Happy Friday!
Thanks for taking the risk on this newsletter, I’m grateful you’re here, let me know your thoughts.
To start this off right, we are Rose Mark Risk and the person, not AI, behind the keyboard is Mark. After kicking the tires on this idea for over a year, we realized the worst that could happen is we fail at this one. At which point, I ask for your feedback, and we try again!
Warning!
If you are a grammar or spelling guru, you are going to be sorely disappointed and may spontaneously combust. Continue at your own risk…..
For any of you who do not know me personally, I operate in the world of insurance. No one’s favorite subject. There are a massive amount of insurance newsletters, written by some of the most intelligent folks I have ever met. They cover everything from basic terminology and coverage, to complex analysis like ones that Matteo provides in Insurtech Facts & Figures , or Shefi in Coverager.
The purpose here, our purpose, is to provide a definition and experience of defining risk through a different lens; the end consumer.
Over the years, I have noticed that what we, the insurance nerds of the world, refer to almost everything as risk and perils, and confuse almost all readers and bystanders involved. As the insurance folks skip along with secret code, it became extremely apparent that risk and perils do not equal what our clients, and end consumer, deem as a risk nor a peril, or even a concern.
How can that be??! We put it in the 400 page document?!
As I sat with clients and prospects, as well as shadowed other insurance professionals, most of the frustration and conflict, scratch that, all of the frustration and conflict took place during each and every conversation over a common theme; defining what a risk actually was, why the buyer should pay the cost with no benefit, and how it would impact the bottom line or cause any damage.
That push back, immediately laid the challenge for the insurance rep to protectthe buyer, as well as impress them with their knowledge of insurance policy and risk management practices.
In reality, what happens is the insurance professional beats the client/prospect over the head with explanations and definitions to explain how the peril created a gap and that gap created a risk of a possible uncovered claim if said peril were to actually happen.
The look on both sides during this exchange looks similar to the below image.
After observing the boxing match of the insurance professional, aiming to defeat and overcome the push back and lack of understanding of the buyer on what was and was not a possible claim, became almost comical.
Even if the insurance agent or carrier was right, the buyer, aka all of us when we are consuming our insurance, did not see the connection from peril to policy, to money leaving their pocket.
So, who’s right?
If you, as the buyer, don’t see the value of the coverage, or how a claim could happen. Or even if a claim did happen you were not worried about the possibility of damage, then you fully understand your definition of risk. If that is the case, then when measuring it against the possible exposure according to your insurance professional, you accept the possibility of loss or scenario they outlined. You are in the right.
The insurance professional in this scenario is trying to provide education on what gaps or exposures exist. Whether or not the examples used were relevant to the specific buyer we will never know. What we do know is that if the gaps were there and didexist, and the buyer would have understood their potential catastrophic loss with different examples, then what we have is a failure to communicate and the buyer potentially holding the bag. The Insurance Professional is right.
Not a trick question, just a master insurance trick.
As we all know, our world is Risky, and “there are 3 sides to every story; your side, my side and the truth” (Robert Evans)
Before you get ahead of me, this is not a sly sales pitch to peddle insurance policies. We gotta have the same definition of risk to reach the end of this newsletter. According to Merriam-Webster Inc. dictionary, “risk” is defined as:
- possibility of loss or injury
- someone or something that creates or suggests a hazard
- the chance that an investment (such as a stock or commodity) will lose value
Now that we are on the same page, what’s the point?
The world is not getting any less complicated. Which means, the risks and the measurements involved will get harder to conceptualize and connect to you.
10-15 years ago who would have thought that you would be in the middle of buying a house, and Billy Bob, in a basement somewhere in his underwear, could “spoof” an email from your title company and provide you with fake wiring instructions, tricking you into sending your $35,000 down payment for your closing Billy Bob’s truck fund. The world is getting risky.
For every scenario I can give, like the example of the insurance rep beating the buyer over the head like a walking pamphlet of definitions, or a phishing/cyber attack. I know there are an abundant amount of examples of real success with risks that paid off, and real failuresof those risks that may have been in a blind spot that caused a life lesson.
Talk Risky To Me means, share your wisdom and share your story.
The goal of this newsletter is to talk with people like youand share that perspective of risk.
Whether you take your companies last $5000 dollars to the casino and win in order to keep the company alive, like Fred Smith, the founder of Federal Express.Or you decided to form business partnership and had a total failure.
Or, perhaps you have a great example of trying to manage risk by purchasing insurance and had an experience you would like to share so that other buyers know how to be better consumers.