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.

Dear State Farm,

One thing that seems to continually bother me is when the wealthiest people and companies choose not to really do the world some good.  When they choose profits over people.  When they are genuinely in a position to change an industry for the better which will increase their profits and genuinely help the American public and they choose not to.  Baffled by it.

Why write today?

  • Because every time I receive another letter from you I wonder why another tree branch had to die.
  • Because I wonder why a huge company allows their product to be so diluted by advertising.
  • Because I wonder about the last time you or I calculated any savings in percentages.
  • Because I am wondering if there is anyone who can accurately calculate a discount on an insurance policy.
  • Because I am wondering why, in the age of specialization, personalization and niches you still send to “or Current Resident”
  • Because I am wondering why, if you are really a good neighbor, you don’t use local printers and mailing operations.
  • Because I am wondering why you are still using white envelopes when there is science behind using colored envelopes.
  • Because I am wondering why you use a standard #10 envelope when you can mail one twice the size for the same cost.

Oh, and your copy stinks.  Seriously, do any of your agents have enough time to “take a long, hard look at all the possible ways you can save….” Really, if you are still combing through policies you have bigger issues.

But then again you are the largest insurer in the U.S.A.  You also have fifteen agents within about ten miles of my home.  **That is scary**  What do I know.  Either way, thanks for reading.



Billy Van Jura


Disclaimer; There is good and bad in everything and advertising/marketing is no exception.  We are reminded of this every time we open our inbox, our mailbox, drive around, listen to the radio, watch T.V. etc.  I suppose the other side of this is that the lazy, spam like advertising perpetrated by many companies actually makes average advertising look good and good look great.

Google can be awesome for Insurance

So I stumbled onto this article with the headline “Google’s entry into insurance should frighten agents”  I am not sure that one statement could be further from the truth.

Disclaimer; I was not in the room when these comments were made.  Like most articles there is limited space available and the reporter must choose what to write.

FACT: The insurance industry is old and not nearly as technically advanced as most of the places you spend money. Think of Amazon and Zappos

FACT: Google has a lot of money and a lot of smart people.

FACT: They are buying a pretty cool operation, The Coverhound, with a reasonable base in place.

Now for the educated opinion that I can back up with facts and actual experience.  If you are running a lean or even relatively cost efficient operation, have taken care of people and have hired correctly you will MAKE MORE money with Google in the insurance space.  If any of those three pieces are not going well you have a small window to fix them.   Also, technology improvements may be on the way soon.  The problem here is if you have not adapted to technology along the way it may be to much for you.  Google may just fill in where many of the larger brokers in the P&C world have failed consumers and the industry.  Maybe their muscle can force the meaningul and easy change that can happen almost over night. So what exactly is there to be afraid of?  Consumer buying patterns have changed.  You should have and could still be a part of this.  That next level of drive by the mile and telematics will come but you have 2-5 years still to take advantage of things.

Then I read this quote;

Berkley said, “We are a bunch of cheap son of a guns. We don’t spend on anything. We’re just bums, companies and agents both. We don’t invest in the future. … We have these meetings and talk about what to do. It’s always in response to what’s going on around us instead of sitting here and saying — ‘Where is the world going to go? What kinds of things should we be doing? How to make it better?’”

Now lets put some context to this; he runs a company with 6.4 billion in revenue.  That company may be in as good as a position as any to capitalize and likely double revenues, if they want.  Sad but predictable that an old insurance company would think this way when obvious solutions are right in front of them.  Also sad since with their market share they are in a position to force technological change and choose not to.  Maybe it’s time for Berkley to be a leader instead of a talker.

Bottom line is this; if you are an agent you should be THRILLED that Google is likely entering the world of insurance.   It is an awesome opportunity that if you want it to will increase your profits, insurance company profits and make for a better consumer experience.

