The December edition of Best’s Review contained an article that caught our attention: ”FAIR Plan Policies Nearly Double in Five Years”. It caught our attention for two reasons. First, we write FAIR Plans. Second, there seems to be some churning in the FAIR Plan vendor market. It’s no wonder. It’s not an easy market to serve. But that’s not to say it can’t be served … and served well.

According to the article:

Insurers of homeowners and even commercial property risks have had a tough time, due to [a lack of] positive underwriting results in recent years. Some of those factors, obviously, have been the greater frequency and severity of extreme weather events and weather events of different types, be they primary perils or the perils referred to as secondary perils like severe convective storms and wildfires, etc. They’ve also been challenged by inflationary pressures that have pushed average claim costs upward.

Yes. Managing increasing demand is a challenge; i.e., adapting to the growing demand for coverage while ensuring the long-term sustainability and effectiveness of the programs. Specifically, FAIR Plans have to:

• Balance the need to provide coverage to high-risk prospects’ with the need to maintain solvency and not disrupt the insurance market’s supply-demand equilibrium.
• Manage the complexity and variability of FAIR Plans across different states, with each plan having its own structure and regulations.

In a post update on March 20th of this year, the NAIC echoed some of these challenges:

FAIR plans are typically more expensive and have limited protection than insurance obtained in the regular market … FAIR Plan insurance coverage varies by state … Coverage for personal belongings and additional structures on the property are usually only offered as optional policy add-ons. Generally, loss of use and personal liability coverages aren’t offered via FAIR plans … Some states have a single state-run plan, while others have multiple plans operated by different insurance companies … Additionally, some states have residual market mechanisms, such as assigned risk plans, which serve a similar purpose to FAIR plans … the mission of FAIR plans broadened as these plans are increasingly viewed as tools for promoting economic development in coastal areas and providing low priced insurance.

But that doesn’t mean those challenges can’t be met and managed.

No Quick Fix

There’s no magic bullet for challenges as big and numerous as the ones outlined above. And we don’t claim to have one. But we’ve become the vendor of choice for FAIR Plans for a number of reasons:

1. We’ve been working with them for more than a decade.
2. The Finys Suite has a standard configuration for most FAIR Plans.
3. The Finys Suite is used to process more than 750 LOB combinations,
4. The Finys Suite contains pre-built, LOB-specific templates for ISO, MSO, and AAIS lines.

Will that solve everything? No. Will it make it easier for FAIR Plans to write business? Yes.

It’ll also make it easier for FAIR Plans to find a vendor who’s in it for the long haul.

Reliability is underrated.

Six years ago, we wrote a post called, “Keep the Change”. At the end of that post, we wrote this:

Since we have to keep the change, we may as well manage it effectively.

In the time that’s elapsed, we’ve come to realize two things: (1) We were correct. (2) We didn’t know how correct we were.

Today, of course, we’re likely to hear change referred to as transformation. Digital transformation. Financial transformation. Operational transformation. “We’re going to transform the enterprise!”

Are we really?

Transformation seems too abrupt. It feels like zero to sixty or a snap of the fingers. That’s not at all the kind of change we think about or that our software enables. Rather, it’s more gradual and deliberate. It’s more incremental and better managed. And it involves knowledge, learning, and what used to be called process re-engineering. Maybe it still is, for all we know.

Approach is Everything

Instead of transformation or process re-engineering, we’re more likely to call it change management. By that, we’re referring to a service that comes with our software. More specifically, we mean — especially when transitioning from fragmented legacy systems to an integrated suite — some processes are likely to change as they become more automated and efficient.

By the same token, people are likely to change in different ways. Some people may resist or have difficulty reconciling themselves to new systems and new processes. On the other hand, other people, who may have been considered marginal performers with the old system, may become stars with a new system and altered processes. And if we accept that best practices are static and determined in hindsight (they are) we can also tout that best practices, modified by experience, can be better practices. That creates the opportunity for people to suggest what’s possible, to build collaborative relationships, and to continuously improve requirements-identifying processes.

In other words, we view change management as a crucial aspect of of delivering our software. It’s a systematic approach to supporting people through their transitions to new processes with new tools.

Yes. We have to keep the change. We also have to manage it to keep it accessible and assimilable to everyone who experiences it. We have to ensure every link in the chain is secure.

It’s all part of the service.

