Tag Archives: rates

10.28.18
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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?

 

10.23.18
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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.

10.17.18
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Time for an annual review

Cleaning out some drafts I apparently never published, the paragraphs below(italics) were from February 2015.  Updates and comments in regular type.

Reviewing your insurance could be the most critical piece of personal finance.  Until the process can be automated it is on you and me to do it.  In this case, since it is just my insurance it is all on me.  I first wrote about this over five years ago.  If you searched the word “review”‘ on this site you would get several different takes.  Mostly coming from a variety of things that happened.  Here is a fresher look since my policies just renewed.  Yes, it actually happened just shy of three weeks ago and yes the paperwork has been on my desk since late December.

Why?  Well, the first thing you and I do is look at rates.  The home rate was about even and the auto rate went down.  Immediately I lost all urgency.  I also know that between my wife and I there are a handful of tickets and accidents that, like it or not, are still currently relevant to the rate.  You have to look at your rates.  PERIOD.  No, this does not mean to only shop on price, it just means you have to look at your price.  This is normal human behavior. And, like it or not, you have been conditioned by the industry to this.  BUT,  behind the scenes underwriting is tougher now than at any point during my 15+ years doing this.  We have begun to advise not canceling a lot of new property policies until we know any unplanned inspections have been completed.  Oh, and remember,  auto and home insurance + the U.S. consumer = commodities colliding.

Moving along to some detail;

AUTO:

  • cover the basics; name, address, drivers, etc. So disappointing that so much of this can be automated and pre-filled yet common apps fill it in an insurance quoting sites do not. This is basic stuff and the compounding time is huge.
  • Check the discounts, everything there that you thought would be? Tricky, tricky thing.  Discounts are not what they once were.  You are being “rated” more ways than you or I can count. Remember, asking is often the surest way to getting but, sadly, even if you get it, you may be disappointed.
  • Has your use of the vehicle(s) changed?  Fewer miles typically means lower rates. Telematics will replace this….but not until companies understand how to apply telematics.  Either way, mileage questions border on irrelevant.
  • Remember, a multi-policy discount can be substantial.  likely need to move both plans if shopping.  This may be the biggest flaw in the entire price shopping landscape.  Not quite fraud but certainly some ethical implications.  Multi-policy discounts are potential ENORMOUS. Not disclosing this to a homeowner who is doing an auto quote is a mistake.

HOME;

  • An escrow account is wonderfully convenient and very dangerous to your wallet.  Leaving just about any piece of your financial world unchecked is a bad idea
  • The compound effect is real and can have a profound impact on home insurance.  Sure, your coverage went up by a small percent this year but when it is 3-5 years later those percentage increases are magnified.  Pro-tip, many homeowners get a discount for something called “inflation guard” or similar.  Essentially, if you let us increase your coverage automatically we’ll “thank you” with a discount.  This often goes unnoticed but is important.
  • Where is your company flexible?  Some are with other structures.  Some with personal property.  Most aren’t with the main dwelling coverage.  Untapped but large opportunity for improvement here.  Not a full-on customization of a policy but certainly room here.
  • Fact is you are getting all sorts of coverage that look good on paper but really do not do much.  it is what it is.  Often said to older customers when comparing policies “Remember, there was likely nothing wrong with your home insurance from 20 years ago.  All these extras look nice but aren’t much….”  Google the insurance silos and this is another example of them not talking.  Lemonade did some funny writing on this as well.  This piece of coverage is overdue for an (r)evolution.

 

Your own diligence is huge.  Always has been likely always will be

Finding clever tools to help evaluate the replacement cost of your dwelling and your personal property is huge. This is a whole other topic and is a mess right now.  Lots of room here as well.  Don’t believe me?  Go look in your area at the price to BUY a brand new home.  Then realize that every property insurance company has a different version/idea of what that will cost to rebuild.  Many, or most of, will be laughed at by the builder.

