you of the bombing raids in Vietnam. You realize the chemical and oil storage tanks in the industrial corridor north of town must be exploding – the sky is lit up like it’s noon.

The Emergency Broadcast channel’s message is clear – mandatory evacuation – everyone must be out at once. The danger zone is currently 50 miles in radius – you try to call your wife, but the cell phone signal is not adequate or jammed by too much traffic – what about your son? Your wife and daughter? Miss Hathaway? What if? What now? What next?

This is what a real disaster looks like.

As a public service, I offer this initial list of worries for you to consider in advance of a disaster. More serious problems will follow.

  1. Can you reach your wife and kids and find a place to join up with each other?
  2. What about your employees and their families – can they get out safely?
  3. What about your friends, clients and their families, and the community – what about them?
  4. What about the work on your desk? Your renewals? Miss Hathaway has been encouraging you to go paperless, but you’re old school – you still use paper files – a rolodex – a written calendar. You need your office and your desk? You couldn’t get there now if you owned a helicopter.
  5. What about your agency? These are busy weeks. How do you connect with everyone? What if you can’t get back to town for two weeks? What if there is a radiation leak – could two weeks become two months? – two years?
  6. It’s taken an hour to go two miles – you need gas. Your phone isn't working. You’ve got to pee!
  7. An agent friend in New Orleans told you the most important thing to do in a disaster requiring you to evacuate is to get a temporary office and temporary housing so your team and their families can recreate your agency wherever y’all land. How will they know where to go and what to do?  What will this cost? What if the team can’t or won’t get there?
  8. Reality grabs you – electricity failed for four hours in your office last week, and many of the staff couldn’t cope. How will they deal with a real emergency? What if they can’t? What if some quit?
  9. Wait – your four biggest accounts have coverage expiring in less than 48 hours, and they don’t even know the terms of the renewals. The carriers have to be notified. You dial your cell again only to realize there is no signal. Will a connection return?
  10. You look to the right to see your agency billboard with your tag line — “We’re at our best when your problems are at their worst!” You were so proud of that theme when you first heard it. Will this prove to be a lie displayed on a billboard? What about claims? What next? 
  11. The radio reports are now catching up with the disaster and evacuation – all motel rooms are now filled in the first 40 miles outside of the evacuation perimeter. Nearest available housing is at least 90 miles away. It’s now 5:30 a.m.
  12. Suddenly, your worst fears are realized – the governor is announcing that radiation leakage has occurred and that no civilians will be allowed back into the evacuation zone for at least 30 days and probably 60.

You start preparing a “to do list” in your brain – not for 60 days but for the next 24 hours. Is this too little too late? It’s the best you can do, but it is the wrong time to be doing it. If only you had done this sooner. 

Got the picture?

Here’s a “to do” list that might help mitigate damage by future disasters if you plan ahead:

  1. Understand that disasters (s_ _ _) happen – disaster awareness, preparation and planning can mitigate the damage for you, your family, your agency and team and your clients.
  2. Disasters are events – the planning and plan implementation are a process – a critically important process.
  3. Don’t plan in secrecy – engage your team, your clients/prospects, community, experts and carriers. This involvement may prove to be logistic and marketing genius.
  4. Don’t dictate the process – engage all in the discussion – find the best ideas.
  5. Be certain that your operations are not location- or paper-dependent – be virtual, with access from afar. The good news is that this is now doable – years ago, it wasn’t. Back up systems always.
  6. Visit with carriers to build strategies to mitigate the shared challenges all will face. What works best for the insureds, the carriers and your team? If a catastrophe doesn’t force you to evacuate, offer hospitality and kindness to the storm troopers in your communities – they need it.
  7. Create a crisis communication plan and identify who can speak for the agency – what the message is and what the media needs to hear – even if it is just signs in the windows of your office. Remember, electricity and phones may not work for days or weeks.
  8. Give clients a policy ID card (or a thumb drive with their policy info) and carrier contact information to carry in their vehicle. A policy in the safety box at an unoccupied home is of no value.
  9. Establish contingency plans with a fellow agent to facilitate their relocation to your office or your relocation to theirs in a worst-case scenario. Discuss plans to find temporary housing, phone and computer and Internet access for the families and team of the displaced agency. Remember that there will be “No Vacancy” signs quickly appearing after an evacuation.
  10. As you and your team begin recovery and claims handling – allow time to comfort (group hugs) each other and pray (there are no atheists in foxholes).  Constantly monitor your team, too, for post-traumatic stress disorder – some can handle disasters, some can’t – assign work according to cope-ability.

This is far from a complete list, but it is an adequate starter kit – the process and the engagement of others will lead you down the path you need to go – “the road less traveled.” Godspeed!