Knowing the competition: in the highly competitive insurance industry, we cannot afford to be negligent in analyzing our competitors. (Property/Casualty: Underwriting Insight).

"Know your enemy, and in 100 battles you will never be defeated."

--Sun Tsu, from Art of War

One of my neighbors manages a store for a large home improvement chain. Recently, we were talking about competition and I asked him if he ever went into the stores of his competitors. His answer surprised me: "At least three times a week."

I shouldn't have been surprised. In such a highly competitive environment as home improvement, it is crucial to have a handle on the competition. Then again, knowing the areas where your competition does well and where they need improvement is critical in assessing any competitive situation.

The insurance industry is as competitive an industry as any, yet sometimes we are negligent in the analysis of our competition. Depending on the company, and often even depending on the local office, you will see varying degrees of competitor analysis.

Most companies have concluded that they can't be "all things to all people." Every company has certain unavoidable limitations and obstacles. It is in the assessment of this fact that we all need to evaluate ourselves relative to our competitors.

Knowing these strengths and weaknesses enables a company to effectively build its brand and establish its product positioning. We need to make a conscious effort to ask the key question: how do we stack up against our competition? The answer to this will be constantly changing, so the question should be repeated and discussed often.

Here are some suggestions for evaluating how you measure up to the competition. You need to assess what you do well--underwriting could be a case in point--and try to sell it. You also need to assess what you do poorly and either improve it or minimize the significance of it.

Staff: I would always start here because it is the single most important factor in the success or failure of a company. Do you have an intelligent, motivated and informed staff? if you can't answer this question with a positive remark, the deck is stacked against you. if you have good players, you will win the game. This is the one criterion of competitor analysis that you can never afford to let slide.

Price: The premiums you charge and the pricing tools you have available are often the most obvious comparisons to the competition. You need to know where you fit in with the tools you have available and the prices you are charging. The good news is that your clients are usually more than willing to share their opinions on this, especially when they consider your prices to be too high.

Products: This is sometimes forgotten when a company compares itself to others, but there can be a wide variance in the products that are offered to your clients. You may have specialty forms and coverages or your company likes to stick to the basics. Are the forms that you use different from the forms of your competitors? How much capacity can you provide? What is your stance on terrorism?

Client Services: There are numerous value-added services that your company may provide. How does your company handle claims? Do you have a reputation for fair and expedient claims service? Do you have a risk control staff who can help the risk management efforts of your clients? Is your underwriting staff a pool of knowledge, a resource for your clients?

Automation: The insurance industry has struggled to maximize the benefits of technology. Some carriers have used automation to effectively boost their productivity or to improve the ease of doing business. The bursting of the dot-coin bubble has slowed many company's technology issues, but there are going to be numerous and significant changes in the future. It is important to stay on top of this issue.

Customer Service: There is no excuse for not having high scores in this category. Is dealing with your company a pleasant experience or an annoying one? Seemingly small things like getting your policies and endorsements issued quickly and properly go a long way toward presenting a positive image of your company. If you provide prompt, courteous service, your clients will notice.

Ancient Greek philosophy says to "know thyself" and Sun Tsu says to know your enemy. Turns Out, they are both correct. A key ingredient in the success of a competitive organization is knowing who you are and knowing how you fit in with your competitors. Only after you have done a thorough and honest analysis, will you be really equipped to establish a focused and effective marketing effort.

Michael P. Egan, a Best's Review columnist, is a property officer with Swiss Reinsurance Co., Philadelphia. He can be reached at [e-mail].