Sunday, March 23, 2008

Getting rid of the bad tables

Seth Godin’s The Bad Table post got me thinking about the group insurance industry. The post challenges readers to think differently about their “bad tables” (you know, the ones crammed in the corner near the noisy kitchen or next to the bathrooms). It suggests giving special service at the bad tables to make the entire experience equal with that of the good tables, but equal in a different way. The reason this makes me think of insurance is because the group insurance industry is famous for handing out lots of bad tables, usually to small groups. Insuring small groups can be risky because there isn’t a large pool of people to spread risk across. However, because small groups tend to have higher premiums (to account for the riskier nature of their size) they usually end up funding the discounts that the larger groups enjoy. And for their trouble, they get treated as second-class citizens. Many insurance companies create great new benefits, but usually with the fine print of “not available to groups of 50 or less members.” That leaves small groups paying more in premiums for fewer benefits. While not all insurance companies are guilty of this (Delta Dental extends new benefits to groups of all sizes), many are. Getting rid of the bad tables is something every business should strive to do. It wont be the easiest assignment, but it could be the most creative.

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