AIG Programs Division has more successful programs today than years ago, thanks in great measure to the lessons the company has learned from programs that failed.
“It’s critical to know what’s happening,” according to David Jordan, senior vice president at Lexington Insurance and division executive for AIG Programs.
Jordan shared the lessons learned from program failures and successes at the recent 2004 Target Markets Program Administrators Summit in Tempe, Arizona.
Whereas a decade ago, it would not have been surprising for as many as 25 percent of programs to either go out of business or switch to another carrier, today that lapse rate is well below 10 percent, at least at AIG, Jordan told attendees.
Jordan went back 11 years in AIG’s own experience to identify what he calls the “common denominators” in the programs that went bad or moved elsewhere. As a result, AIG has developed a much more rigorous business model that includes numerous audits of underwriting, claims, risk management—just about every facet of a program.
Jordan identified 10 themes common to lost or failed programs, touching everything from a lack of profitability and inadequate technology to poor risk management and weak strategic vision.
The flip side to failure is, of course, success. Jordan’s analysis found that the expertise and experience of a managing general agent are part of a winning formula, as is clear and honest communication between carrier and the MGA.
For more on Jordan’s views of what makes a winning – and losing—insurance program, view the interview with Jordan at https://www.insurancejournal.com/broadcasts/
Other interviews from the 2004 Target Markets Summit may also be found at www.insurancejournal.com