I’ve had two experiences in the last week regarding our economy and business climate that I think are interesting. The first was the annual economic outlook conference held by the Oklahoma City Chamber of Commerce. The second was an article in this morning’s paper about another decline in consumer confidence.
Annual Economic Outlook Conference
The economists at the conference were uniformly blasé about the national economy. The continuing lack of direction from Congress and the White House, uncertainty over the future of health care, lingering long-term high unemployment, sluggish growth in GDP, the gigantic interest hole we continue to dig with Quantitative Easing, and the continuing development of serious international economic competition were all factors cited in a generally gloomy economic outlook nationally. It was no surprise then that the paper reported another large decline in consumer confidence this morning.
The economists also had a lot of positive things to say about the economic strength of the “I-35 Corridor,” citing the low cost of living, the low cost of doing business, the resurgence of the cities and towns in this strip of America, and the strength and prospects for the energy economy. The news was good for the states in which we do business (Oklahoma, Arkansas and Kansas)!
Good News for Our Community
We are, in fact, seeing an influx of new population to this area, which means more new home construction, low unemployment, rising wage base, more commercial construction and a much more positive consumer opinion. This means more homes and businesses to insure, higher payrolls which drive workers’ compensation and liability premiums, larger health care premiums, etc. All of this drives insurance agency commissions higher!
In addition, we have seen the largest rate of property premium increases in the United States over the last three years. This is good news because we should be getting closer to “rate adequacy” in an important part of our business. Neither we, nor our carriers, can control the weather. But we are responding to it and the good news is that we are closer to sustainable forms and rates than ever before.
OAA's Benefits of Strong Economic Prospects
We have begun, and are making great strides in many of our businesses to diversify our book of business. We are doing a much better job of rounding accounts, selling service and choice instead of price, field underwriting and putting business where it belongs and investing in production capability. In sum, we have done a lot of great work to put our businesses in a position to benefit from the strong economic prospects our region has.
This is all a lot to be thankful for! I’m personally thankful for everyone on the OAA team who is working diligently to increase our mutual opportunities. I’m also grateful for our OAA partners who are doing their all to take advantage of the tremendous opportunities in front of us. 2014 and beyond holds a lot of promise for all of us!
I hope as you reflect on where we are as a region, an industry, an organization, a business and as individuals that you will share my feeling of gratitude and optimism about the future. Happy Thanksgiving!