What to expect

Most blogs and news sites have a theme. If you dove into the 100+ posts prior to this one you would see that most are about insurance. But, unlike most insurance companies or insurance blogs I went well beyond “take a higher deductible” “pay in full” “shop around” etc I took many other angles and tried to explain some of them for you.

So, What to Expect? Mostly insurance talk with a mix of some overall business ideas and philosophies to give the reader a sense of me and what could be coming.

One of many challenges in insurance is although everyone is the same, or at least on the surface looks the same, behind the scenes is much different. But, having helped 1000s of people buy insurance, you learn a few things.

Will some of it be repetitive? Yes. But keep in mind there is only so much you can talk about with auto and home insurance and most of it doesn’t need to be spoken about. Why? Because you have ALOT going on in life and should be able to rely on professionals to make some decisions for you.

So, until the next post which hopefully brings some despair and enlightenment.

18 years, now what

That’s right, I started 11/11/02 but it took about 4 months of training before Ralph became my first customer.  I’m not sure what Ralph is up to, and honestly, I have lost touch with 1000s of Ralphs.  Hopefully, on some level, I can get better at keeping in touch with people either directly or indirectly.
Although I am certainly better at keeping in touch, what I am also certainly better at is helping people buy insurance.  Has insurance changed over the years? Of course, the world evolves and so has insurance.  But, not every broker has kept up in the same way just like not everyone prepares for the future in the same way, studies the same changes, or values the same things.
The role for me and whoever is working with me is the same; Help people buy insurance.  Ideally, we help you spend less and get more or get more and spend the same or otherwise fill the holes your current plan has and make the improvements you want to make.  
Although I am far from perfect, the way I do things seems to work well.  Based on the policies I tend to replace, it seems like not everyone is doing things as well as they can.
So, please consider getting a second opinion on your insurance and just maybe getting it with me.

17 Ideas

Discovered in while in the midst of an extensive self audit. Written as a list of lines that I likely expanded on at some point but could not locate. Here goes;

Talking piints via something I labeled “Big Picture Marketing” but didn’t date.

