Return of the Guru

Analyst Survey Brings Dual Relationships Into Question

Ara Trembly
Insurance Experts' Forum, April 21, 2011

In a dog-eat-dog environment like today’s insurance industry, carriers and others are striving daily to gain whatever competitive advantage they can—especially in the currently negative economic environment. 

Not surprisingly, many carriers turn to well-known industry analysts for advice on everything from systems upgrades to marketing to strategic direction. Ours is an industry blessed with a number of top-flight analysts who work hard at delivering actionable information and advice, and are generally successful at what they do.

This was confirmed recently by an Innovation in Insurance (i3) analyst survey that looked at trends regarding how information from analysts is used within a carrier. i3 is a student-run insurance technology enterprise operating within the Moore School at the University of South Carolina.

Not surprisingly, the survey found Celent, Forrester, Gartner, Novarica, Strategy Meets Action and Tower Group to be among the leaders in our industry. Carriers utilize these sources for competitive information, company profiles, business trends, vendor analysis, original research and strategic guidance, among other things, the research says.

In an open-ended question, however, the survey also asked insurance industry respondents “whether industry analysts notify companies of all innovations and solutions vendors in the industry, or if the information was in some way biased.” 

According to i3, “The trend across the board named analysts’ reports to be biased based mostly off of ‘favoritism’ or ‘buzz.’” The survey report says one contributor stated that they “think that there are some analysts that have a tendency to favor certain vendors’ (perhaps because they spend a good deal of money on their services), implying that analysts may promote technology vendors who contract with them for consulting.”

These kinds of sticky problems are commonly found in other disciplines, such as treatment of clients by psychotherapists, counselors and the like. Having a “dual relationship”—for example giving treatment to a family member—is considered a breach of ethics, because a therapist may be more interested in manipulating that family member for his own benefit in therapy than in promoting what is best for the client. I’m afraid we sometimes have very much the same situation with our analysts.

The survey commenter rightly points out that analyst firms often have a contractual relationship with vendors and with insurers, all of whom may benefit by their services. There is really nothing wrong with this—until the analyst is called upon to make “objective” assessments of vendors (some of whom may be paying the analyst) or of an insurance market that includes other insurer clients. Where do we draw the line between what the analyst firm “knows” and what they can say?

In the world of psychotherapy, “dual relationships” (client/relative, client/friend, client/lover) are at least frowned upon and generally to be avoided. Therapists have a number of ethics boards and licensing bodies to make sure this happens, although nothing is 100% effective. 

Dual relationships are not uncommon in the world of analyst consulting, and sometimes they are not harmful. The real trick is determining which relationships are potentially problematic, and then taking steps to avoid problems. Firms that evaluate vendors, for example, could start their evaluations by spelling out with which vendors they have (or had) business relationships. At least that way, the readers of the evaluations could make judgments for themselves.

As I said earlier, we have a great group of analysts in our industry, and I would be less than honest if I did not tell you that I have personal relationships with some of them. Be that as it may, however, impropriety—or even the appearance of impropriety—should be avoided. 

Ara C. Trembly ( is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

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Comments (1)

Well said, Ara. By its nature, dual relationships can be quite complex and problematic. Adding to that complexity is the definition of the term "analyst," as our industry has been inundated as of late with consultants calling themselves analysts, and analysts who are, in essence, providing consulting advice to their clients. In my experience, many and various players in our industry have even been called symbiotic - publicly defined as the act of embodying any highly interdependent or mutually beneficial relationship between two persons, groups; i.e., a mutualistic relationship. What folks are really saying is that we don't tend to leave the industry. I'm still not sure where editors fit in, but go with me on this one: Analysts sometimes become consultants, consultants become vendors, vendors sometimes circle back to work in insurance companies, and insurance personnel are famous for jumping ship to become an analyst, consultant or a vendor.

Speaking of editors, I'd like to clarify a point: last week Insurance Networking News made a news call on the pitch we received from this group of students from the Moore School. Rather than simply publish the press release, we made several inquiries to ferret out more details, and we discovered that the sample size (32) was actually too low to draw any objective industry-wide conclusions. And when we did not receive clarification on who comprised the 32-person sample (i3's press release noted that "the questions were designed to ask carriers, consultants and technicians"), we had no choice but to pass on reporting the survey results. That said, I commend i3 (and Frank Heaps, who heads up this education branch as managing director at Innovation in Insurance at the Moore School, and who many may also know as director, product marketing and sales engineering at StoneRiver) for their efforts, and I encourage them to continue their study on this important topic. We can all benefit from learning who believes what in terms of our industry's mutually beneficial relationships.

Posted by: patricia.speer | April 25, 2011 5:22 PM

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