When I first announced that I’d be retiring after covering this industry since 1981, one of my colleagues quipped that “writing about Insurance for 42 years is more than anyone should be asked to endure!”

Truth be told, it’s been a blast and an honor to be part of the insurance community.

The industry has changed so much over the past four decades. But in the most fundamental (and positive) ways, it hasn’t really changed much at all. When I started at National Underwriter as a cub reporter covering the agent/broker beat, I was working on a Royal office manual typewriter with three-part crash paper, editing copy by hand, and overnighting articles to our production team in Chicago.

We’ve certainly come a long way technologically. Now, small children expertly handle iPads and smartphones at an age when my idea of high tech was an Etch-A-Sketch.

While technology has made everything faster, more efficient, and more convenient, insurance remains a people business, which is what attracted me to both journalism and this industry in the first place. I doubt that will ever change.

My first article for National Underwriter was based on a report predicting independent agents would “go the way of the milkman” by the end of the century. Yet 42 years later, while (most) milkmen are long gone, plenty of people still like to get their insurance from agents and brokers. Independent agents have managed to hold onto a significant share of the personal lines market — more than I myself expected, quite honestly. And they continue to dominate in terms of small-business insurance.

Agents and brokers have survived mainly because they keep adapting to changing times. They’ve gotten a lot bigger, for one thing, through mergers and acquisitions. And they’ve become more sophisticated, by making better use of agency technology while increasingly leveraging client and third-party data for prospecting, cross-selling and upselling.

To remain viable, however, agents need to be more than just policy peddlers and price shoppers, especially in the higher end small-business market as well as the middle market, where competition is becoming fierce thanks to consolidation in the distribution force. Most middle-market commercial insurance buyers don’t have a full-time risk manager on staff. Even if they do, they generally don’t have a large risk management staff at their disposal. They depend on agents and brokers to function as their de facto risk managers, to help them not only identify potential exposures and buy policies to cover them but also to offer loss-control support, provide business continuity advice, and manage claims.

We saw the start of this shift in approach in the early 2000s. At that time, I launched NU’s Commercial Insurance Agency of the Year award program. One who still stands out for me was 2002 winner Scott Addis, head of The Addis Group. His published profile started out something like: “How can NU name as its commercial insurance agent of the year someone who claims not to sell insurance for a living?”

Scott’s credo was to be holistic by making insurance merely one part of a more comprehensive risk management program. He went on to build an impressive following with his “Beyond Insurance” education, consulting and support network, all of which were rooted in his service-first mentality.

In 2010, after 29 years at NU, I shifted gears and became Insurance Research Leader at the Deloitte Center for Financial Services. My first published report was based on a survey asking whether small-business owners would be willing to buy insurance directly from carriers without an agent or broker to shop for them or advise them. It turned out that 50% of respondents said, “Not under any circumstances.” Those who did express at least a willingness to consider going it alone usually expected a huge (and unrealistic) discount of 25% or more.

We also ran focus groups for that study, during which small-business owners said they wanted to keep their agent so that, as one participant colorfully put it, “I have a throat to choke.” In other words, someone to hold accountable if any of their losses ended up uninsured. Another wanted what they called “sleep insurance,” so they could rest easy because someone who knows what they’re doing was looking after their exposures.

These small-business people already had a lot on their plates, so shopping for themselves seemed to offer more risks than rewards. Many worried that if they overlooked some exposure or underinsured themselves, that would be on them, with a mistake perhaps costing them their livelihood. They were more than willing to pay a reasonable commission embedded in the premium to get an insurance expert on their team. That’s a big reason why agents and brokers are still so prevalent in the market today.

I came full circle this year, as one of my final published reports at Deloitte focused on how insurers can bolster middle-market production, profitability and partnership with their distribution force. For agents and brokers, the key takeaway was that if all you have to offer is a policy and all you compete on is price, you risk being commoditized and eventually pushed aside by more full-service-oriented intermediaries and their like-minded carriers.

In other Deloitte research reports I published over the last few years, we looked at how insurers might maximize the value of data and analytics as well as how automation and AI should be changing the way policies are underwritten and claims are handled.

The problem is that many insurers are integrating all these new tech tools and data sources into legacy systems, without thinking through how this may alter the jobs of those in core departments.

Too often, automation is myopically seen as a way to improve efficiency by eliminating people. But tech transformation shouldn’t just be about reducing headcount; a vendor once rather insensitively referred to this phenomenon as “getting rid of human middleware.”

Instead, insurers and their agents should focus on how tech can free people up for higher-level work if you upskill them and reinvent their jobs. Delegate the simpler, labor-intensive work to algorithms while maintaining human contact with customers.

This is still very much a work in progress, and it’s getting even more complicated with the introduction of generative AI programs such as ChatGPT. There’s no avoiding this wave of new technologies. But that doesn’t mean tech should replace people en masse, at least not in what Deloitte refers to as “the moments that matter,” such as helping clients prevent or recover from a major loss. Too often, tech transformations are internally focused rather than taking into consideration the needs and preferences of policyholders as well as their agents and brokers.