  1. Is your coverage as good as your agents?  I suppose it doesn’t have to be.  I also think we all have a shot at winning the lottery as long as we buy a ticket.  But, your agent better be able to sign their name to it like it was their own. They should be doing all they can to get as much value out of the dollars you’ll spend as they possibly can.  The sentiment among many new entrants, and sadly they are very public about this is “ but we give them choice…”  Cool, so do I; work with me or not work with me.  My other response is; great, can we please see what coverage you choose yourself?  In other words, and this will vary by state, if that car hit your and your family was impacted, would you be happy with the choice you let them make?  
  2. Lets use your insurance dollars efficiently.  Simple sentiment, but often overlooked.  I have a AAA motor club membership.  Why, even if “it’s only $8 a year” should I have towing and labor coverage on my auto insurance.  Bonus reason; did you know that your towing claims can actually have a negative impact on your rates.  Yup, they can.  Maybe you cannot pay in full, that’s fine.  But, am I giving you options?  Maybe an auto debit from a credit card or checking account works? That “savings’ may just help you apply those funds to another household expense or improvements to your personal insurance.  Think about deductibles as well.  The math sometimes stands on its own sometimes it doesn’t look like it does unless you think about it.  So ask and think.
  3. Bringing the unexpected to the expected.  Can be a long list can be a short list but PLEASE have some things you do or say that will “delight and surprise.”  I offered an option to save money on a policy and the insured sensed that my enthusiasm wasn’t there even though the math was. I was honest and they were appreciative.  Have you ever told someone to NOT buy from you and instead sent them back to their underperforming and maybe  ill prepared agent armed and ready to improve?  I have, and it feels wonderful.  Not quite like having them hire you but it is a great way to make friends, make a positive contribution to the world, set up a future sale and referral stream and improve an industry that needs it.
  4. Creating a predictable and consistent expense.  If you as an agent routinely use company sponsored lines such as “ well everything gets more expensive,”  or, “well those storms in ____state have an impact here…” or “ well cars are more expensive to fix” etc.  PLEASE STOP NOW. If the cars are unchanged, there are no tickets or accidents, no home claims, material costs are sort of level, you can make some effort towards keeping premiums level. Feelings and people also change, they may be ready for different deductibles and coverage as their life adjusts.  The key is knowing their lifetime value to your company, or any insurance company, will far superceed any “loss’ in short term commission.  Residual income, consistent, predictable revenue and profits are the envy of many in any business.
  5. I am “insurance for insurance.” That is exactly right and I hope you, your co-workers, your call center people, etc. can say the same.  The policy should be written at a solid, above average level.  And, as I’ve had to adapt to saying to people “you really don’t want or need me for many basic day to day scenarios.”  It’s the truth, and giving 100% during any of these is important but self defeating.  There are lots of reasons you want a broker as part of your world.  A HUGE one is because they have seen lots of scenarios that you likely haven’t.  That way, when yours does happen, because you trusted the system I have built, instead of contacting me when you need to change a billing method or your lazy car dealer is messing things up, you save my time for when you need my brain.  I am the insurance policy that comes with your policy.
  6. What if simply saying your business has a BOP and workers comp and disability and buy/sell life insurance and business auto, blah, blah….  Instead we simply strove to make your business look like a turtle shell is over it.  Look at a tortoise shell, seem to be a series of interconnected squares that form a massive layer of cover for the turtle.  The shell lets it focus on what it is doing.  Each piece “fits” kind of like letting your broker look at ALL your policies in tandem to find holes and efficiencies.  Not to mention it is likely more convenient.  It also helps whe budgeting.  Knowing that today you are good with paying $10,000 per year for all your plans is tremendously valuable when the rates on two plans go up and two go down.  But, the cost of the “shell” is still intact. 
  7. Reviewing your insurance ALWAYS creates a positive outcome.  Period.  “but Billy my rates didn’t go down.” Instead think of it that  we looked at ten companies, and if you still have the best rate things are likely very good.  Built within that scenario is the good news that despite your horrific driving record and a claim or two, your company chose to not raise your rates and even retain your business.  Of course it is better for me when I can find you more value and a lower rate which of course is a great outcome as well.  If there is a time when reviewing insurance doesn’t create a positive outcome, I have not found it.
  8. If you are paying an insurance bill, pay this insurance bill. Said with a smile and sometimes a little laugh.  Why? Because insurance is mundane, routine and boring.  It was never and doesn’t need to be sexy.  So stop trying to get headlines and look like click bait marketing.  Now, that doesn’t mean don’t have fun and be clever from time to time.  What it means is there is nothing wrong with being a human being who happens to  help people buy insurance.  And, along the way, make new acquaintances that may become friends.
  9. Buy inexpensively, not cheap.  Think of The Dollar Store versus TJ Max versus Macy’s.  Three very different experiences who mostly serve different audiences even if there is likely a low double digit of people who will semi-regularly visit more than one of these.  The point?  Tell me where else in your life you are out to buy “cheap.” Instead consider buying with a focus on value.  Would you pay a little more because  it was convenient? Yes.  On the other hand, if you have a choice of two roads that run mostly parallel.  One has tolls the other doesn’t.  Sure, it’s ice to save money but what if the road without tolls would take you 20 minutes longer?  But hey, you saved $2, or did you?  The connotation around cheap is terrible, do you really want your brand associated or known for being cheap? I cringe when introduced as “ the guy who saved me a lot of money..’ Even if I understand their heart is in the right place, I failed. 
  10. CHOOSE to lower your costs.  And yes, there is always a choice.  Choose to be someone that looks at the big picture and provides as may ideas as you reasonable can to help get to this outcome.  You’ll be surprised at how often your advice and ideas are dismissed.  But, this will only happen if you are seen as valuable.  On the other hand, Be aware of the person who makes it very known that they want to save money, lower their costs, etc. As long as they don’t need to do anything.  They have no interest in higher deductibles, saving less today to save more tomorrow, not wiling to do a driving course or similar eventhough it is guaranteed savings.  Forget auto payments, eventhough they can pick the day, the card, the account, etc  The person who wants to lower costs can and likely will  The person who chooses to lower their costs and dos things to help, will be and likely remain a better customer.
  11. Buy insurance because It makes sense, not because you have to.  Again, much of this is the mindset the consumer brings but also the mindset and attitude the agent brings to the table. Sue, your bank is making you buy this.  Yup, I understand the state mandates auto coverage. On the other hand, a rough average of the cost of a million dollars in umbrella liabity is that $1 buys about $6,667 in coverage.  An auto or home policy an have a similar per dollar of coverage which mathmatecillay and ethical reinforces the pennies buying dollars concept.  The value may never materialie but the peace of mind better be.  Buying insurance is responsible.  Buying insurance helps others buy insurance that may benefit from the coverage.
  12. Its like insuring a home to replacement cost versus market value.  This is a MASSIVE opportunity for improvement on all levels.  Huge chance for property carriers to collaborate, if even just for a little bit. “  But Billy I own my land.”  But “Billy, the basement will be here..”  Yup, I get it.  Remember, we call it home insurance but the truth is, the policy really just insures your house not your home In fact, if you needed your policy and its coverages, your home will likely be very negatively impacted
  13. Do you have great insurance or cheap insurance?  Hopefully neither, especially since I am not even sure how you would measure either.  And, Insurance is important but inherently not that much different than other purchases.  You are likely better off not buying the least or most expensive
  14. Are you using your insurance or is it using you?  This is tricky but happens.  Are you spending money on coverage you don’t need?  Yes, there are times when you are doing this, especially when you are duplicating coverage that exists elsewhere in life. It is a very careful thing, and often inaccurate to say someone is overinsured.  But, this often means no one explained deductibles to you and you have a lower one than what makes sense for you.
  15. Are you reviewing your insurance or did you get a quote?  I suggest reviewing instead of getting a quote.  Besides, I can hand out quotes all day.  Are quotes accurate? Not often.  Likely a 10ish% swing.  Just ask a contractor who doesn’t exactly know what’s behind your walls until they open them. Also, when reviewing insurance with someone, it sets the tone for being more engaged.  For not just handing me numbers so that I hand you back lower ones.  On the other hand, if you choose to leave me, at least I know that other agent better be bringing their “A” game. They’ll often be writing a better policy than they previously have.
  16. Is your company screwing you or making love?  Not even sure that I like this word combination but currently struggling to get a better one in here.  It’s essentially the same act but done in such a way that one way indicates caring and partnership and the other, not necessarily, even if the result is the same.  Fact is the result is likely not the same even if say 75% of the “transaction” incudes the same things.  The point is, at least find an agent or a company, preferably both, that WANT your insurance.  They WANT you as a customer and seem to show it in other ways.
  17. On the topic of older cars; Do you know what your throwaway number is?  I have a niece who may need a car soon.  And weekly, if not daily, we have a couple of adults putting a younger driver on the road.  Whether rates or good or bad, I will not be able to solve. But, what I do know, is that the comprehensive and collision make up a large portion of your cost.  People often overlook 1) how little damage $1000 actually is on a car 2)The value to filing a claim for a small amount, “because you can” is actually negative in the long term 3) you must know that there is a large “cash version” of the economy where the prices are different And of course there is the math involved with buying comprehensive just to get glass and towing because the math is beautiful

