Willis Group Holdings sees an opportunity for insurers to make lemonade with the proverbial lemons the industry has been handed. In a time of financial turmoil, the insurance industry faces an unprecedented opportunity to begin selling on value—not on price, Joe Plumeri, chairman and CEO of the global insurance broker, told delegates at Insurance Day's Summit Bermuda.
Plumeri said that the need for greater transparency in business transactions that have comes as a result of the financial crisis has given the insurance industry "a perfect opportunity to showcase all that we do and the value we provide, because we will need to explain why we charge what we charge, and what it is that clients get for their money,” he said. “We are not just buying policies at the best price—we offer analysis and fight for the best possible terms. We are selling an experience, not a commodity. Now is our time to prove that insurance is more than a retail transaction, insurance is a partnership."
Listing the opportunities presented by the economic turmoil, Plumeri told the 150 delegates that, in a time of renewed calls for greater transparency, contingent commissions should be abolished once and for all as they represent "manufactured revenue and not added value."
Another area of growth that the insurance industry should be ready to capitalize on, according to Plumeri, is the new risk assessment that will be needed to accommodate new business models. "We may finally have reached the moment when true enterprise risk management is something our clients will demand,” he said. “We will need to apply the analytics and modeling sophistication that we've developed in the reinsurance sector for the retail side.”
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