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Diversify or die

Insurers and brokers need broad range of offerings to keep clients today, says COO of The Guarantee

Bob Dempsey, COO of The Guarantee Company of North America heads for the exit at the Insurance Institute's At the Forefront Breakfast, May 15, 2013. Dempsey will be retiring later this year.

Leading companies in the insurance industry need a diversity of product offerings to protect themselves from extreme shocks in the areas of weather, the economy and social unrest, says Bob Dempsey, COO of The Guarantee Company of North America.

Dempsey delivered the message to an audience of industry executives at an At the Forefront Breakfast talk, hosted by the Insurance Institute in Toronto on May 15.

Dempsey pointed to wild weather patterns over the last decade, quick and massive fluctuations in the world economy and social movements that have closed down cities and resulted in violence as the new world of extremes.

“The only way the insurance industry, in my mind, can survive that is to diversify. To make sure you have a spread of products that not any one of those extremes kicks you in the slats so badly that it affects your results.”

He cited The Guarantee Company of North America’s recent announcement of its entry into the long-haul trucking business as an example of diversification from the company’s specialties in public entity, surety and fidelity.

Read: Alister Campbell’s vision for The Guarantee

Dempsey argued that brokers, too, must broaden and diversify their offerings for clients to retain the business they have.

“If you’re not diversified into not just P&C business, but also life and health business, you’re not giving that one-stop shop to your clients. And all of a sudden somebody will blindside you with some product that you don’t offer and you’ll lose that entire account to a competitor.”

Read: 4 Keys to Client Retention

Dempsey also pointed to globalization as another driver for diversification.

“As the Canadian exporters expand you have to be able to give them worldwide coverage. Political risk is a huge example of that. So many corporations now export to the third world and political risk is now a very critical component of their insurance package.”

Read: Issues with making global insurance placements

After a 26-year career in the insurance industry and several years as an engineer prior to that, Dempsey is retiring as COO of The Guarantee later this year. His talk touched on a wide range of topics in answer to the questions, What has changed, and What has not changed in the industry over the last several years.

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