On Insurance Rates

what now

After seeing an insured go to the national carrier they are with and lower themselves from our minimum to the state minimum. 

Completely understand this younger person who needs to drive to work, pay other bills, etc.  On the other hand, 8 of our 10 options would not offer a rate so he is left with 2 of our choices and maybe 2-5 others elsewhere.  Now, we have a woefully underinsured driver on the road because this is what he can afford. So, his carrier is doing what they can to take on some of the riskier populations.  But riskier is relative to the criteria they are basing rates on.  Charging for driving infractions versus for paid claims.  But, those other 8 companies of ours, not to mention a few dozen more will then shoulder the cost of the property damage from any claims he is involved in, not to mention the potential for large medical bills.  As I learned this fall, it is very likely, in the event of a claim that exceeds the property damage, the carrier that pays it can then sue, garnish wages, etc.  None of these are positive.  None of these are healthy for the finances of the overall population.  None of these are good activities for expense ratios. But, if a contract is not enforced, if consequences for bad choices are ignored, where are we left?
We’re left where we are now.  With companies who may or may not know who they want to insure.  Then, they apply data to that uncertainty and it seems to be when in doubt, apply a higher rate.  But it gets better, see when they cannot afford that higher rate and then cancel that policy, the new company can choose to negatively impact the rate for this person. This now locks them into a typically higher rate for another six or so months, maybe longer.  Not good for anyone.
Now, in theory, they could have provided him with coverage and collected premium, maybe secured with a telematics device?  What if we took a longer play and said, you know, this person fits all our criteria and seems to have had a rough stretch 2 years ago.  But, no claims were paid out and there were no accidents reported.  Looks like he/she is in college and engaged now(we know because we are using data confidently and to the benefit of the customer, not the carrier) maybe this is a person we should work with?  

No solutions, just concepts that can be used better.

Genuine vs. the Algorithm

Marketing should supplement and promote genuine value not disguise the lack of.

Right now it seems that way, but somewhere in my reading and listening, I again heard what I already have known for a while now; You do not need to adapt to AI, and similar data ideas, but the agents/brokers/companies that do will survive and thrive and those that don’t, won’t.

