Financial Loss · Insurance · Risk Management

Your Insurance Broker Has No Incentive to Retain You as a Client!!!!

Skin in the game – that means your insurance broker actually having a vested interest in your success and the level of service you receive year in and year out.  Skin in the game does not mean your broker having a greater financial interest in year one compared to subsequent years yet that is how most brokers are paid. Most brokers get paid a set percentage for new business and then see that drop significantly after year one, and at some of the largest brokers that percentage might actually go to zero.  If your broker is always looking for the next deal to maintain their income how do you think that aligns with your interests?  You might say that the service team is incentivized to keep the account, but that is rarely the case, the service team’s is usually paid a salary and a small component of their bonus might be based on how well they service the customer.

At Alliant we believe that we should have a vested interest in your success and that your success leads to our success.  How do we do this?  We as individuals get paid the same percentage every year as long as we retain you as client, we don’t get paid more to bring in new clients or take a haircut after year one.  In fact, if we lose you as a client we feel that in our wallets because that income is gone.

Why am I telling you this?  I tell you this because it demonstrates that we value our existing clients just as much as our new clients.  A lot of brokers come in and tell you a story about service and how good their service is but can’t point to a reason as to why that service level will continue – we can.  We can point out that we actually get paid or, if the service is not good, not paid based on how we service your account – we put our money where our mouth is, we have skin in the game.  How many times has your service fallen off, even just a little bit in each year (cumulatively this could add up and you might not even recognize what good service is anymore), from the initial engagement?  Unfortunately, this is just considered part of how insurance works and what one can expect but it shouldn’t be.  That is why my firm strives to be different, we are not interested in a slow deterioration of service for our clients but a firm and consistent model of service that is the same in year one as it is in year eight.

I probably will get emails from brokers saying you shouldn’t be sharing this information but if we are being transparent about how much the firms are getting paid shouldn’t we be transparent about know how the individuals servicing your account are being compensated?  I am not saying W2’s need to be shared but knowing the structure and how it aligns with a service model I believe are good pieces of information to have because it can be a predictor of the future.  Maybe you are different than me, but when I deal with a “service” provider I want those individuals servicing my account to have repercussions if the level of service is not there but sadly in the insurance industry that is seldom the case.  With Alliant that is exactly the case, if the service drops we feel it in our wallet.

Investment · Life Sciences · Risk Management

Why Securities Class Filings are a Reality for Publicly Traded Companies

A great mid-year report by Cornerstone Research on Securities Class Action Filings for the first half of the year.  I recommend you check out the full report which you can find here.

These visuals really speak for themselves but the big takeaway is that if you are publicly traded company the chances of being subject to a Securities Filing are rising.  In 2017, 8.4% of exchange listed companies were subject to a filing and in 2018 it is projected to be 8.5%.

Pct of US Exchange Listed Companies subject to Filings

If you are a member of the S&P 500 the chances of a filing are even higher at 9.6%.

Pct of SP 500 Companies Subject to Core Filings

Breaking this down even further, the industry you are in can change the odds dramatically as well as the chart below demonstrates.

Heat Map

The clients I work with are in the Life Science and Healthcare space and this is how filings breakdown in that group.

Life Science Filings by subgroup

I will dig a little deeper on this at a later post, but I believe companies need to believe a Securities Class Action filing is inevitable and prepare accordingly.

Once again I recommend you check out the full report from Cornerstone Research which you can find here.

Daily Reads

Friday Morning’s Top Articles

Happy Friday!  Here is what I am reading as we head into the weekend:

  • Talk about hitting on a lot of points, super insightful article – Regeneron’s Billionaire Founder Battles The Drug Pricing System (Forbes).
  • Bio Roundup: An Alzheimer’s Head-Scratcher, OUTBio, GSK & Gilead Shakeups (Xconomy)
  • When healthcare devices go over the counter. An important trend contributing to the consumerization of healthcare is the transformation of select prescription categories to over-the-counter (Med City News)
  • Six big things: Funding for females and cash pouring into China shape the week in VC (Pitchbook)
Daily Reads

Wednesday Morning Headlines

Here is what I am reading this morning:

  • Glaxo’s New Research Chief Loves Big Pharma. Now He Has To Fix It (Forbes) – Highly recommended read!
  • 23andMe is raising up to $300M on top of what they have already raised, valuing them at $2.5B (PitchBook).

23andMe

  • Venture capital firms invested more than $738 million in Medtech during the second quarter of 2018, $1 million less than the first quarter (Medical Design & Outsourcing)
  • Today is the big day – Biogen’s Spinraza zooms through blockbusterland, but analysts are fixated on Alzheimer’s data (FiercePharma)
Daily Reads

Monday Morning Healthcare News

It’s a new week and this is what I’m reading to get going:

  • While Tech Waffles On Going Public, Biotech IPOs Boom (Crunchbase)
  • Smart Bandage Can Dispense Drugs, While Keeping An Eye On Your Wound (FORBES)
  • Tendyne investors sue Abbott over $50m milestone (MassDevice). In case you missed, my thoughts on how a company can protect themselves financially from missed or delayed milestones (MattCorc).
  • Why the Theranos saga and Holmes’ trial is good for innovation (MedCity News)
Daily Reads

Friday Healthcare Articles

Happy Friday!  Here is what I am reading as we wrap up the week:

  • Drug lobby aims to shake up how medicines are paid for (BioPharma Dive)
  • A survey of 101 healthcare workers in IT and business/clinical positions asked respondents to rate their level of concern about insider cybersecurity threats, with 1 being not at all concerned and 10 being extremely concerned. The mean score was 8.2 (MedCity News)
  • Stanford researchers are developing a bioprinter that, when paired with an advanced bacteria scanner, could speed up screening for bacterial infections (Medical Design & Outsourcing).
  • FDA To Consider Drug Importation In Battle Against High Drug Prices (Forbes)
Daily Reads

Tuesday Morning Articles of Interest

It’s Tuesday and this is what I’m reading:

  • Recalls happen every day and cost a lot of money, there is a way to insure against that financial loss, but few companies know about it or insure against it – Teva Pharmaceuticals USA Issues Voluntary Nationwide Recall of Valsartan and Valsartan Hydrochlorothiazide Tablets (Business Wire).
  • 4 Regulations That Would Terrify U.S. Drug Companies Ahead Of The 2018 Midterms (Forbes).
  • Another stark warning over CRISPR/Cas9’s potential to do lasting harm dents share prices (Endpoints).
  • How medtech can prepare for the consequences of a “Hard Brexit” (Medical Design & Outsourcing).