Tag Archives: lazy

12.28.15
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Maybe the insurance industry is just a reflection of society

Reality is this; insurance companies are run by other members of our human species.  They are also influenced by their surroundings both human and inanimate.  They are influenced by many of the same ideals, both positive and negative as the rest of us.  There is a lot of talk about “disruption,” #insurtech, #fintech, and #bigdata.  The industry is “ripe” for change, blah, blah, blah.

Yes I have many of my own thoughts, heck it’s my blog so of course they are my thoughts.  This dawned on me the other day;

Maybe the insurance industry is just a reflection of society.  But how?  In what way(s)?

So it came to me right in the midst of the holiday season.  Many of us buy new gifts for loved ones.  Many households, especially those of us with children, are likely experiencing an overload of toys.  Some of us now have items we don’t need, didn’t ask for and likely don’t want. BUT, I am hopeful we appreciate the effort.

I’m hopeful that many of us still appreciate what we have and don’t simply throw away what we have to replace it with the new and shiny.  

Than again, we will still have building after building of storage units for all the “stuff” we cannot bring ourselves to throw away or sell.  *Not sure where this fits in, are we all, on some level ,hoarders?  Are we so appreciative of “things” that we cannot throw them away?

But how does this fit the industry?

The average retention rate of a company and even brokerages/agencies is not talked about often enough.  When it is talked about, it seems like a “white flag” has already been waived and that they simply accept the fact that they will let customers go

**This is important, whether you are a company, agent or broker you let people leave more than they actually leave you****

WHY?

No idea really, the math and every basic human as well as business idea/philosophy tends to go against this.  But this is where I am beginning to think that the cause is much deeper than business and math.  Maybe it is deeply rooted in the subconscious.  Maybe it is tied deeply with your personal characteristics and how you are influenced by society.

Let’s face it, most of us ignore the ideas of repurpose, recycling, repairing etc.  Many of these people also simply buy new since it is convenient.  Maybe it is a lack of appreciation for what they have already(think profitable, blindly loyal customers).  But when it comes to insurance this attitude is very, very expensive.  Think SIX BILLION + in advertising expenses instead of less than a billion(my guesstimate) in retention expenses.

How do you/we break the cycle?  At what point will a company “stop the madness” so to speak and start appreciating what they have?  The practical examples are readily available; the older couch goes from the main living room to the play room.  The used car goes from you to the teenager.  We re-use some paint from one room in another.  Leftovers should still taste good the next day or beyond.

Back to the customer; you are hired this year and if you are lean enough you turn a profit this year.  If it takes longer than that, all the more incentive to keep them longer.  But how do we keep them?  If you have a system that automates most task, this could be fairly easy but;

It starts with your underlying principals and philosophy

If you appreciate what you have and show it appreciation it will appreciate you back(stay longer!)

If you own a car and want it to last you’ll change the oil.  It doesn’t mean the car has any less value.  If anything, changing the oil(investing a little into an asset) makes the asset worth more since you can keep it longer and hopefully avoid costly repairs.  Pardon comparing a human to a car but the analogy fits.  Keeping a customer longer does not ensure that they’ll be profitable but you’ll have no chance at profitability if you let them leave.

The big wave is already happening in insurance.  But maybe, actually definitely, those that can profit most from it will likely need to be accepting of a bit of an attitude adjustment.  I’ve written on it before, let’s look at companies like Terracycle.  Let’s look at Zappos.  Heck look at any of your local businesses who you are loyal to.  Now look at your insurance company/broker.  Same feelings?

As much as new technology is needed, technology will not solve the underlying societal problems that have infiltrated insurance thinking.

05.25.11
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What professionals do you see each year?

So the obvious one for most people is the doctor, most insurance companies pay for an annual physical so hopefully you use it.  How about the accountant who does your taxes?  If you use a financial planner I hope you are checking in at least once if not twice or even four times a year.  You probably even see the dentist once a year as well.

Why not your insurance consultant?

Insurance is the foundation for any financial plan.  That’s right any financial plan that is expected to work has insurance as some piece of it, more than likely it is the foundation.  So yes, your insurance consultant should be on your list of annual appointments.  It may actually be shorter than any of the others, possibly less intrusive and should cost you nothing.  You might even be paid to make the appointment if you are able to find some savings opportunities that weren’t available the year before.

So, as you plan out your year, about 30 days before your renewal get in the calendar for your insurance review.

UPDATE 6/8/2015

This is as true as it has ever been.  Reality is you can think of the personal and commercial insurance markets along similar lines as the stock market or other financial markets.  Almost constant flux which seems to be dictated behind closed doors by people who have not adapted to the consumer buying patterns of 2015.  The fact is this; if you go any more than a year you are at risk of overpaying for your basic insurance needs.

Why would you want to or worse why would you willingly overpay for anything?

Well the fact is the convenience of many things as well as the laziness inherit with others certainly contributes.  But, if done correctly, your time contribution each year should be less than sixty minutes.  In all likelihood less than thirty minutes.  Consider that you should find a $200+ savings and I would say it is likely worth your time.

Just some thoughts.  Check ups are good even if they may seem like a nuisance.

03.26.11
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Do YOU trust your agent?

Do you trust your agent enough to get a second opinion?

How about asking your agent what coverage they have and taking a look at their declarations pages?

Sounds like fun to me, let’s see if your agent has full no-fault coverage.  Let’s see if they have matching liability and supplemental coverage.  Let me know how it turns out.

UPDATE 5/14/2015

It has been over four years since this first post.  Sadly, the majority of times I review a policy I end up saying;

I’m not saying it’s bad. I’m just saying I wouldn’t sign my name to it.”

The selfish truth is, on the surface at least, this is good for business.  Makes the sales part of my day much easier;

Yes, I would like to give you more coverage and charge you less.  Is this ok with you? “

If you happen to be an agent, think of it this way, if the car you are about to insure where to hit your car with your family in it, would they have enough cocerage?  Since you’ll never actually know, isn’t it a good idea to not simply defer to what the previosu agent did?

If instead you are a consumer, I do not expect you to know the “ins and outs” of an insurance plan.  It is really like any other purchase, if it doesn’t feel right it probably isn’t.

 

01.04.11
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New Year New Insurance?

Why not?  When was the last time you changed companies?  When was the last time you actually made your agent or broker actually earn their commission.  Make them actually shop around, we are in a competitive market here in New York why not take advantage of it.

How do you start? 

Pretty simple, two steps;

  1. Start with a “baseline” of coverage that you are comfortable with having in place.
  2. Talk to 3-5 companies to see where your rate compares.

That’s it.  Worst case scenario you feel really good about your rate.  Best case you save some money and maybe find a better agent.

UPDATE May 26 2015

Not much has changed.  Still that simple.  There are some okay new tools available now that weren’t around when I wrote this.  You could try

Reality is, if you have not shopped in the last four years two things have likely happened

  1. Your coverage has fell out of alignment with what you need to have or should have
  2. You are likely overpaying

Either way, it is your money.  Spend it how you would like.