So combine that with the following things stuck in my head from various reading and listening;

  • Sending out a birthday card is awesome and there are services that do this
  • Who is killing it on YouTube?
  • You must contact your customers 24-36 times

On Birthdays; Mrs. B is the mother of a childhood friend of my wife.  Each year a birthday card shows up for our children and I’m not even sure that she has met our children.  Handwritten.  Maybe she uses an electronic calendar, maybe she doesn’t, but it is real, handwritten ink and genuine.

Has Facebook ruined the birthday greeting?  I mean they remind you about the birthday and they even tell you what to say to the person.  I suppose technically the person “said” happy birthday to you.  Maybe you were even overwhelmed by the “love and the messages…..” But how many of those people took the 5-30 second to personalize it?  You can say the same thing about changing jobs or posting an update on Linkedin.  And yes, if automation is becoming more and more a part of what we do, those that use it better will stand out.  So, sure, a physical birthday card from your insurance agent showing up at your home is nice, sort of.  If you did it merely to keep in touch as part of a formula, is it?

  • Is it really just a self-serving act following a desperate formula to combat an already “noisy” world?
  • Is this just one touch of a formula?

Sure, you are combining data with a pseudo genuine act.  But, you are using what is considered an important, almost sacred, milestone and demeaning it into a marketing activity.

Killing it on YouTube

Cool.  Excited for you.  Especially if it is a goal you set for yourself and now you are accomplishing it.  On the other hand, what aren’t you doing?  Certainly, all that time recording, editing, posting and sharing takes away from other activities.  But, hey you are feeding an algorithm, good for you.

So, I’m confused.  You are recording a video to bring value to others?  Cool, in theory, your video will get to more people.  So the next question, and you need to choose one;  The person that calls you because they watched a video or the person who called you because an existing customer told you about them.  Choose one.

I have no doubt, just like this post, there is value in being found online.  But are you doing the right mix of activities to be found and activities to be valuable?  Be honest, the information you are writing or recording, likely already exists.  Sure, there are new ideas, but not when it comes to talking about the basics of auto and home insurance.  So, you want them in your voice, fine.  But what if you did something new?  What if you were really honest, I mean honest enough it likely annoys some of your partner companies?

Where is the person “killing it” in flood insurance?

Where is the agent who has an amazing internship program?

Is there an agent “killing it” with AMS360(or whatever management system you use)?

Need more ideas, consider these places to be of value immediately that will have positive results but may not simply feed an algorithm;

  • What is your plan for flood insurance?   HUGE changes have begun and will continue.
  • IOT, aka The Internet of Things. Have you tested any devices in your home?  How can they help your people?
  • Telematics; an app vs. a plug in?  Thoughts?  Are your encouraging use of this?
  • What have you done to help your carriers today?  Hint, they don’t need, and many don’t even seem to want, another policyholder?
  • Using PayPal in your agency?  Have you seen them on a carrier yet?  I’ve only seen one.  Why?


I think my dog appreciates me

She does. She can’t say it but she shows it, at least I think she does.  Maybe the world needs a better guide to “working with an insurance agent.”  Here are a few bullet points from 2010.

This is closer to the truth than what I say to myself every day; which is that our customers appreciate us.

Comes on the heels of a bit of a rant between myself and one of our team, in front of a newer member of the team.  In the same stretch where a few customers have left that has been a bit tough to comprehend.  Sure, people leave, it is part of the business.  Even if the 25% rate increase is the cause it is always your fault.  Even with a backlog several weeks long and the ability to be overwhelmed with new people, losses sting.  But, we keep going forward.

The problem with reading a lot and the “current content, content, content,”  and ” please don’t forget me even if I am not worth remembering”the world is sometimes ignorance seeps through and people are writing to be seen not to convey information.  This is somewhere in the middle.

Most people have no clue or interest just how murky it is behind the scenes of auto and home insurance.  I read about a merger last night and my very first thought of the 9 billion dollar merger was “I hope that company can now figure out how to stop mailing EVERY document to us.”   But, as usual, the direction is forward.

The article of the week was two silly insurance companies, one old and one new, spending money on advertising instead of on their customers.  With the old one also using a B-List celebrity and a couple of NBA players to make their “point.”  In quotes because there really wasn’t one of any value.  Just another example of insurance dollars being spent frivolously.  Oh, and there is actually no way an agent, whose primary compensation is commission based, can spend that much time on claims.  Especially if working for a captive carrier.

And, appreciation is not the point.  Built into our system are several procedures to eliminate things.  Namely, even though the losses sting, our flow of new business far exceeds the people leaving.  And, even having this, we have other procedures in place to reduce the lost customers.  Both of these and their sub-elements work and work well.  And, as I said and will continue to say, we need to have enough pride that it stings, momentarily, and then shrug our shoulders and keep going.


