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.

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.

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 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.

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…..

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?

So below you will find a short report that I receive daily.  This shows policies that renewed, the average premium change and the percent increase;

Renewal Details by LOB

Now, showing you companies and names is something we shouldn’t and cannot do.  So let us focus on a few things;

1. Yes,   9 of the 11 policies so a rate increase.  None of them had claims or any other changes these are simply increases companies choose to take.

2. PUMBR stands for Umbrella policy.  Rare to see a rate increase with these.

3. Name ANY product in your life that you would allow the cost to go up when the quality of the product has not gone up?

So three perspectives and some notes

CONSUMER; Yes, this happens almost every year with most insurance policies.  Not with every company and not with every policy but with most.  Now think of the products you buy.  If the rate stays the same or goes down a little does that prompt you to switch?  Seriously, all things being equal if a company keeps the rate even are you leaving them?  What if on occasion they give you an unprompted discount?

INSURANCE COMPANY; Have you looked at how much you spend on advertising?  Have you looked at the acquisition cost of your new business?  Have you looked at the closing ratio of new quotes?  Have you thought for a moment and said: “you know, it costs us more to get new customers than to keep current ones…”  Or ” you know, we have been profitable on this person for two years, maybe earning $x from them for five years is better than earning $x +$y for two years or worse yet only $x for one year…”

What about your underwriters?  Think about them for a moment, they determined what people fit best into your system.  This is a big piece of their job  Problem here is that most preferred companies like the same people with only slight variations.  So in other words, your best customers have more options than you think.

Now factor in your actuaries; would having a customer longer give your more data?  Yes.  Should having more data help with your underwriting?  Well if it doesn’t you have bigger issues.

THE INSURANCE AGENT; Now we need to break it down two to three ways;

Captive Agent; So you only have one company.  You really, really, want to see your companies keep rates level.  If not you are pretty well screwed.  Really, there is no getting off that hamster wheel with just one company.  Keep buying all the leads you can and hope for the best.

BROKER; You are in the best position of them all.  Imagine you have 3-7 preferred companies, if you do it right you should be it a 98-99.5% retention rate.  Not to mention you should be closing on 70% if not 80% of your quotes.  Unlike the captive agent, rates go up you just move them.  Heck, even if they stay level you can likely pay attention to some live data points and strategically move households.  Remember a few things that we said already and some we didn’t

• any way we shake it out, it costs more to get new customers than to keep current ones