Opportunity Knocks

As 2005 draws to a close it marks the end of the second tumultuous year for the industry. After the multiple hurricanes of 2004, everyone was hoping 2005 would be calmer, but we ended up having an even more catastrophic 2005.

As if the hurricanes that hit during the 2005 “season” weren’t enough, two hurricanes formed in late November and early December, after the hurricane season had supposedly ended. Epsilon became a hurricane after the season officially ended, and although it did not threaten land, the 14th hurricane of the year seemed to be reminding everyone to prepare now because 2006 could bring another tumultuous and unpredictable hurricane season.

Hurricane experts at the National Hurricane Center in Miami and at Colorado University predict this is only the beginning of a LONG trend of rough weather, so the best action as we go into 2006 is to hope for the best and be prepared for the worst.

It was almost as if those last few hurricanes were issuing a forewarning to agents and their customers to upgrade their wind and flood policies now to prepare for 2006.

While the industry faced its trials and tribulations in 2005, they provided motivation and business opportunities in 2006, during which on-the-ball agents can promote the need for full coverage for wind and flood, and improved building codes.

Due to what happened in 2005, customers are now very concerned about making sure they have adequate coverage on both their homes and businesses and are primed to make sure they are fully insured for whatever 2006 might bring.

Homeowners that had previously ignored their policies, or even went without insurance are now in the market for a policy; and those with policies are ready to increase their wind coverage and buy flood insurance.

The sale is made, all you have to do is contact those policyholders, urge them to come in and take a look at their policy and add more coverage for what is very likely to be another busy hurricane season in 2006.

In 2006, local independent agents need to support efforts by state and national trade associations to push for two pieces of federal legislation: one, to continue the Terrorism Risk Insurance Act, and two, to establish a National Hurricane Catastrophe Fund. Both pieces of legislation are aimed at bailing out the insurance industry in the aftermath of acts of terrorism and future possible natural disasters, including hurricanes and earthquakes, and both are essential to maintaining the solvency of the industry in times of catastrophe.

The first thing the industry needs to do is to settle its 2004 and 2005 claims as soon as possible, and at the same time launch a public relations effort to improve its image with the public. A lot of the bad news coverage in 2004 and 2005 involved large carriers and captive agents, so independent agents can use this fact as leverage to emphasize to consumers that if they deal with smaller, independent agents, they will receive more personal assistance and guidance about how to protect their property in case another catastrophe occurs.