By Douglas Karlson
Over the past two decades, business has changed dramatically (consider email, mobile technology, and the sharing economy). But all too often, when it comes to insurance, businesses don’t keep up, and insurance policies don’t provide the protection for which they were originally designed. Uninsured losses have steadily increased every year since 1975.
Having an accurate picture of risks faced can ensure a company’s survival, and making sure the best policies are in place can have an important impact on the bottom line. But most people don’t like to think about insurance. It’s expensive, often complicated, and it deals with scary events people hope will never happen. That’s why they need someone like Peter MacDonald, of Murray & MacDonald Insurance Services.
MacDonald brings energy, a commitment to service, and a fresh eye to what he says is a rapidly evolving industry. He brings imagination too, which is critical, because insurance is all about being prepared for what might happen in the future.
Whether it’s a high-tech firm or a fish farm, MacDonald thrives on gaining an in-depth understanding of his clients, and the challenges they face.
“I think it’s fascinating,” he says.
The industry is undergoing profound change, he maintains. It’s experiencing technological innovation, and facing many challenges, such as the rising cost of health insurance. At the same time, it’s also attracting major investment from venture capitalists due to the fact that it accounts for about 7 percent of the nation’s GDP.
“We’re at a very interesting time,” he says.
It’s an interesting time for which Murray & MacDonald seems well-equipped. With locations in Falmouth and Bourne, the agency dates back to 1971. In 1997 it was purchased by Peter’s father, Doug MacDonald. Cape Cod Bank and Trust acquired a controlling interest, but Doug MacDonald purchased it back in 2004 when CCB&T was bought by TD Bank. Peter MacDonald and his sister Sara Giguere entered the firm in 2011 and 2007, respectively.
Doug MacDonald is the President and CEO, and Peter MacDonald serves as VP of Sales and Marketing. The business offers both personal and commercial policies. “It’s a healthy mix,” he says.
The firm primarily serves Southeastern Massachusetts, but also has clients as far away as California. There are about 20 employees, and MacDonald says everyone “wears a lot of hats.”
“When we bought back our business from Cape Cod Bank & Trust, we wanted to do something different.”
“I’m basically a risk consultant,” MacDonald says. His goal is to study the client’s business, assess the risks, and suggest a policy that will truly serve and protect them. MacDonald says he follows a three-step approach when approaching a commercial client.
Step 1. Feet on the ground. Before meeting with the client, MacDonald does preliminary research, analyzing the business almost as if he were looking to buy it.
Step 2. Risk assessment. MacDonald uses a questionnaire the firm developed to highlight potential issues that are outside what is covered in an existing policy. For example, this might include reviewing a lease agreement and comparing it against a business owner’s appetite for risk should a disaster strike the property.
Step 3. Gap analysis. This is an analysis of current policies, and an explanation of the “gotchas” (such as a car crash or employee injury) that could arise. Because businesses change over time, MacDonald says, they always find something in a gap analysis.
After doing that research, MacDonald presents a Risk Plan, which considers where the company is now, and where it wants to be in the future. He prefers that approach to simply providing a new quote on an existing policy.
“If you’ve got errors in your policy why do you want a quote?” he asks.
A risk plan not only helps a client be aware of risks and prepare for them, but they make clients look more attractive to underwriters, indicating that their businesses are well run, that the risks are properly identified. It’s important to have a plan in place, he says. “That’s the wrong time find out you didn’t buy the [right] policy. This is America, lawsuits happen all the time.”
In assessing a client’s needs, he asks, “What’s your plan if you get sued, or if a building burns down?” In his job, he sees first-hand how scary accidents and lawsuits can be, and wants his clients to be prepared.
“Most businesses don’t fully understand their risks and coverage,” he says. “For instance, a simple business car crash can lead to employee injuries that manifest in an increased workers compensation cost multiplier a year later, reputation damage in the community, damage to nearby business properties, and potential medical lawsuits if drivers, passengers, or pedestrians are injured. A small mistake can lead to a chain reaction that puts your very business livelihood at risk and will impact your cost basis, making you less competitive for the work you do.”
“It’s not hard to cause millions of dollars in damages. It’s scary. What we want to do is partner with a business to help them minimize risks.”
He particularly enjoys getting to understand the complex requirements of larger commercial clients. For business that have policies of $50,000 or $100,000 or more, says MacDonald, “there’s probably a need to deliver some insight. Often, business owners haven’t fully imagined the potential risks they face, and are undercovered. Or they may be following a policy that is out of date, or they may be over-insured.”
As he helps his customers, MacDonald also keeps an eye on the industry, and how it’s evolving.
He notes that the buying and selling of agencies is at an all-time high.
“Right now, insurance is the hottest category in startups,” he says. The reason is that it’s such a huge industry. Insurance is everywhere you look: every car, every building, every business has it. At the same time, much of the technology is old-fashioned, the customer experience can be bad, so there is opportunity for innovation, investment.
“My hope is it becomes more transparent, easier, and cheaper,” he says. Toward that end, MacDonald has been innovating as well. He recently introduced a new text messaging capability that has a website, Send Text, Get Quote (sendtextgetquote.com), because he wants to be able to communicate with clients on the platform of their choice.
MacDonald takes issue with the idea that insurance policies are routine or one-size-fits-all. The expertise offered by the insurance agent is what counts, he says. He notes that many people probably carry insufficient auto insurance, and says that larger, more complex businesses, like marinas, for example, require specialized advice, whether it be cyber insurance or flood insurance.
“The advice is very valuable,” says MacDonald.
“There’s value to doing it right. Cheap is not always the best. You get what you pay for.”