Want more revenue? More market share? Shrink the available pie

First draft, part 1 of about 12

**Written for my counterparts who consider themselves Independent Agents and Insurance Brokers***

So I regularly read a publication called Rough Notes.  Kind of interesting, some value each month.  They do a pretty neat thing each month, they publish a brief article from a much older issue.  The one that caught my attention was titled “Producing New Business to Balance Cancellations” It’s a topic that I have been working on for over three years.  Fascinating one to me and actually I have my own soluton.  More on that later.

So this piece from 1965 is 100%  relevant today.  At least as a topic.  The article is heavy on quotas and sales meetings but the reality is the underlying theme is correct.  What if this was not a problem?  I tend to read a lot.  Much of my reading is geared towards business, marketing, self development, etc.  Now where it gets interesting to me is this, when I read on insurance I tend to continually run across articles on how to use social media.  How it will help them grow business, etc.  Much of it is very timely, very solid advice.  Keep up on Facebook, Twitter, Blogs, etc.  Produce content, get likes, etc.  I’ve seen some really good stuff on Facebook Contests, etc.  All, to some extent, relevant.

BUT why is all the focus on how to “compete” with the direct writers?  WHO CARES?  The only person to compete with is your agency.  I’ve written this before and heard some amazing podcasts on it, direct writers and call centers CANNOT compete with a well run agency.

WELL RUN; That means keeping your expeneses in tact.  That means taking care of your agency employees so people actually want to work with you long term.  That means getting into H2H business not B2C not B2B. *  Yes, saw it on twitter and really, really like it;

Embedded image permalink

So what’s that mean?  Well you can look it up and see that there are about 121 million households in the U.S.A.  To keep things round, lets assume that 100  million have at least one auto or residency insurance policy.  Now, in insurance many agencies have some focus on retention rates.  What they actually are versus what you are told could be misleading.  This article was pretty good.  So in the article it said 84% seems to be average.  So lets use that number in our example.  If agencies are keeping 84% of customers that means there are 16 million households in play every year.  WHY?  I have no idea.  But a big part of the problem is in focusing on getting new business.  Ask yourself this question; how much money are you spending on keeping your current customers and how much are you spending on getting new customers?  Seriously, dive into it.  How much does it cost to acquire a customer?  How long does it take you to turn a profit on a customer?  How many referrals are you gettting each month versus your response rate on your last marketing campaign?

So how about instead of  eating more of someone else’s pie, instead let’s focus on keeping more of your slices.  Besides, maybe that flavor is not good for you.  A couple of guesses, **I have no idea how to substantiate these** Of those 16 million that seem to be in play, my guess is half do not need to be.  Imagine that, the independent agent channel could hold onto 8 million households.  Now in my world that is at an average of about $2500 per household.  That means $20,000,000,000  in premium dollars doesn’t move.  At a conservative commission rate of 12% that means $2,400,000,000  stays in the hands of independent agents.  Oh and did I mention you’ll spend less than $20 a household to keep them?  Kind of scary.

Yes, it is possible.

Better uses for paper than this

So you,I and most households in america are inundated with not so good “advertising”  in our mailboxes on a daily basis.  This is also called “Junk Mail” and if it was electronic is called


So this showed up yesterday;



and I want to break it down a bit.  Since somebody killed a tree and likely did not use recycled content/paper

* If they did this is another failure of the piece; not mentioning something worth mentioning*

so the least we can do is provide it with some feedback.

1. It was sent by an agent who has been in business well over 10 years.  If just starting out, canvasing a neighborhood is not so bad.  If you have an existing client base, this kind of blind mailing proves how little you have kept up with the world.

2. If you need to include fine print in an offer(see the bottom, in orange) maybe your offer is to complicated or fraudulent or sort of like bait and switch?  Don’t give me the legal excuse, make it simple.

3. Seriously, is enticing someone with an artificially low rate still something people do?  Apparently it is.  Sad.  DO BETTER.  I do not know anyone who enjoys being deceived or discovering a “catch” once the engage you.

4. Oh and by the way, why are you still offering $300,000 in liability?  Seriously, read my note above, get with the times and offer $500,000.  Come on, does the agent who have this only have $300,000?  I hope not.

Bottom line, soliciting business by mail is alive and well.


