Decades of Winning Money for Policyholders

Bob Horkovich: Fifty years ago, the insurance industry still reflected at least in part the dictum of Hendon Chubb: paying claims is not just a contractual duty, it’s a moral obligation. Even 30 years ago, there still was a culture in certain insurance companies that would enable claims responses like, “You know what, that’s covered – let me write you a check.”

I don’t see that any more. Those insurance professionals of old have been knocked out of the insurance market by money managers. As the wall between commercial and investment banking eroded, culminating in Glass-Steagall repeal, banks and money managers came in and took the place of insurance professionals. A business centered on insuring losses was lost. Maximizing profits and money management became all-important. The question was no longer, “Did you insure the loss?” It became, “How long can we hold onto the policyholder’s money?” How have policyholders responded to that shift?