A Brave New World (of Insurance)



Photo by Brian Ambs

Jonathan Theders is starting a revolution.

Approximately four years ago, Theders, Chief Executive Officer of RiskSOURCE® Clark-Theders, peeked over the horizon. What he saw was a bright new world waiting. Reaching it, however, has demanded a bright new approach. 

The West Chester-based firm (formerly known as Clark-Theders Insurance Agency) has specialized in providing insurance and risk management to individuals, families and businesses for more than 60 years. Shifting the name of this second-generation company is just one step that Theders and his team have taken to highlight and evolve their company’s direction. That direction, and the philosophy behind it, has the potential to change the world of insurance as we know it.

 

The World As It Is

It used to be that local insurance agents were given the opportunity to champion their own policies as compared to those of other agents. Nowadays, it's much easier for consumers to do a little online research comparing insurance products. Without an agent there to extol the benefits of a policy, price has become the dominant factor in insurance decisions. Insurance is no longer a specialized product, but a commodity to be aggregated online into a list of quotes ranked by price.

The insurance carriers are forced to compete on price alone. Therefore, a higher-cost, higher-quality product that may fit an individual's or company's needs better than a low cost, one-sized-fits-all policy may not even show up on a page listing of results. 

“A lot of industries are continually focused on commoditization,” says Theders. “And insurance is no different. Whether you’re the big, mega-broker or the small ‘Mom and Pop’ shop, we’ve all gravitated toward commoditization.”

Theders emphasizes, however, that boiling everything down to a spreadsheet not only restricts the client-agent relationship, but, “In all actuality, it really sells our whole industry short.”

Though this bottom-line-centric environment is particularly conducive to the continued growth of certain media-dominating insurance giants, it ultimately breeds a marketplace that thrives on a superficial understanding of the individual client. Pointing out that these Internet-driven companies are poorly informed about, and far removed from, their customers, Theders says that “they don’t want it to be about the relationship and truly understanding what your needs are. They want it to be ‘click and pay.’ ” 

Theders explains that another restraining factor on the industry’s evolution is the traditional “bid and quote” model of insurance sales. In this process, the broker simply acts as a middleman, communicating with the insurance company on one side and the customer on the other.

This, Theders elaborates, ultimately fosters a self-limiting atmosphere where the broker “just avoids finding any issues” in their clients’ operations.

Brokers, fearing that the insurance company will either increase the customer’s rates or simply decline coverage, essentially apply their own blinders. They “just focus on the spreadsheet,” says Theders, and the cycle of commoditization continues.

The RiskSOURCE perspective, however, is completely different. “Our process,” Theders says, “is find the issue. It’s not avoiding the issue. It’s discovering the issue.”

 

The World As It Could Be

“We should be risk managers first and insurance policy providers second,” says Theders, envisioning a more effective incarnation of the industry. Even when it comes to risk management, though, the RiskSOURCE approach delves much deeper than the industry norm.

“We should be risk managers first and insurance policy providers second.” – Jonathan Theders

The RiskSOURCE approach is focused on adding value to their clients’ respective businesses. Theders points out that for any outside party to contribute real value to another business, they need to possess a profound understanding of that business.

“We focus our entire efforts on our risk management audit,” says Theders. The audit process spans the full cross-section of a business and takes the RiskSOURCE team into territory that is not only practical, but philosophical as well. They identify the company’s goals, strengths, and opportunities for growth.

“And then,” Theders says, “we focus a lot of time on risk issues. Policies, procedures, work environment and company culture.”

Each industry, each company and each department is a unique entity, and each carries a unique set of risks. These risks are compiled into what is known as the “Risk Profile.” Delving into the company’s various operations and working with them to elevate their overall safety, Theders focuses on improving that Risk Profile. This process is one that continuously evolves over time.

“It’s not just one singular event,” says Theders. “We’re not just doing a risk audit and walking away. It’s an ongoing process year after year. We’re constantly involved with our clients, helping them be better.“

This ongoing relationship gives the RiskSOURCE team the opportunity to document the practical steps each organization takes to become a more proactively safe business. A safer business, Theders explains, is a safer bet for the insurance company. A safer bet for the insurance company translates, in turn, into decreased insurance costs for the business. “And that,” says Theders, “is our primary focus.”

The RiskSOURCE method saves their clients an average of 17 percent in the first year. Theders emphasizes, “that’s a true, net 17 percent,” including any investments a business makes toward implementing new safety procedures. Theders notes that during the four years that his team has been employing the RiskSOURCE approach, they’ve seen “a net 35 percent decrease in rates for our clients.”

Though these figures are impressive, Theders maintains that the benefits can’t be limited to facts and figures. Safety improvements not only result in fewer insurance claims and decreased employee turnover, but they boosts employee morale as well. “Making our clients better, safer, more productive... now we’re adding true value.”

“Our vision,” says Theders, “is that RiskSOURCE become the sought after model for what an insurance agency should be.” He continues: “It’s not just about us. We really believe that if we can elevate our whole industry... if we all became risk managers, we would amplify what our industry is about.”

For the RiskSOURCE Clark-Theders team, infusing value into their clients’ lives and liberating the entire insurance industry from the cycle of commoditization is more than a mission. It’s a revolution.

 

RiskSOURCE Clark-Theders is located at 9938 Crescent Park Drive, West Chester, OH 45069. You can reach them at 513.779.2800 or visit their website at www.risksource.com