National Association of Mutual Insurance Companies

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P E R S P E C T I V E S

Best Practices

Best: epitome, apex, first, top

Practice: repeat, make one’s self to be proficient, strive for mastery, ingrain

We talk a lot about “best practices” in the insurance industry. The phrase is so overused that it is in danger of becoming just another buzz-phrase.

So what constitutes a best practice? When we think of something being a best practice, we see it as the gold standard of operation for that particular process. It is the benchmark by which others measure.

The magazine staff and I were discussing this while fielding ideas on content for this issue. Exploring best practices in underwriting, claims, human relations, finance and operations were suggested; all were rejected because determining best practices in any field is so subjective that it is hard to point to any one operation as a best practice example. I also believe it is presumptuous to tell our members companies – the majority of which have been successful for more than 100 years – that there is a single “right” way to do anything!

Here are a few questions that your company may consider in generating best practices ideas. If nothing else, they present an interesting exercise in looking at the effectiveness of your own company and comparing it with others you consider successful in any or all functions of an insurance company operation.

  • Do you have a three- to five-year business plan and run your business from that plan?
  • Do you set objectives and hold yourself and others accountable for those objectives?
  • Do you manage your business from the dashboard instead of the rear-view mirror?
  • Do you know your non-financial, critical performance measures?

It’s interesting to note that planning is the common theme. We’ve all heard the phrase, “If you fail to plan, you plan to fail.” Aren’t all “best” practices the result of thoughtful planning? Anything worth doing is worth planning for and then monitoring the results and learning from that process. We use that information to create practices we know will have good results. We are accountable to our customers, our colleagues and our industry to create the best product and offer the best service possible. Sometimes it means trying new things and sometimes it means improving on our current models. But all good work requires a plan.

I may be biased, but I think it’s a natural course for NAMIC member companies to look for the best way of conducting their companies. Mediocrity does not perpetuate an industry for 258 years.

And mediocrity does not perpetuate an association for 110 years. Founded in 1895, NAMIC is the largest property/casualty insurance association both in terms of the number of companies represented and in premiums written. The NAMIC staff dedicates its efforts to initiatives that will benefit member companies and works daily to accomplish NAMIC’s vision of being the recognized leader in providing association membership value to the property/casualty insurance industry. To that end, we’ve established our own best practices recently in areas ranging from association governance to communication, and we now work to meet these standards that help us accomplish objectives for members.

In today’s competitive world, when all businesses are under heavy scrutiny, those who plan carefully to make every operation in the company a best practice will be the winners.

Charles M. Chamness
President, NAMIC

Posted: Wednesday, June 01, 2005 12:00:00 AM. Modified: Wednesday, September 07, 2005 2:02:53 PM.

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