Monday, December 29, 2008

Common sense risk management

Just before Christmas I was searching for a gag gift for one of my friends. I was shopping with several adjusters, and adjusters and insurance professionals, generally speaking, have very twisted senses of humor. This probably arises as a coping mechanism for dealing with mutilation, foolishness and death on a daily basis. But I digress.

I found a book of postcards titled Grandma’s Dead: Breaking Bad News with Baby Animals. As we read through the postcards, and many of them were quite graphic, we laughed so heartily and for so long that other bookstore customers began to gather around to see what all the fuss was about. Let's face it, in these economic times, everyone is looking for a laugh.

In short, the book is a series of postcard pictures of beautiful baby animals with captions like “Recycling Won’t Work," "The Meteor Can't Be Stopped," or, one germane to this post, “There is no Santa Claus.” Some of the captions are in extremely poor taste, but some are downright hilarious. See a preview at

As I was zooming through a slideshow last night of the people and funds that were hit in the Madoff scandal, I couldn’t help but think of the old adage that rings true especially today: “If it looks to good to be true, it probably isn’t.” One of the fund victims stated that participants questioned why they were consistently achieving about 10 percent return on investment when the global financial markets were melting down. Now they know.

What can we learn from this tragic lesson, which has rocked both charities and personal fortunes and led, so sadly, to one apparent suicide? The lesson is simple, and it is in the book Grandma’s Dead: “There is no Santa Claus.”
Unfortunately, the impact of this crash is going to ruin many people’s holidays, probably for years to come.

If you are an agent and would like to help your commercial customers better manage their risk, refer them to my blog on at Each week I give tips to help small-to-medium sized businesses better manage their risks.

Friday, December 5, 2008

Cavalcade of Risk #67

This is my first hosting of the Cavalcade of Risk, which is made up of some of the tops blog entries on risk management written in the past few weeks. Perhaps it is the economy, maybe it is the holiday, but for whatever reason, most of the submissions have leaned toward personal finance and I have weeded most of them out. Perhaps that's because many of us are currently paper paupers. I don't know about you, but with layoffs abounding in the insurance industry and beyond, I am grateful today for the security provided by this great career.

We did have some great risk management submissions, though. Because I am by trade an insurance marketing person, I read with a cautious eye Wenchypoo's entry, The Con in Lexicon, where we are told how "mere words can rob us blind." I must say, though, I agreed with the entry and even added my own suggestion: Value-Added Tax (VAT). Although I love my Irish scarf, it is not one iota more valuable because I paid my VAT.

We have several health insurance-related posts this month, including Richard Eskow at Sentinel Effect, who suggests another approach to the auto bailout: What if the government funded and managed the Big Three's health benefits instead? The Obama team could build a working model of health reform, Richard thinks.

Another health care post is one from Jaan Sidorov at Disease Management Care. In this post, physician and ex-medical director Jaan Sidorov examines how health insurers think about generic drugs and the tricks they use to promote their use and manage their trend.

Also posting this month is Jay Norris from the Colorado Health Insurance Insider, who tells us in his entry that just providing health insurance to the uninsured would still leave us with a pretty big mess. We don't have enough primary care docs, our drugs are too expensive, our hospitals are too focused on turning a profit, we spend more than any other country on our healthcare, and yet our results are mediocre at best.

Joe Paduda of Managed Care Matters gives us the gift of his insight in his blog, We Have to Deal with Costs. Clearly, the nation is at a crossroads in health coverage. The next few years will be interesting and expensive, no matter what happens.

Some companies will do anything to meet analyst and shareholder earning expectations, according to this post. Backdating contracts is one way to achieve this goal. By backdating contracts so that the revenues can be recorded for the current quarter, management is essentially recording future revenues in the current quarter. If you are considering investing, according to Qovax, take time to read both the auditor's report and the K-8s. Better yet, read this post.

In the Sun's Financial Diary, we are told the obvious: That diversification may not work in the current economic market. This article is short on answers, but what the heck, I'm in the holiday spirit.

Carson Brackney, the Personal Finance Analyst, blogs on a topic I have unfortunately experienced firsthand: a major illness sans long-term disability coverage. In Long-Term Disability Coverage Makes Sense, Brackney outlines the top reasons we need this vital coverage. In case you are wondering, I will be working much longer than I anticipated due to my lack of foresight. What are you waiting for? Call your agent.

Here's a post from the Monevator on why the riskiest assets to buy right now could be the safest: US treasuries. This article explains why.

Whenever I see the name Chris Boggs I read him because he is a strong writer and very knowledgeable. I tracked him down on My New Markets, which he edits. Boggs fills us in on Insurance for Bloggers (in three parts). Bloggers, beware!

InsureBlog gives us a really insightful post on sharia-based insurance. Is it good risk management or a cover for terror-enabling? Henry Stern takes a look at this controversial new product. I just have one question. Can women underwrite or handle the claims for the sharia-based coverage? Many interesting avenues to this post, so don't miss it.

In a timely article given that several New York workers' compensation trusts have gone belly up, Julie Ferguson of Workers Comp Insider tells us what happens to your workers' comp claim if your insurer or your employer declares bankruptcy.

In this time of economic turmoil, many of us will be either giving or receiving loans from relatives. This quick post from Bargaineering outlines some tips to help us lend without running afoul of the IRS.

This week I tackle public relations and recommend a great book in my blog Risk Management for the 21st Century. Bad PR is a killer to firms large and small, so take a gander.

To end on a humorous note, here is a great entry I found in The Employment Law Post entitled, Booze, Porn Addictions and Interventions: What a Holiday Party. I used to think I was a pretty good boss until I started watching The Office and realized I had more in common with Michael than I cared to admit. If you missed that episode of the office, see if you can find it somewhere. It's a hoot.

If you would like to post in an upcoming blog, feel free to submit to Cavalcade of Risk using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Have a safe and risk-averse holiday.