Risk & Business

A few years ago Congress approved the formation of the Federal Insurance Office (FIO). This was in response to the 2008 meltdown of AIG and numerous other banks and money institutions.  For the first couple of years the office has not been in the insurance headlines very much. Lately however, it seems that the FIO is in every insurance publication I read. The office is becoming very active. Currently they are probing the need for Federal Government intervention into the 150 year old State regulation of insurance. Also I saw headline of the FIO  looking into the affordability of auto insurance. These actions are a precursor, in my opinion, of a full Federal regulatory takeover of the insurance sector. It may take awhile to achieve this, but State's will have no ability to stop it. The State regulatory system has been exemplary over the years as insurance has proven to be stable and well capitalized and did not suffer the collapse that banking and S&L's experienced. However a

Commercial insurance agents and brokers, are continually trying new ways to bring value to their clients. Many offer risk management services as a value proposition. However after years of studying the science of risk management and enterprise risk management, it occurs to me that it is extremely difficult for agents to provide full risk management services on commission only.  Most of the time it is only risk management "lite". If agents and brokers really provide the needed risk services to businesses only being compensated by commission then they could not make a profit in the long term.  Don't get me wrong even risk management "lite" is a big help to business owners trying to reduce risk in their business.  However, agents and brokers need to make their clients understand that they can only do so much on what they get paid with commission.  I predict that more and more will offer greater risk management services  for  a fee in order to do a better job with