IBM Insurance:: does the industry really care what customers want? I wonder…


It’s about time I revisited an IBM report from 2008. Why? Because it would appear that NO-ONE IN A POSITION OF INFLUENCE IN INSURANCE SAW, READ, UNDERSTOOD OR ACTIONED ANYTHING THAT IT S-P-E-L-L-E-D OUT!!!

Insurance trnsparency and technologyGuys like Christian Bieck do some really interesting research work. Work that the industry would do well to pay more attention to and this report is a great example of just that: Trust, transparency and technology

How’s this for an introduction?

…what do buyers of insurance really value in insurance? …we found that THE insurance customer and THE customer value do not exist anymore, if they ever did. Insurers who take into account the varied attitudes, values and resulting actions found in today’s markets will have an edge in reaching tomorrow’s customers – and retaining them, despite ever fiercer competition. To achieve this, insurers will need to master trust, transparency and technology…

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Q. what is the difference between derivatives and reinsurance?:: A. not a lot…


At least that is the view of a man who knows a thing or two about both…Warren Buffett! Of course this quote is, by now, well known:

“In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

But this isn’t all that he had to say and, until someone convinces me otherwise, his view lends further (substantial) weight to my argument that (re)insurance institutions ARE “globally systemically important” with the potential to act as “superspreaders” as/when the next stage of the ongoing financial crisis unfolds.

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Insurance:: GIAS “Phase II”– turning threat into opportunity


I should pay Warren Buffett a royalty (not that he needs it) for excessive use of this phrase:

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“be greedy when others are fearful and fearful when others are greedy”

But few can doubt that we are paying the price for greed. Whether we are all more fearful could be debated but we are, certainly, financially, socially and environmentally  “poorer” for the experience. Hopefully, we are “wiser”!?

For obvious reasons the financial sector is fearful of what the future holds for them because of the implications of new “mechanisms” that are intended to avoid a repeat of financial meltdown. One thing for sure is that, as much of the cost of increased regulation, falling or unpredictable margins, etc. will be passed on to customers.

How hard a sell will that be for “reputationally damaged” institutions that have, knowingly, abused the trust they once enjoyed???

How much more attractive will their actions (and subsequent inaction) make, innovative propositions, from existing competitors and new entrants look? Read more of this post

FM Global "steal" the initiative whilst others dither – Insurance Insight


It is very rare to read about meaningful innovation, from an insurer, that is about anticipating and responding to policyholder needs but that is exactly what FM Global appear to have done. Well done to FMG and I sincerely hope that they reap the reward of competitive advantage, that such a rare development merits. BUT I do have my concerns.

Whilst it is not for me to question if they know what they are doing…as far as offering protection and reassurance to their customers they undoubtedly do…I wonder about the timing. Perhaps they have overcome concerns about the current turbulence in the global economy OR have decided to pursue a bold strategy right out of the Warren Buffett handbook: “be greedy when others are fearful and fearful when others are greedy”, so plan to be perfectly placed to capitalise upon the lessons that must be learnt following another credit crunch – i.e. the realisation that price is only one metric and that risk management does not = resilience management! Read more of this post

Banking: decline of mature markets – fulfilling the prophecy


Whilst Western eyes are scanning other BRIC markets and wondering what they can do to “weasel” their way out of a predicament of their own making, others (no more credible than they) are adopting a strategy popularised by Warren Buffett:

“Be fearful when others are greedy and greedy when others are fearful”

More than 20 years after Soviet tanks and soldiers pulled out of then-Czechoslovakiain Eastern Europe, Russian influence is on the rise in what was once its imperial backyard. Where guns and bullets failed, rubles are succeeding.

Local governments are selling off state assets to plug gaping budgetary holes as the global financial crisis bites. Western corporations are tightening belts and selling off some assets in the region. Stepping into the void are eager Russian businessmen, some backed by the Kremlin, as money trumps lingering suspicions from decades of Moscow-led Communism.

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