January 4, 2019
by ANNA HRUSHKA
Pacific Business News caught up with Ishii to chat about industry trends, opportunities for 2019 and how the state’s largest insurance agency is keeping its clients protected.
What kind of industry trends have you noticed in the past few years? Historically, the insurance industry was very heavily influenced by relationships. Today that’s changing as the new generation of leaders are coming on board. They understand that relationships are important, but technical knowledge and expertise is even more vital and of paramount importance. We see this trend already in full force on the Mainland as more and more small independent insurance industries are being consolidated and acquired. We are starting to see that trend here in Hawaii as well, with the purchases of a few agencies here locally.
What is the reason for the consolidation? Part of it is, insurance agents overall were more generalized. They may sell homeowners insurance, they may sell auto and business, policies for a wide spectrum of industries, sort of a broad-brush type strategy. Unfortunately, today, with more and more industry specific claims, such as food borne illness like the whole Genki Sushi situation here, we see more and more product recall type scenarios. Crime and cyber claims are becoming more prevalent. Generalists are starting to lose their appeal. For an individual, to educate and manage insurance programs with a broad-brush standpoint is becoming more and more difficult. A program for a restaurant is very different than an insurance program for a construction company or a nonprofit entity. You almost have to be more specialized or have an agency that you are a part of that has these specialty divisions to help you become more of a trusted adviser, because it is becoming more specialized. Keeping up with the trends with the specific coverages and making sure that your agency or yourself as an agent even has access to these specialty markets and these new endorsements is critical.
What about businesses in Hawaii? Do they want more specific policies? What is interesting, unfortunately, here in Hawaii, most businesses aren’t aware that this is an issue. You don’t know what you don’t know. They’ve been redoing their insurance policies with the agent they’ve been working with for many years. Year after year they are coming in similarly with the same type of policy and programs. But as a generalist, you don’t understand that there are these trends going on and that there are these specialty insurance policies that need to be addressed. If not, you are putting your client at risk or exposing them to potential risks that are out there. Take cyber, for instance. Not a lot of insurance agents out there understand that even for cyber itself, there are different markets for large retailers in comparison to a medical company or government regulated entity. Most agents don’t understand cyber in an in-depth way unless they really specialize in it. They are not able to truly educate or inform individuals about the potential exposures of cyber.
Do Hawaii insurance agencies face competition from Mainland companies? Hawaii is a relatively small marketplace. From a national perspective, it’s not a very large market for [Mainland insurance agencies] to really invest and have a lot of footprint here in Hawaii. They tend to focus more on the large marketplace businesses, which gives us a great opportunity to work not only in the market of large businesses, but also middle market and small businesses in the state of Hawaii because of the team we can bring and the expertise.
What are the biggest opportunities for this industry in 2019? Most companies don’t have a risk management plan that can help prepare for the unexpected to really help them minimize the risk before it happens. Benjamin Franklin said, ‘An ounce of prevention is worth a pound of cure.’ There needs to be more education and emphasis in Hawaii to understand that by having a comprehensive risk program, you can really start protecting not only your company and your firm, but really show that you care about your employees. Local businesses can start by teaming up with their insurance agency or insurance agent to map out a strategy to prevent and mitigate loss. It’s a mutual goal and commitment for both parties. The less amount of claims, the lower the premiums. From a business perspective, it is not just a humanity thing, but it also could be a business thing. If they can team up with the insurance agency and start to reduce their cost by reducing their claims, it will be a win-win for everyone.