Moving Words – Best

Timothy Brady

“Being the best at whatever talent you have, that’s what stimulates life.” Tom Landry

When the comment’s made that a mover needs to provide value to his/her shippers and corporate accounts, we usually think of the services we provide and how we can add value to them. This is a very important aspect of any moving company’s strategic objectives. But it needs to be taken a bit further in the “How do I achieve more value?” discussion.

Ask anyone who’s a craftsperson in any discipline, be it furniture-making, quilting, interior painting, or building a house: the value you’ll end up with is directly relative to the quality of the raw materials to create the project. The next step is how carefully you assemble the materials into the finished product; or the old ‘measure twice, cut once’ approach. Finally, how well you build the foundation will determine the strength of the entire project in the end.

Now apply this directly to the moving and storage business. Let’s take insurance as an example, one of the biggest headaches many movers face. And it’s one of the major costs of operating a moving company. But is the cheapest insurance always the most affordable? Not necessarily. Here’s why.

You want to be very; very careful the insurance company you use is A.M. Best rated, to a minimum of a B+ rating. The reason is the vast majority of corporate accounts won’t accept an insurance company’s coverage if it doesn’t have at least that A.M. Best rating level.

To explain, there are three different ratings that A.M. Best provides grades on:

Best’s Financial Strength Rating (FSR) – an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contractual obligations. This rating is assigned to insurance companies.

Best’s Issuer Credit Rating (ICR) – an independent opinion of an issuer/entity’s ability to meet its ongoing senior financial obligations. This rating is assigned to insurance companies and related holding companies, and other legal entities authorized to issue financial obligations.

Best’s Debt Rating (DR)– an independent opinion of an issuer’s ability to meet its ongoing financial obligations to security holders when due. This rating is assigned to the debt securities and insurance-linked securities transactions of the entities rated by A.M. Best.

Many shippers and corporate accounts want to be assured that, if necessary, the moving company’s insurer has the financial strength to back up the coverage they provide. A.M. Best Ratings are not a warranty, nor are they a recommendation to buy, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor do they address the suitability of any particular financial obligation for a specific purpose or purchaser. But they are what many of your customers and potential customers use to determine if you’ll be an authorized carrier for their shipments, thus adding the needed value – above your competition.

For insurance companies, a Best’s FSR, ICR and DR are strategic tools that can enhance you and your customers’ confidence in the insurance company’s stability, as well as its attractiveness to investors. A rating also enhances an insurer’s credibility with reinsurers – a valuable resource, particularly for insurers entering new markets.

What does it mean if the Insurer comes back with a ‘Not Rated (NR)’ in any of these three categories? The Not Rated (NR) designation is assigned to companies that are not rated by A.M. Best. Using a Not Rated or low rated – below a B+ – insurer can put a crimp on who you can haul for and the revenue you can generate. So make your choice wisely.

A moving company must make sure the highest value is achieved by the different outside services that he/she incorporates into their operation. Again, referring to insurance as an example, you find an insurance company for your carrier with a rating which will furnish the greatest value to your customers. Then include that cost of insurance when calculating your hauling rate range.

In this way you will be the “Best” you can be.

“Business is about being the best that you can be, and there are always glowing examples of people that we can all learn from.” – John Caudwell