 

 

10.11.18
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Dynamic underwriting exists…and somehow it is bad for customers

I’ve had my own run of claims as well as some others going on lately.  Fortunately, an occurrence that could have been claimed, sort of,  and a basic “How to handle a claim post”

Both are still accurate and both are somewhere between far from the truth and not enough.  I’ve long thought insurance functions as much like a credit card or bank loan than what people expect from insurance.  But, maybe I’m also abusing or misusing the word dynamic a bit.

Is your insurance re-underwritten year to year?  Sort of but in my experience, not completely.  See it is quickly reviewed and assessed for negative things like claims.  Sure, you may not see a surcharge for that accident but look closer.  See, you have a tier assigned to you and if that changes you’ll also likely see your rate go up.  Hence, dynamic underwriting….but not really.

But I was married this year or completed college this year or bought a house this year.  Don’t those things help?  Sure, sort of.  But, not completely in the live environment.  See, adding a second car and a spouse will find you multi-car savings but doesn’t typically adjust for your spouse or partners credit score or college degree that you don’t have.

An agent needs to know this and also needs to know the how and when to adjust.  But, as with all things, there is a cost associated with this.  The company does not bear the burden of keeping a customer.  In fact, many of their actions make you wonder if they actually want to keep the customer.

So, is it dynamic underwriting or situational dynamic or something else?  So it is much more situational dynamic.  In other words, we’ll be dynamic when it is convenient for us.  Yup.  That is why when David asks about filing a claim I have to have a drawn-out explanation that ends with, I really have no idea if it is a good idea or not. You really just have some sort of “loan” that sometimes functions like insurance, other times functions as a credit card with 6 months interest-free and no payments that you better read the fine print on.

Until an insurance company wants customers from top to bottom in the organization, this is unlikely to change.

09.30.18
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Review and repeat, It’s a cycle disguised as a tag line

Today’s idea comes from a silly, boring post in 2011  Although it was a short, almost lay, post, the message is correct and overlooked.  I’m guilty as charged.

But how do you find ” an average savings of $432….”  when reviewing auto insurance.  Well, the game is more or less rigged.  Some of it can mimic “self-sabotage” but it is really corporate laziness/indifference?  Here are some facts/scenarios to consider;

  • Insurance rates change. Period.  Sometimes a company can do it once a year…if the regulators cooperate.  Certainly every 18 months.
  • “New Programs” remember this new program is for NEW customers…but don’t worry you are a Loyal customer….You’ll continue to have the one-sided loyalty illustrated by not having access to the new coverage and rates
  • YOU change, but your company is not obligated, sometimes not allowed, to use this in a positive way.  But don’t worry, they’ll use it in a negative way.
  • Oh, and that “accident forgiveness credit” you actually PAY FOR, ask about your rating tier.  That may not be covered by the credit you are wasting money on

So, if you are merely “shopping” for insurance because ” I feel like my rates are too high, blah, blah, blah”  consider;

  • Are you really saving that much money if you do not know what the BEST current rate is from your current company? Actually, no.
  • The best way to save money is actually NOT to shop.  Make it a planned review no LESS than every two years
  • You DO NOT want to save more than $200ish on your auto, home, umbrella package!!!  Why?  Because if you save more than this you likely missed a cycle.

Advertising that leads with price and phony savings is bad for humanity and to a lesser extent the entire insurance industry. But, the fault lies in companies who are not willing to review their books of business and strive to keep people who fit their current underwriting criteria.  BUT, if the current marketing criteria are too different year to year or every three years, a company will likely never be as profitable as it can be.

So maybe it is the companies who need to do the reviewing?

03.09.16
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The most powerful paragraph in insurance

AKA  My and the Insurance/Banking industry’s simultaneous biggest problem and opportunity

AKA What #insurtech should be trying to solve but outside of me and maybe some people I have not found yet, is not.

