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Quick Liquidity Ratio
The ratio is quick liquid assets divided by net liabilities added to ceded reinsurance balances payable. Quick assets, in the event of an emergency can be immediately converted into cash, and are defined: the sum of cash, unaffiliated short-term investments, unaffiliated bonds maturing within a year, government bonds maturing within five years, and 80% of unaffiliated common stocks.
Insurance Industry News from ProgramBusiness.com
Value of Specialization“A Jack of all trades is just a blunderer with versatility.”
Loren Estleman, Master Executioner
New anthropological research suggests one reason man has succeeded over other animals is that man learned to specialize. Other research into Third World poverty shows that those populations cannot escape poverty partially because the population does not specialize. In one of the most famous economic books ever written, the Wealth of Nations written in 1776 by Adam Smith, Mr. Smith provides a proof of how even when a country can produce two agricultural products more efficiently and profitably than any other country, it will only maximize its profit when it grows the one grain at which it is absolutely best. __The need to specialize is growing for insurance agencies because the complexity of the market is growing. For example, I find very few P&C producers who truly know enough about Benefits products to sell health insurance competently. They have not studied the laws, the options, the issues, nor the coverages.
Even within P&C, the difference between how a producer really skilled in writing a trucking account versus one that does not is often night and day. The same is true for marine accounts, medical malpractice, product liability, professional liability, and large construction, to name a few. Even selling high-end homeowners correctly is beyond the ability of many producers who do not regularly write expensive homes.
Accentuating this need to specialize is the decreased quality of carrier underwriting knowledge. More and more agents need to actually understand what they are selling. They cannot depend, as many did in the past, on underwriters leading them in the right direction or even explaining coverages. Agents that miss the full and powerful implications of this subtle change risk losing sales and incurring major E&O claims. Specialization is a must.
One reason program business can be profitable is because of the specialized forms and knowledge. Specialization creates credibility and credibility is essential if agents are to separate themselves from their competition, and it is even more essential if agents hope to minimize price importance in this very soft market.
Every producer can develop their own talents, their own specializations. To continue to be a jack of all trades and master of none in this increasingly complex world is a recipe for failure. What areas will you specialize in? What special talents will you bring to your clients? Remember, anyone can sell insurance including cartoon characters, geckos, and cavemen.
For information about the products and services offered by Chris Burand, visit his website at www.burand-associates.com.
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