It doesn’t matter

On one hand, it feels slightly good that stuff I was writing about 3,4,5,6, 7 years ago is still valid. On the other, it hurts because that means things haven’t improved much.  Like this call for an honest explanation to rate increases

But what if you could fix one thing?  What if there really was a mission or directive that came down from all the lobbying groups that double as professional associations.  And that directive was, we want to see a massive increase in our market share versus that of captive companies. Well, first let us take a side turn, captive agents are dwindling and their market share will as well.

FACT; Many of the largest advertisers are “direct” by label only.  Their agents are allowed to broker business.  But, first, off they have a captive as their backing so they get the label.

So the one thing, and of course, writing this post doesn’t matter either.  I also have a severe distaste for use of absolute type words and phrases like “best.”  Since many times it cannot be accurately measured and proven.  But, for the sake of clearing my brain, it is rate increases.  Period.  All of them.  And not to be a conspiracy theorist, but we could make a case that companies use rate increases to limit the growth of their agents.  How?

The typical household that everyone wants; two adults, long time home ownership, no claims, degree, no dogs, above average credit.  Sees a $264 increase on his package.  No increase in value, no prime music or video, no free shipping, just an increase.  **Skipping several paragraphs over some proprietary stuff***

While I am trying to explain this and keep someone happy I AM NOT BRINGING IN A NEW CUSTOMER.  That’s it, that simple.  You are forcing me into a service that provides only imaginary value since it is simply making a wrong, slightly less wrong.  Maybe the math justifies it, you keep a customer at a higher rate and that new profit line is equivalent to what you would have made on a new customer?  But I lose in that scenario and SO DO YOU.

This goes nowhere, rant done, momentarily defeated.

Awesome marketing opportunity

But it is in disguise.  See, everything can be classified as marketing or in it’s subcategory branding.  This post, even this post from November 2011 updated in 2015  

I could use words to rewrite the same things today and it would be valid, and also useless.  So, let us use words differently and simply make a different point based on the same thing.

  • Your rate increases allow us to build our brand stronger while weakening yours
  • Your rate increases prove that you have no faith in your actuaries and your distribution methods.  Could even say a lack of faith in your capital investment strategy
  • Your rate increases show a complete lack of understanding of how word of mouth works.  It’s been publicized many times and, although I think it is tough to prove, negative news travels faster.  This is a societal flaw.
  • Net Promoter Score is a useless measurement created by professors and marketers.  Here is a simpler measure; If you have 1000 customers, are you receiving at least 500 referrals a year?  Simple, shouldn’t half your customers think enough of you to share you with friends?
  • Still firmly believe that one of if not the biggest and boldest marketing moves is to freeze rates for 12, better to do 24 months, and advertise the heck out of that.  You’ll simultaneously prove that price optimization is awesome when used correctly and add huge amounts to your top and bottom line.

Oh, and I have been operating this way, mostly successfully, for 8 years.  Sure, some of this is theory, but most are already in practice.

The replacement cost dilemma

November 2010, updated May 2015, still is an annoyance that happens once a week.

And it really is a dilemma.  I’ve likely written before that I have 20ish options for insuring a home and all 20 have a different idea of what the same home will cost to rebuild.  Scarier than this, is that several use the same backend system that determines the replacement cost.  But, there is nothing particularly “sexy” about this topic so maybe that is why it doesn’t get much attention.

I suppose this is what happens when no one is quite sure of the answer.  It has elements of collusion since home insurance may be the most underpriced line of insurance.  And, “odd” as it may be, if you compared replacement costs from ALL carriers, they would be likely significantly higher than new cost construction.  You’d also see that, with many companies, you actually get a credit for letting them increase your coverage but this credit doesn’t offset the rate increase, it just masks it?

Going to reframe this a bit…..


Time to adopt

Original publish date of October 15 2015

” Why would you give an insurance company more data when they haven’t figured out what to do with what they have?”

I’m giving myself credit, I still believe in one what I was writing three years ago, now I just know more.  But, although our methods are better and new tools exist we just haven’t found the blend yet.

To frame this moment, I just caught up on Lemonade’s transparency chronicle and read a good piece via the Washington Post about home construction that survived Hurrican Michael.

Where is this going?  Well, I won’t allow it to go to a place of frustration.  What’s the point? Nothing good will happen there.

  1. Why does it seem like most insurance companies are not interested in growing the top and bottom line?
  2. Who is the bigger culprit in this; 1) the attitude in the C-Suite or 2) Actuaries or 3)Something around accounting and taxes?