Miracle on Thirty-forms Street

By Chris Amrhein, AAI

Dear sir:

My supervisor says there is no such thing as insurance anymore; it's all just financial services and cash flow. I think he's wrong. Will you please tell me if there is really such a thing as insurance?

Sincerely,
Virginia

Well, Virginia, you've asked an interesting question. And at the right time of year, too! There are a lot of people who agree with your supervisor. It does seem lately that everywhere you go, all the talk is about captives, financial instruments, banks, alternative-market mechanisms, the Internet and cash-flow underwriting. It's almost as if insurance either has become a bad word or has just gone away. Some may even wonder if it was ever here at all, or if it was just a word made up by some long-lost marketing person.

Much as an earlier Virginia asked about Santa Claus, you're wondering if there is still something to believe in, some magical thing known as insurance that actually exists and makes people's lives a bit brighter.

Virginia, I believe there is.

It may have been buried within all the fine print and legalisms. It may have gotten snarled in all the financial mergers and consolidations. It may have slipped between the cracks of the banking and alternative-market issues. I don't think it went away; I think many of us just quit looking for it.

We have become too cynical, Virginia. Forgive us. We think it's more important to argue over the commas in a form than to see the true meaning of insurance. We get caught up in fighting for our point of view and forget why any of it matters. To paraphrase a famous philosopher, we've fallen into the trap of thinking, "I know exclusions, therefore I am." As my mother used to say, "We are a triumph of motion over meaning." In other words, Virginia, we can no longer see the forest for the trees.

Some may blame it on attorneys, but that would not be fair. We have done it to ourselves, and for that grievous error I am deeply sorry. Please don't think badly of your supervisor. Perhaps I have contributed to his or her thinking with these very articles.

How so, you ask?

By talking about the words and not the meanings. By discussing the forms and not the results. By focusing on the individual jigsaw pieces and ignoring the picture on the box. By forgetting the miracle.

Not the miracle, which is what Christmas is all about. But what Ben Feldman, the legendary life insurance salesman, called insurance: "the miracle of pen and ink."

Oh, I know many in our world are suppressing a cynical grin or even dismissing me with a "yeah, right." Some may say, "He was talking about life insurance!" Don't listen to them, Virginia. They don't really mean it. Just like your supervisor, they've forgotten or just become so caught up in the endless and often trivial details that they've lost sight of the miracle. And the miracle is no less real in property and liability insurance than in life coverage.

And it's still there, Virginia.

It's there when we look at replacement-cost coverage in a homeowners policy and realize that we're giving a hurricane-ravaged family not just a new building, but a new home.

It's there when we look at a commercial-liability claim and realize we're not just dealing with attorneys; we're protecting a business while helping an injured party to heal.

It's there when we handle a workers compensation claim and realize we're not just calculating lost wages; we're putting food on an injured worker's table.

It's there when we settle an automobile liability claim and realize we're not just paying a lot of money to a grievously injured mother; we're making it possible for her kids to go to college if she can no longer earn the money herself.

It's there when we pay a settlement to someone accidentally injured by an insured and realize we're not only helping the injured person recover; we're comforting our insured who is grieving over having caused the accident.

It's there when nothing happens at all, but our insured sleeps better at night because we have given him or her that much less to worry about from the vagaries of nature and chance.

It's there when we realize that a homeowner paying $1,000 a year for a homeowners policy on a $100,000 house will take 100 years to pay in the coverage limit -- and that's only Coverage A! To break even on a $300,000 liability claim under the same policy, the carrier will have to collect premiums for another three centuries! Heaven forbid there also should be a loss-of-use claim! It's there when we see a politician circling over a disaster area promising government money, and we realize that those funds will be a drop in the bucket compared with what insurance companies will pay to rebuild that community.

It's there when an insured pays $300 for a personal-umbrella policy and realizes his carrier just opened a bank account in the insured's name and deposited $1 million that can be tapped into whenever a covered liability claim arises -- even if that's only an hour later!

People who do not see these truths as miracles need to reset their cynic meters. They have been working too hard for too long. I carry a card that says, "Miracles still happen to those who believe in them." Without insurance, our world would be a darker, more dangerous place. In fact, insurance is so crucial to our lives that if it didn't exist, we'd need to invent it.

I'm very glad you wrote, Virginia. Thanks to you, I'm reminded how great the industry I've chosen as my own truly is, and how much better off we are for having it. Yes, Virginia, there is insurance. I hope this indisputable fact brings you some happiness this Christmas season, because that would make two of us.

Dec. 1998 issue of Agent and Broker