Commoditization of insurance is a good thing if;

As an agent you: 1. Have a lean business with good profitability.  This puts you in a better position to handle market or government based price changes. 2. Understand customers pay you not companies.  Your customers write the check then the company writes a check to you.  Without their money the companies do not get money and you do not get money.  Who is the most important in this equation? 3.  Have a strong “win win” relationship with your customers.  This will give you the benefit of the doubt in certain situations and will create a longer relationship.  Longer relationship will typically be more profitable.  If your customer is loyal and believes they are more of a partner in your business who cares if it is a commodity you aren’t!

As a company you: 1. Have a consistent underwriting philosophy and do not try and play a hot piece of the market for a few years just to grow.  Get good at what you know and make each dollar as profitable as possible.  2. Value your customers.  If you have whatever you consider a good risk KEEP IT do not let it go make an effort to make them feel appreciated.  3. Created Loyalty.  Give them a reason to trust/love/pay you don’t just say they do.  Give unexpectedly, don’t squander unitended loyalty of a long term good paying claims free customer.

As a purchaser you: 1. Make an effort to review your insurance every 12-18 months.  Give your agent first try and if not happy find someone else there are plenty of us.  2. Don’t listen to your neighbor/friend/family member about what they heard ask a professional. 3. It is not necessarily a good thing to save $500 on your insurance.  $200 is a market swing, no big deal.  $500 with no dramatic changes(tickets/accidents falling off, removing coverages, taking a driving course) is not a great thing.  Enjoy the money but hope for the next year or twenty that the rate stays the same or goes down slightly.

My opinion of course…

 

One thought on “Commoditization of insurance is a good thing if;

  1. Pingback: It is what it is they are what they are…. : One Percent for the Planet

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