Incomplete draft from March 15, 2015. I could write this post, with very little variation, this week as well. That is a massive failure. Adding any more to it would be a waste of time.
The setting; a longtime customer is hit with double-digit rate increases two years in a row. First year can be absorbed but by the second they have had enough. The end result; YOU keep the customer. That is the goal right? Find a group of people who trust you and keep their business with you as long as possible. What happens? His $5500 premium drops to $4200. Yes, scary. In that he decides to save some money and drops an umbrella. We also move a child onto their own. So where is the fail?
Both are still accurate and both are somewhere between far from the truth and not enough. I’ve long thought insurance functions as much like a credit card or bank loan than what people expect from insurance. But, maybe I’m also abusing or misusing the word dynamic a bit.
But really, I call them Friends and Acquaintances;
“There are no strangers here, only friends you haven’t met yet” William Butler Yeats
A bit deep on Friends from 2015 coincides with a training session with some pieces that are a bit off
I’ve never quite fully understood the philosophy of “A, B and C customers….” In the sense that I completely understand what is being said; focus your time on energy to produce a better outcome. Great. But, on the other hand, when you see in insurance today can partially be attributed to widespread use of this kind of attitude.
Apparently, I forgot to hit publish in September 2013
Enough already, so sad that industry publications continue to write articles about direct writers (state farm, allstate, geico, liberty mutual, etc.) and how the independent agents are competing against them. Are you really? Maybe it is time for a solid look in the mirror. While you are at it maybe you look at your business plan as well.
Some things to consider;
1. Do you really want their customers? I like leftovers but my wife is a great chef. Her leftovers are the only one’s I eat, I’m not interested in anyone else’s. The lesson, focus on what you want instead of what they do not want.
The overall financial system we are in is fascinating. Tough to say that the good the insurance piece of this system is helping or hurting more. Yes, it allows entrepreneurship to flourish. Yes, it is the underlying fabric of the entire financial system. But, on the other hand, we do a lot of work in the personal insurance and micro-commercial space(think 1-5 employees 6 but rarely 7 figure sales). This is where you see the dysfunction shine.
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;
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;
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.
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.