State Government Finance. The Relevance to Your Agency.

Most of the headlines we see today about our government-finance pickle are focused on the annual federal deficits and exploding national debt.  Those headlines are deserved because everything the federal government might do to reduce the deficits causes a short-term hit on already weak economy.

But, profound though the federal situation may be, it’s full of hair-hurting complexities, like international currency values, and thinking about it does not lead most of us to any practical sense of how we are supposed to respond.  My suggestion is to look closer to home.  Take a hard look at the emerging financial position of your own state, and even some of the larger municipalities in your state.  They can’t print money, and the level of bacon-saving stimulus money that arrived from Washington a year ago is not likely to continue.  Most of these entities will be facing some really severe spending cuts in the next year or two.

The point here is not to ramble on about the state of the world but to urge you to take a close look at how these developments might affect your agency.  For those of you who insure a public entity or quasi-government agency or one that lives on significant state or local grants, the effects may be direct and obvious.  For many others of you, the effects might be one or two steps removed, but real nonetheless.  Examples are agency-client companies that are completely private but who provide goods and services to organizations more directly dependent on government grants or purchases.  Contractors come to mind, but there are lots of others too.

Still another thing to try to get a handle on is which communities are likely to be most affected and what the potential impact will be on your agency’s personal-lines accounts.

We don’t know of many independent agencies that do, or subscribe to, serious research on regional demographics, economics, and business profiling.  But there are companies that do this kind of work for regional banks, so maybe a friendly bank that is not your competitor will be willing to share with you whatever research it has.  Or maybe you could encourage your state association to contract for such research and make it available to members on an economical basis.

Anything you can do in the way of insight and anticipation is better than getting blind-sided.  The margins are getting too thin for that.

A final comment is that this does not have to be all defense.  You can be aggressive about it.  When things are changing in your marketplace, and you are ahead of the curve in terms of understanding the dynamics, there is usually a chance to write business, make an acquisition, or attract some good people. - BHB

Healthcare Reform's Impact on Agencies... and Our New Website

Welcome to our first blog and our new website.  We here at BHBCo are excited to be able to share our thoughts on current issues with our friends and clients through this new forum – and we definitely want to hear your thoughts back!  Our goal is to write about topics that will interest you and that can impact the way you look at your agency’s (or other organizations') operations.

Please take a look around and let us know what you think of our new site too! - Jason

Impact on Agencies of Health Care Reform Legislation

We plan to do a more extensive piece on this subject in an upcoming Burke Ink, but our early thoughts are these:

• If you are in the small-company employee-benefits business today in any significant way, and you want to stay in it, we think you’re ok.  We don’t see anything yet that will cause benefits agencies (in general) to go the way of 8-track tape players.
• But, if you want to stay in it, or get in it, you had better be prepared to flex, learn, get frustrated, be unsure, and have customers and prospects vent their spleens at you.  There won’t be much room for sissies.  Learning is usually a good thing, but the learning part of this new development is not likely to be very inspiring.  I had someone recently read me the law’s definition of “small,” as in small company, and my hair began to hurt.  I felt the strong need for an adult beverage.
• If you are hoping to dabble in it, or just enjoy some passive diversification of revenue, we are not very high on your chances for happiness.  You could become very bad at that part of your job.

The main point here is that the subject with which you will be dealing is a very important one, and one on which business owners, business managers, individuals, and heads of households will need advice, and to some degree will still need commissionable products.  Those producers who focus on their customers, get their arms around the machinations of the Health Care Exchanges and the like, and cut through the weeds to see, and be able to explain, the key points and trade-offs, will be very valuable players in the community.  That combination – the ability to approach an important, confusing, and expensive subject with focus, practical advice, and follow-up service – usually leads to getting paid pretty well.  BHB