Insurance dependency is the result of a system that was built to spread risk and cost. It’s a system that was built to make predictable profits for the insurance companies – which is why you’ve been trained to focus on the metrics that matter most for insurance company profits: rates and loss ratios.
What this means for you is a perceived lack of control over the cost of your insurance, how claims are handled, and everything in between.
Most insurance brokers are focused on renewing your insurance. Which isn’t to say that they are deliberately trying to mislead or trick you – it’s just what they’ve been trained to do: sell more insurance.
But this process does little to help you take back control and reduce your insurance dependency. The main problem is this: you’ve been conditioned to focus on how your insurance rates are changing, not how your total cost of risk is changing.
It’s time to build a risk reduction strategy. Not a renewal strategy.
Decisions about insurance coverages are important, but they are also a diversion from what you really need to focus on: building a multi-year strategy for taking ownership of risk and reducing your insurance dependency.
Deciding between Insurance Company A and Insurance Company B might save you a few bucks right now, but you’re going to be in the same situation next year, facing another unpalatable rate increase.
True business leaders focus on building a strategy that addresses the “controllable” part of their risk. They focus on addressing accidents, root causes, and more efficient ways of financing risk.
When this strategy is well crafted and well executed, then the risk financing part of the conversation becomes much easier.
Insurance brokers and insurance companies have painted a picture that choosing any option other than being fully insured is irresponsibly risky. That a security blanket comes with a price.
You could, of course, have a bad year and have to pay more.
But aren’t you paying more each year anyways? Aren’t you, in fact, going to pay for your bad performance one way or another? Aren’t you just kicking the can down the road and delaying the inevitable?
It’s time to start betting on yourself. Because there is no alternative.