In any case, insurers and their intermediaries need to keep adapting because there are still a lot of challenges coming down the road. Embedded coverage could significantly disrupt the distribution system, especially in auto insurance, while creating a game of musical chairs for insurers seeking ecosystem partners. Self-and-assisted-driving tech could divert big segments of personal and commercial auto insurance into product, professional, and/or cyber liability lines. Expansion of parametric insurance may render chunks of the traditional claims system obsolete.

It’s scary, but exciting at the same time. With big change comes big opportunities for reinvention and renewed purpose… Much like retirement!

Who says insurance is dull?

Parting thoughts

I am very grateful for my long, fulfilling, and yes, exciting career covering the insurance industry. Indeed, thanks to my work at National Underwriter and the Deloitte Center for Financial Services:

• I traveled the country and the world, including spending 10 of the most memorable days of my life in India working with my Deloitte research colleagues in Mumbai.
• I sat in a Broadway theater watching a demo for insurers showing off all the safety that prevent the chandelier at “Phantom of the Opera” from falling on the audience.
• For a feature story on how coverage was placed at Lloyd’s of London, I actually “sat on the box” with one syndicate underwriter on the trading floor as he assessed risks brought to him in person by various brokers. Quite the joker, he introduced me either as his psychiatrist treating him for stress caused by all the bad business he’d been writing, or said I was a journalist investigating corruption among Lloyd’s brokers like them! (You can’t have an experience like that with electronic trading!)
• I shook hands with Capt. “Sully” Sullenberger at a Lloyd’s dinner in his honor, thanking him personally for not landing on top of my NU office building in Hoboken when he ditched his plane in the Hudson River.
• At insurance conferences, I met and chatted amiably with Presidents George H.W. Bush and Gerald Ford, as well as two of my favorite TV actors — Raymond Burr of Perry Mason fame, and Captain Kirk himself, William Shatner, who talked tech as the keynote speaker at an ACORD meeting.
• I brainstormed the future of business media and made lifelong friends from around the world during a two-week symposium at Stanford University.
• I forged a decade-long bond with the brilliant, resilient actors and staff at CO/LAB, a theater group for those with developmental disabilities, as part of Deloitte’s annual Impact Day.
• But most importantly, I’ve worked with scores of brilliant, talented, and caring people over the past 42 years, many of whom have become my closest friends. I’d like to acknowledge some of them here (apologizing in advance if I leave anyone out).

At National Underwriter, I thank the current leadership of Patricia Harman, Elana Ashanti Jefferson and Rosalie Donlon, along with earlier NU editors Bill Coffin and Shawn Moynihan, for graciously allowing me to continue to publish a column here for the past 13 years after I switched careers to join Deloitte. And, of course, a big shout out to all my former colleagues when I was NU Editor in Chief, including David Katz, Rick Gilman, Susanne Sclafane, Colleen Mulcahy, Lisa Howard, Lee Gjertsen Malone, Phil Gusman, Steve Piontek, Peggy Walker, Kim Tallon, and the dear departed Tom Maher, who made life under constant deadline pressure not just bearable but fun and exciting.

For giving me a second lease on my professional life, I humbly thank all my colleagues at Deloitte’s Insurance Practice (including Rebecca Amoroso, Adam Schneider, Gary Shaw, Karl Hersch, Courtney Scanlin Nolan, and Rachel Moses), my comrades in arms at the Deloitte Center for Financial Services (including Jim Eckenrode, Val Srinivas, Patty Danielecki, Jill Gregorie, Paul Kaiser, Lisa Lauterbach, Howard Mills, Andy Mais, Urval Goradia, and Steve Fromhart), and especially my dear Insurance Research teammates (including Deloitte’s new Insurance Research Leader, Michelle Canaan, along with Namrata Sharma, Dishank Jain, Nikhil Gokhale, Prachi Ashani, Jay Shah, and Aditya Singh).

I also must thank my favorite English teacher at Brooklyn’s Abraham Lincoln High School, Mel Glenn, who steered this confused kid into journalism, then became a dear friend and helped counsel me into retirement nearly five decades later.

Last but not least, I must thank my darling wife, Cheryl, who has been with me for 42 years! I am so lucky to have begun a lifelong career in insurance and married my soul mate in the same year! Cheryl has been there with me, and for me, every step of the way, supporting and advising me, providing a sounding board for all my gripes and dreams, offering words of wisdom and encouragement, and being unabashedly my biggest fan.

Now, it’s time to go. I once heard that no one on their death bed ever wished they’d spent more time at the office. So I’m looking forward to my first full summer off from work since I was 15. But you likely haven’t heard the last of me. A writer can always write. But writers need an audience, and I heartily thank all of my loyal readers over these past four decades for hearing me out. It’s been an incredible ride!

Sam J. Friedman ([email protected]) is the former editor in chief of National Underwriter (now titled NU Property & Casualty magazine), where he served for 29 years, including a decade as an employee/owner. He recently retired after 13 years as the Insurance Research Leader at the Deloitte Center for Financial Services. Follow Sam on LinkedIn.

Any opinions expressed here are the author’s own.

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