Insurance and Time math…again

So I get a call from someone at a fairly large, established agency.  Had a few questions, was trying to “help” someone out.  Nice enough, but not necessary.  I appreciate the effort, I really do.

About two hours later I was on the phone with a new friend(some say client/customer) and was binding their policies.  Could be coincidence that this person was with the same agency that the other agent worked at…or maybe it isn’t.  Lets dive a little deeper;

The most powerful paragraph in insurance

AKA  My and the Insurance/Banking industry’s simultaneous biggest problem and opportunity

AKA What #insurtech should be trying to solve but outside of me and maybe some people I have not found yet, is not.

Really it is two paragraphs.  One that comes from a standard document that you’ll find in your policy forms. Yes, I know you likely do not read them.  Also, the version in your state may be different.  The other is a direct quote via an email.  I see or hear variations of the second one every week.  So here goes;

Eough of the one sided white paper

So here is the bigger thought, also known as the cure to the industry that is directly “under your nose” ;  Before doing another white paper or survey or some other silly thing to get press, STOP AND THINK. Ok, now that you have done that go get your auto and home insurance plans.  ****This is geared towards the middle portion of America, the basic “vanilla” risk.  What is that?  You are a simple, easy to classify risk.  Meaning you own 1-3 cars and have one residence.  Simple, straightforward; no rentals, no crazy collections, no motorcylce, atv, etc.
Now, do a review of your plans so you have a baseline.  Now go to TheZebra, Coverhound,, etc and see what their baseline is.  Do the same with a couple of directs; State Farm, Liberty Mutual, Esurance.  Do you see it now?  Should be right there, pretty simple.  Paradox of choice at its finest.  Now, you can take this a step further and actually call 2-5 human beings.  KEEP THE FOCUS on the coverage.  Watch what happens.  Now do you see?

Dear Microsoft,

Dear Satya,

YOU Ran An Update and it f’d my day up.  See at 6pm on Wednesday we were all good but when I got back on at noon Thursday we weren’t.   What happened?   Your update happened.   Now I am out 5 hours of time not to mention will pay $100+ toy support team.  Yup, double wammy.

Now I had to fix this but what dawned on me was this.  You screwing my computer up is a problem but not as big as this.  I work with insurance companies whose websites ONLY FUNCTION on Internet Explorer.   Not Edge not Chrome just an unsupported browser. Scary, scary stuff!!

When the system breaks

I lose some sleep and wake up thinking about yesterday’s “loss.”  Not really a loss more like a time where everything seems to match up but it just doesn’t.  Everything is there;

  • was referred by a trusted person(is there any better way)
  • has been with me a few years(yup, 98+% stay)
  • had actually met in person(shocking but happens)
  • helped with a non-insurance thing(helped get one a job)

So you go into the renewal time ready to follow the plan and this time it doesn’t work.  Factually the overall plan always works.  But, within that plan, sometimes the sub-plan doesn’t get the expected result.  Take the other set of circumstances;

Claim Economics

Had a call about a claim this weekend.  No big deal, part of the business.  An awful, annoying and very, very broken piece of the business but part of it.  So the usual;
Is everybody ok?  Yes
What happen?  other person hit me, admitted fault and police were called **REAL good news but must be handled properly**
Then what?  Call the other company, not yours….
Etc. etc. More posts here and here and here

Here is what I thought about though.  Both companies have the money ” in the bank” to pay this claim.  So what do they lose?  Well they plan on this anyhow and the reality is, if done correctly, it is really just a marketing activity.  This is your chance to jump over price and cement a relationship but instead both the paying and the non-paying company will likely negatively impact both the person who is at fault and who isn’t.

Baffled by the economics of this since we have already committed a lot of money to an underwriting philosophy that made this customer one that we want.
Baffled at why an industry would allow the occurrence of one claim where a person was deemed completely not at fault to override several dozen other factors.
But, then again, this is likely just another example of how having clear goals, appreciating humans and allowing morals, ethics and philosophy to blend with technology is really just the next frontier.

Things for Insurance agents to consider this year….or any year

1. If you work as part of a larger agency; Are you builiding your business or someone elses?
2. What is really a “fair” split on commissions?
3. Why am I more focused on buying leads instead of cultivating referrals?
4. What is the household and PIF growth I am looking for this year?
5. Would you settle for only one option anywhere else in your life?  Than why are you only working with one company?
6. What is the last marketing book I read?
7. Am I regularly reading about marketing concepts or insurance marketing concepts?
8. Are you a part of someone else’s perpetuation plan or do you have your own?
9. How are you dealing with the changing consumer?
10.  The agent/broker has lots of control they are not using.  What about you?
11. Do you still believe in rate increases?  Are they really “a necessary evil”  or part of the business….
12.Are you taking advice and listening to people who have done things before or just people who write/talk about it?
13. If you are paying for some sort of label/qualfication is it really valid?  Was it earned?
14. Why are you not averaging at least half if not one referral from every household you work with?
15. Issuing an insurance policy(ies) is not enough.  What else are you doing for your customer?
Will you be surfing the wave of change that has started or being washed away by it?

Are you for sale?

So it is apparent to most everyone that Mergers and Acquisitions are on the rise in the insurance world.  Soon enough they will have a MASSIVE impact on my piece of it; the independent broker channel.  I’m sure in some pockets it has already started.  Fact is the industry and the American public will be better off with less independent agencies.  Many existing brokers have not ” kept up with the times..” so to speak which reduces the overall customer experience, gives the insurance companies to much power(which most are not using wisely) , reduces the ease to entry into the business and creates where we are today; Non insurance people entering to take over.

Maybe the insurance industry is just a reflection of society

Reality is this; insurance companies are run by other members of our human species.  They are also influenced by their surroundings both human and inanimate.  They are influenced by many of the same ideals, both positive and negative as the rest of us.  There is a lot of talk about “disruption,” #insurtech, #fintech, and #bigdata.  The industry is “ripe” for change, blah, blah, blah.

Yes I have many of my own thoughts, heck it’s my blog so of course they are my thoughts.  This dawned on me the other day;

Maybe the insurance industry is just a reflection of society.  But how?  In what way(s)?

Insurance Agency Math

Let’s say it costs less than $20 to acquire a customer(it should)  and most times can just be measured as a fraction of fixed operating costs since there is no official advertising expense?  Is this really possible?  Yes,yes and yes!!!

Even if we broke down all your fixed costs, which are hopefully almost ” to the bone” and put some slight variables in you are hopefully at a very, very manageable daily cost.

Is being hired by one new household per day unreasonable?  NO NO NO.  If it is, time to change business.