Soliciting business by mail with boring, antiquated, unimaginative, dated, sort-of-fraudulent, non-value-adding pieces is dead.

Just some thoughts.


It is what it is they are what they are….

An awesome advertising company that happens to sell insurance.  Every week of the year your mailbox is likely infiltrated by a mailing from Geico.  Not always a letter, sometimes just an insert in something else but they are there.  The message is always the same ” How much could you save on your car insurance?”  They use that goofy gecko, a pig, a caveman, random “b list” celebrities, etc in order to try and get your attention in a crowded place and they do a really good job at it.  This is based on them recently being ranked the #2 car insurer in the United States.

So good for them!  They actually make it easier for me to stand out with a commoditized product.  The thing is they completely dumb down what is more often than not an important piece of a financial plan.  Let’s look at this weeks mail; 5 Important tips to help you save money on car insurance

1. Insure more than one car on  your policy;  Is that the best you can do for number 1?  Really, insure another car?  In many cases it is actually considered fraud to not disclose other vehicles in a household NEXT

2.Make sure your car is equipped with safety features:  Come on man(thanks CC)  you then point out Anti-lock brakes, air bags and anti theft systems.  2 of those three are basically standard features of any car 2000 and newer.  As far as anti-theft, the discount is so small since it is a percentage of comprehensive which is your least expensive coverage.

3. Find out if your alumni association, credit union or professional group partners with Geico.   Ok now you are offering something, nice play.  Enjoyed this for years at Liberty Mutual until I realized it was more of a marketing ploy than an actual discount.

4.Insure more than your car with Geico.  Great a multi-policy discount, how original.

5. Educate your young drivers, or encourage them to get their own policy.  Although I like this idea from an overall responsibility perspective there is a small chance of savings.  See do you think the 18-22ish year old can afford the rate?  If the parents still need to subsidize the cost where is the savings?  

My key take away on this and anything else Geico presents is this; They do what they say they are going to do.  They do not promise a solid policy, they do not promise great coverage they do not promise that this policy is a great piece of your financial plan.

Good for them, but most people want better value not better price.

Just some thoughts.

Not so common courtesy

You would think it would still be common I mean we are all good solid, human beings right?  Well of course we are, except from time to time we just do not act like it.  Call it whatever you want;

The Golden rule; treat others the way you want to be treated

I’ve also heard of the

Platinum rule; Treat others the way they want to be treated

Either way just be nice.

Share good feedback as often or preferably more often than you provide bad.

If someone just did something good for you, let them know.  If they could have done better it is ok to let them know in a nice way.  Then again if someone just spent a bunch of time to help you  show some appreciation.

Losing customers is unfortunately a part of business.  It is almost inevitable and sometimes preventable.  Bottom line is there is a nice way to leave, no sense in burning a bridge you may need to walk back over some day.

The real cost of a claim is

much more than the money you are given.

10:00 Thursday, August 22nd my car was hit.  I was deemed 100%, not at fault and only suffered a small cut and a few hours of soreness.  This is being written 23 days later and my car is still in the shop.

Yes, I have a rental and have had it available since the day of the accident.

Yes, I have no out of pocket expense for this accident since I am not at fault.

No, I am not terribly pleased with this whole claims process.

See I have consulted with a few hundred claims and know how to handle them but I missed the worst part when there are no physical injuries of course.  Cars can be fixed or replaced.  In most cases, people will heal.  But I did overlook the immeasurable and uncompensated annoying part that goes along with claims.

It sucks to not have your car.

Yes, that is a bit petty since I do have a nice enough car to drive around but it is not my car.  My driving habits have not changed, I have not changed my usage, I’ve just enjoyed it much less.  See there is something to be said for this situation.  See your home/rental/condo policy has loss of use coverage which basically provides living expenses if you are displaced from your home.  Now within that coverage, I am aware of claims adjusters having a little leeway when it comes to what they pay out.  This coverage pays for a hotel or even a place to rent but it also compensates for meals if you need to eat out and the cost exceeds what is normally spent.  I’ve personally had a claims adjuster work with me to pay for a hotel in a different city since we were to be out of the house anyhow.