Since we concluded our Innovation Advisory Board (IAB) meetings early last month, since the IAB comprises users of our software, and since (like our software) we intend to keep improving our IAB meetings, we were doing a little reading on the topic. We found a post from April of 2022, published by Forbes — “Why Customer User Groups Are Integral To The Success Of Today’s Technology Organizations” — that proved to be instructive and affirming. It said this, in part:

User groups exist to facilitate knowledge-sharing and communication among individuals who use the same technology, so providing a frictionless forum to share and receive information is critical … Many technology companies decide to form user groups when they have motivated and engaged customers who see the benefit of participating in a community around the company’s particular products or platforms. As groups grow, it’s the relationships — built among members and the vendor — that are the basis of user groups’ value.

We agree with all those points. And we’d add, in our experience, the relationships we build with our customers yield loyalty, which is a significant part of the IAB’s value to us.

There’s More

In addition to the points raised in the Forbes post, we find the IAB yields these things, as well:

• Expertise and Guidance: Since we’re all working in and sharing knowledge of the insurance domain, the input we get from our customers provides the insights we need to ensure our products and services evolve most beneficially.
• Stakeholder Engagement: Beyond our users, the IAB allows us to include other stakeholders, including vendors of other systems and data sources with which we integrate to provide the functionality and the information our customers need to do their jobs most efficiently.
• Improved Governance: Advisory boards can serve — our IAB provides — checkpoints for ensuring our accountability, transparency, and responsible decision-making.
• Effective Leadership: Our IAB also provides leadership by giving us feedback on practice standards and helping to keep us in compliance with ethical codes, as well as regulatory mandates.
• Resource Accessibility: Since we can’t know everything, our Advisory Board helps us identify and make us of existing vendors, resources, expertise, and networks, keeping us from reinventing wheels, reducing costs, and increasing efficiency.

What’s Next?

We’ve already received feedback from the attendees of this year’s IAB meetings. We’re considering all of it and will include it in the development of next years IAB meetings. And we’ll continue to ensure the Finys Suite contains the features our customers want and need. Otherwise, they won’t use it.

That’s how we keep the use in our user group.

We asked JoAnna Bennett and Mark O’Brien from O’Brien Communications Group to attend our annual Innovation Advisory Board Meeting. Following that experience, Mark wrote this post.

Back in my corporate days, I had the distinct sense in every meeting I attended that they were conducted for the sole purpose of talking about writing plans for things we were going to do. No such plans ever got written. None of those things ever got done. But people seemed pretty content with the routine. And no one was ever held accountable for the fact that nothing ever got done. As curious as I was about that, I was even more curious about how people seemed so content to be unproductive and about why there was no accountability.

In contrast, at the Finys Innovation Advisory Board (IAB) meeting last week, there was no talk about planning. There were only confirmations of things that had been done and updates about things that would be done. There was no discernible hierarchy. Rather, there were contributions from every level of the organization, recognition for those contributions, and 40 or more attendees from Finys’s various client companies, happy that all those things were being done on their behalf. I felt amazed and naïve.

I felt amazed at the genuine interaction and sincere customer satisfaction I was witnessing. I felt naïve because I’d never imagined how simple creating that kind of environment could be. And the secret to how it’s done is that there’s no secret to how it’s done.

Common Sense

Experiences like ours at the IAB indicate how inscrutably uncommon common sense has become.

At the IAB, I learned you don’t create a culture by talking about it. I learned culture and teamwork are like honesty and integrity. You don’t manifest those things by talking about them, either. You manifest them by being them, by demonstrating them, by making sure every interaction — employees with employees and employees with customers — is driven by them. I learned you find the right people for the culture you’re creating by asking the right questions in the interview process. Rather than asking questions like, “Where do you see yourself in five years?” you ask questions like, “How would you like to contribute to this organization and help us grow over the next five years?”

Once you’ve brought the right people on board, you give them the latitude to contribute and to collaborate. You let them make mistakes, correct them, and learn from them. And you give them support, recognition, and opportunities to advance. If you do that, you prove Richard Branson  was correct when he said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

The Proof in the Pudding

If you doubt the truth of Branson’s statement, all you have to do is sit in a room full of happy clients and the people who are happy to take care of them. From what I witnessed, I don’t believe there is one person at Finys for whom working there is just a job. You can’t fake commitment, dedication, and knowledge. And you can’t earn trust from and enthusiastic collaboration with your clients by faking anything.

There’s a clear distinction to be made between doing things right and doing right things. When a client, as one did, says, “My Finys team is like family,” you can be certain you’re doing right things.

JoAnna and I take our hats off to the entire Finys team. And we thank them for including us in their IAB.

It was a welcome contrast to much of what we’ve seen in our working lives.