14 Feb When the timer goes off, pay up!
We recently hosted a Junior Achievement class from Scarborough Middle School to introduce them to insurance which is primarily the business of risk transfer. BOR-ING! Well, not so boring if you are a twelve year old carrying a box filled with real money and a ticking timer that could sound-off any minute notifying your group of an accident or loss.
As groups of five navigated through different departments of our office, they passed the ticking box to one another like a hot potato. The student holding the box when the timer sounded was the insurance company. She or he had to open the box, read the claim notice (e.g. stolen Xbox, broken arm, hurricane disaster, heart attack) and then pay out to their “customer” standing to their right. By a show of hands, about 25 percent of the class had been in an accident at one time in their brief lives. They understood the random nature of such events.
As they moved from our business to personal insurance departments, then off to our employee benefits group and administrative team, they heard loud and clear that it takes all kinds of skills and interests to run a large insurance agency; accounting, underwriting, sales, human resources, loss control, marketing, advertising and training. They also learned about claim adjusters and insurance investigators.
Most of all, though, they learned how insurance works as an introduction to a very interesting and rewarding career. We didn’t try to explain how a century of contract language and court cases are the underpinning of risk transfer; that will come later in life. But we did explain the satisfaction of helping people put their lives back together from a foundation of financial security.
When I was a kid, my dad, an independent insurance agent, explained that insurance was legalized gambling. In the simplest terms, he said, his customers bought insurance because they were betting something bad would happen to them. The insurance company, on the other hand, was betting it wouldn’t happen so often that they would lose money.
That’s why we focus so much attention on loss prevention – taking the simple steps necessary to prevent a loss and all the hassle, hardship and costs it creates. Insurance, particularly health insurance, is not a matter of “if” but more a matter of “when” a claim will be made.
The insurance industry is often the whipping boy for those who want something from an insurance policy that’s not part of the contract. The fact is that the industry routinely pays millions upon millions of dollars for covered claims. It is a complicated business based on explicit language and requires a skilled hand to ensure the right coverage is in place.
For example, the kids visited “Go-Go Donuts” in our business department and listened as the “baker” and our agent talked about what could go wrong and how to protect the business from failure with the right loss control, coverage and policy limits in place.
At another stop, our Employee Benefits Group gave them each enough “Clark-bucks” to pay for health insurance premiums. They then enrolled some of the kids in a “health plan.” Some of the kids who chose to go without insurance, however, went broke when the cost of health services was more than their cache of “Clark-bucks.” It was another practical lesson in the value of transferring risk.
We also conducted two “job interviews”, one with a buttoned-up candidate who had done her homework on the agency and another with a guy who assured our senior vice president “you and I have something good going here” as he checked his text messages while slouching in his chair. The students voted to hire the well-prepared woman.
Those were just some the messages we imparted to these JA students; lessons we all need to understand to succeed in life while protecting the people and things we value.
Finally, to put a fine point on staying and doing well in school, we gave every kid a dollar from their boxes. It was an “insurance company dividend” to drive home the point that it pays to show up.
If you want to bring the classroom into your business and have some fun telling your story, contact, Junior Achievement of Maine 207 347-4333