In a dog-eat-dog environment like today’s insurance industry, carriers and others are striving daily to gain whatever competitive advantage they can—especially in the currently negative economic environment.
Not surprisingly, many carriers turn to well-known industry analysts for advice on everything from systems upgrades to marketing to strategic direction. Ours is an industry blessed with a number of top-flight analysts who work hard at delivering actionable information and advice, and are generally successful at what they do.
This was confirmed recently by an
Not surprisingly, the survey found Celent, Forrester, Gartner, Novarica, Strategy Meets Action and Tower Group to be among the leaders in our industry. Carriers utilize these sources for competitive information, company profiles, business trends, vendor analysis, original research and strategic guidance, among other things, the research says.
In an open-ended question, however, the survey also asked insurance industry respondents “whether industry analysts notify companies of all innovations and solutions vendors in the industry, or if the information was in some way biased.”
According to i3, “The trend across the board named analysts’ reports to be biased based mostly off of ‘favoritism’ or ‘buzz.’” The survey report says one contributor stated that they “think that there are some analysts that have a tendency to favor certain vendors’ (perhaps because they spend a good deal of money on their services), implying that analysts may promote technology vendors who contract with them for consulting.”
These kinds of sticky problems are commonly found in other disciplines, such as treatment of clients by psychotherapists, counselors and the like. Having a “dual relationship”—for example giving treatment to a family member—is considered a breach of ethics, because a therapist may be more interested in manipulating that family member for his own benefit in therapy than in promoting what is best for the client. I’m afraid we sometimes have very much the same situation with our analysts.
The survey commenter rightly points out that analyst firms often have a contractual relationship with vendors and with insurers, all of whom may benefit by their services. There is really nothing wrong with this—until the analyst is called upon to make “objective” assessments of vendors (some of whom may be paying the analyst) or of an insurance market that includes other insurer clients. Where do we draw the line between what the analyst firm “knows” and what they can say?
In the world of psychotherapy, “dual relationships” (client/relative, client/friend, client/lover) are at least frowned upon and generally to be avoided. Therapists have a number of ethics boards and licensing bodies to make sure this happens, although nothing is 100% effective.
Dual relationships are not uncommon in the world of analyst consulting, and sometimes they are not harmful. The real trick is determining which relationships are potentially problematic, and then taking steps to avoid problems. Firms that evaluate vendors, for example, could start their evaluations by spelling out with which vendors they have (or had) business relationships. At least that way, the readers of the evaluations could make judgments for themselves.
As I said earlier, we have a great group of analysts in our industry, and I would be less than honest if I did not tell you that I have personal relationships with some of them. Be that as it may, however, impropriety—or even the appearance of impropriety—should be avoided.
Ara C. Trembly (
Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.
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