What is the comparable thing for auto insurance?  I’m not looking for much, just a little something to acknowledge the inconvenience.  Maybe Geico sends me a $20 Starbucks card with a little note;

” We know this is annoying, hang in there your car will be ready soon…”  Of course, it would be funny if they wrote  “Sorry the dopey kid we insure chose to test his 0-60 time while coming out of a Dunkin Donuts.  Have a coffee on us”

Just a little something to be a bit more human.  After all, this is not a transaction, you actually have had an impact on my household.  Either way, I think I’ll start doing this for my friends.

Just some thoughts, do with them what you like.

62 years of loyalty and you get…

A rate $600 higher than the market will bear.  Such a shame.  I have been told that if an insurance company has a customer with no claims they become profitable within about three years.  Based on this it is safe to say a customer of 62 years has earned your company some money, yet you let them go.  Kind of like the goofy T.V. or movie scenario where the employee of 30 years gets a cheap watch and a certificate of appreciation.

In your own world be sure that loyalty goes both ways.  Loyalty is earned and should not be given.  If you vote with your dollars you will likely not have this happen to you.


Leave the pen and pencil set behind, you can buy plenty more with your savings.

Enterprise part 2


  1. Mistakes happen.  
  2. I make plenty of them.
  3. I really value time and may have an unfair advantage and/or extra motivation in this category

So I thought I was done when I wrote this letter to Enterprise yesterday.  Then minutes after writing it Enterprise called and said they should not have given me the car I had, could I please swap it out.  I replied to this message at about 10:00 a.m.  We agreed they had a comparable car **honestly the Ford Fusion may be fancier than the Chrysler 200 but it is not an upgrade** and we agreed that we can exchange cars at 1:00 at my home.  Simple enough, mistake happened, I said no problem I would be happy to help and went about my day.

Now it is 12:30 and I am home.  Car seats are removed and the original car is in my driveway ready for pickup.

Now it is 1:05 still no Enterprise.

Now it is 1:15 so I call.  After sitting on hold for several minutes I am assured he is 5 minutes away.

Now it is 1:35 I call back pretty annoyed since I will now be late for my 2:30 and was told there was an accident on an adjoining road and he was on his way.  **

Finally 1:55 and the driver arrives.  Here are some observations;

1. People are late all the time, it happens.  CALL  Most humans will  understand.  But call even when you think you may be late.  The only call I received was at 9:30 when I was asked for help.

2. OWN your mistakes.  Not once did I feel any genuine empathy for the time I allowed you to steal from me.  Remember I was helping you fix your mistake.

**3. About that “accident”  Most accidents that hold up traffic involve the police and sometimes fire trucks and ambulances.  My home is .2 miles from the main rd and .9 from the fire station.  I heard nothing BUT the driver had a full iced tea/coffee from Dunkin Donuts.  Could be coincidence but this is just north of my home and actually out of the  way if coming from your location.

4. About the driver, if you are employing anyone you have a responsibility to help them develop.  Why would  you send a college graduate out with jeans, a t-shirt and a baseball cap on.  Like it or not image is very important.  Then again you gave me another car that is overdue for an oil change.

Now what, right to Twitter and Facebook.  A very quick response via Facebook and I was told someone would call.  Earlier this afternoon they did.  I suppose 24 hours from an incident is not bad.  I think the only way this person could have cared any less is if he actually said I really don’t care I am just calling because I was told to…  When your managers have no ability to empathize it makes sense that their reports have none either.  He claimed to know nothing about what the actual problem was and I had to explain it.  During our chat he actually gave more praise to the manager who gave out a sold car, lied to me and made no effort to make things better than he did to apologizing and making me feel better.

No genuine thank  you, no random “gift” no direct compensation for my lost time/productivity, NOTHING.  Just another lost opportunity and another hour of my life gone.

Now I will spend the next two weeks or so in your rental.  It would be great if you could try as hard as your commercials say you do.  Aw well.