The self-insurance/alternative industry is a major force in the U.S. economy, but it is largely invisible to most members of Congress. It is similarly cloaked at the state level.
So why the disconnect? Follow the money trail, or should I say the absence of such a trail.
While it’s rare these days that political contributions can explicitly “buy votes,” the reality is that financial support normally does get you access to politicians, which allows interest groups to deliver their messages in an unfiltered way.
Almost every major industry gets this concept. Sadly, our industry is one of the few notable exceptions.
This conclusion is easily quantified by looking at the political contributions made by the business community generally and the traditional insurance industry more specifically. They dwarf what has been contributed by those with an interest in protecting and promoting self-insurance.
As my role within our industry has evolved over the past few years, I have become what political operatives call a “money man,” which means I am responsible for passing the hat to collect contributions for politicians that we hope will support various legislative/regulatory priorities.
Obviously this role has provided me a unique perspective on our industry’s historic stinginess and naivety about how the political process really works.
Now of course there are exceptions. Many companies and individuals reach for their checkbooks immediately upon request and do this enthusiastically. But in my experience, soliciting political contributions is a tough sell in most cases.
Complicating matters is that political contributions at the federal level must be done through personal checks or credit cards. No corporate money is allowed.
Interestingly, there are countless individuals who have made a very nice living though their involvement in the self-insurance/ART industry, but hesitate when asked to financially support political initiatives that will help the industry. It’s difficult to square this reality.
Other individuals have the mindset that they are willing to write a check, but only when there’s a hot issue. That’s short sighted.
For those of us who clearly understand the concept of insurance, you know you can’t purchase property insurance when your house is burning down or health insurance when in an ambulance on the way to the hospital.
Making targeted political contributions is the equivalent of purchasing insurance to mitigate possible future legislative/regulatory risks.
One complication is that our industry is comprised of corporate buyers (employers) and service providers. These two segments have different motivations and capabilities for political involvement.
Service providers generally have a top-line interest in legislative/developments. In other words, they consider how such developments will affect revenue generation. In my experience this is the most powerful motivation to write a check.
Risk/benefit manager types, on the other hand, are focused on the expense line. They just want to be able to utilize self-insurance vehicles to control costs with minimal regulatory hassles. And while most view this as important, it’s uncommon that they will write a personal check in support of a corporate objective for which they do stand to directly benefit financially.
That’s not a criticism, it’s simply reality. And because of this reality, a large number of people in our industry will be confined to the sidelines of political involvement making it even more important that service providers pick up the slack.
Despite our industry’s historical underperformance in the money game, I am actually cautiously optimistic for the future. My sense is that the messaging just needs to be sharpened so that political contributions are viewed as both insurance and investments.
I will be directly involved in some targeted political fund-raising efforts over the next couple months and expect to have many one-on-one conversations as part of passing the hat. This will give me a new opportunity to test my assumptions.
Will people show me the money? I’ll circle back on this topic in the near future and let you know.