by William Stuart
(Top photo: William Stuart (second from right) at Hannover Re Group at its headquarters in Hannover, Germany. Bottom Photo: William Stuart (fourth from left) at JLT Towers Re in London.)
I have written about my travels in the past, and this is another recitation of my observations and experience that I have gained from my recent business trip to London and Germany.
This was an endeavor quite different from previous trips as this one relates to business and risk mitigation. Some of you are aware that I am an advisor to an insurance company located in the Midwest that provides professional and property liability coverage primarily for pharmacies. Approximately a year ago, this insurance company asked me if I had an interest in traveling to London and Germany to meet with their reinsurers. As a side note, insurance companies will often purchase reinsurance to assist in distributing liability risk to ensure solvency and company health.
I was quite surprised at their offer, and I wholeheartedly accepted this opportunity. The initial stage of this project was for me to observe and provide some input to the reinsurers attending the meetings. I developed and provided a PowerPoint presentation of a broader scope of information as it relates to: (1) sterile compounding in the United States, (2) current pharmacy regulations, (3) USP 797, and (4) the future of sterile compounding pharmacies. The bottom line was that they asked me to educate the reinsurers about issues relevant to sterile compounding.
The primary insurance company that I am involved with is Pharmacists Mutual, which purchases reinsurance policies from various insurance entities. Unlike normal customer and vendor transactions, the purchase of reinsurance is quite special. The reinsurers have a product (reinsurance) that they want to sell. However, the reinsurers are very discerning in determining which customers they wish to engage in business. These meetings provide the opportunity for the customer (primary insurance companies) to present themselves to current and prospective re-insurers.
Some of the primary insurance company’s relationships go back 20+ years. I asked the Chief Operations Officer of Pharmacist Mutual how many insurance companies travel to London to meet the various syndicates, reinsurers; and he stated approximately 50% of the companies travel to meet with these people. The importance of this type of meeting cannot be overstated. Ultimately, when the primary insurance company has a significant loss due to a claim, the reinsurers become a very important element of settling the claim. As most of you know, business is based upon relationships. Establishing a strong relationship – especially when it comes to insurance – is vital to appreciating the good times and enduring the bad times – something I firmly believe in.
At one of the meetings, a broker said to me: “First, we have to get to know you. Then we have to like you. Then we have to trust you. Only then can we do business.” That made me think about Hartley Medical where we strive to tell you as much about us as we can to get to know us, do everything we can do to have you like us and our service . . . and then work tirelessly to earn and keep your trust.
At each meeting, introductions were made, business cards were exchanged, and we commenced with our agenda. Our team consisted of the President and Chief Operating Officer, myself, and our brokers from Lloyd’s of London and the U.S. We started out with my presentation to discuss sterile compounding, and then led into the company’s overall health in regards to revenue growth, profits and or losses and surplus.
I was able to observe some very interesting events and interactions during the course of four days. True to British tradition, the meetings were very formal. Attire was absolute business, something that I am very comfortable with. Initially, I was overwhelmed as I realized that I was speaking to people at Lloyd’s of London (with centuries of history) and interacting with mission critical reinsurers, as it relates to Pharmacists Mutual. We had working lunches and late-night dinner meetings to get to know each other and discuss our efforts.
What does this all mean? For me, I have gained a greater understanding of the insurance company that provides Hartley Medical and me with both professional and property liability coverage. Understanding our coverage allows me to review my organization, management, and perform risk assessment to better protect my patients and my clients. Most people assume that insurance covers “everything,” and that is not the case. I am a firm believer in insurance both personally and professionally. This endeavor has given me a greater understanding of the insurance that I purchased, the health of the company that is insuring me, and their activities that relate to reinsurance to mitigate risk and provide coverage.
Not all insurance companies are the same, just like all compound pharmacies are not the same. I am truly thankful for the opportunity that Pharmacists Mutual provided me, and with this new information, my company will become even stronger in our commitment to quality.
If you have further questions, my door is always open.