Really it is two paragraphs.  One that comes from a standard document that you’ll find in your policy forms. Yes, I know you likely do not read them.  Also, the version in your state may be different.  The other is a direct quote via an email.  I see or hear variations of the second one every week.  So here goes;

In connection with this insurance, we previously used a credit report or obtained or used a credit based insurance score based on information contained in that report.  We may obtain or use credit information again provided, however, that upon renewal such information may only be used to reduce premiums.  An insurance score uses information from your credit report to help predict how often you are likely to file claims and how expensive those claims will be.  Typical items from a credit report that could affect a score include, but are not limited to, the following; payment history, number of revolving accounts number of new accounts, the presence of collection accounts,bankruptcies, and foreclosures.  The information used ot develop the insurance sore comes from Transunion.  If you have any questions about the use of credit information in insurance underwriting, you can contact us at 1-800-***-**** or write us at p.o. box______________ or via fax at 877-***-****,  When you write us, please include your name and policy number.

Here are a series of questions I am pondering;

So when negotiating for this right, did companies really just build in a “backdoor” to cover them if it didn’t work?  Think about it; if this was so accurate why do they reserve the right to raise your rates after claims?
Is this really a “customer centric”approach?
Why don’t they actively use this awesome tool to retain you as a customer?
Depending on what blog or newsletters you read, depending on who you follow, depending on who you work with/for you’ll catch almost the  “excuse of the week” when it comes to fixing the personal insurance marketplace.  The saturation point of unexecuted thoughts and ideas has been reached a long time ago.  I prefer things much simpler; acquire customers, take care of them, keep them.  By keep them I mean BY ALMOST ANY MEANS NECESSARY.  I like to think I follow a good cross section of people/companies.  Yet they all see to alternate what the excuse is for not being able to help the customer.  So many are focused on new business and will spend whatever time and money necessary to get it but most overlook what they have already.  Silly and sad…..but creates an awesome opportunity.
2.  “Billy,
Why would the rate go up 50$ shouldn’t it decrease over time? No tickets, no accidents… Is there anyway to lower the rate? It just doesn’t sound kosher that the rate they want now would be more then the initial payment with XYZ, then the second payment decreased to around 680$ which I’m fine with… “
Quick Back story for you insurance people; came to me as uninsured, single, male.  I was thrilled with the rate he obtained. Then, for the next six months his rate went down, then after that period his rate went up.  In the meantime, as I do, I checked my markets to see if anything better was available.  His rate, although inexplicable raised, was still the best I could offer.  
 
His logic is completely sound.  This is, sadly, the once accepted but should no longer be acceptable, norm.  This method of doing business is exactly what is allowing newer companies to come in and try and “disrupt” and old system.  Crap like this is why your agent might be pounding you with a useless newsletter or article.  This kind of behavior is not considered acceptable in any of your other buying experiences, why do we as a society allow it to continue?  
 
The short answer is I don’t…but more often than not am outnumbered.  The odds are long, but the payoff is massive.  Based on my(my company’s) growth rate, people like the way I do business.  But currently we come up short with technology and people power and to not bore you with analogies, it’s just tough.
 
Take from this what you want.  I gain more answers and fine tune things almost daily.  Almost daily I am also inundated with silly reports and nonsense being pushed by marketers and companies onto my fellow agents.  Such is life…currently.  I/We keep moving forward.  Actually close to a pretty massive move/shift that will greatly accelerate things.
 

An aside that is sort of related; A long ways back it was a Monday afternoon and a coach was giving us JV’ers a pep talk.  During this we watched the other team line up and he pointed out a couple of very large people.  He was very quick to point out, if they are so big and bad why are they playing on JV?  Yup, simple, profound and very logical.

I think  of this after just about every article, white paper or study I read.  If the people writing or being quoted know so much about how insurance is bought and sold, maybe they should start their own insurance brokerage or go to work for a broker or company?  The reality is things might accelerate if they did.

ONE HUNDRED MILLION or more people will benefit from these changes, would you like to help me?

02.03.16
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When the system breaks

I lose some sleep and wake up thinking about yesterday’s “loss.”  Not really a loss more like a time where everything seems to match up but it just doesn’t.  Everything is there;

  • was referred by a trusted person(is there any better way)
  • has been with me a few years(yup, 98+% stay)
  • had actually met in person(shocking but happens)
  • helped with a non-insurance thing(helped get one a job)

So you go into the renewal time ready to follow the plan and this time it doesn’t work.  Factually the overall plan always works.  But, within that plan, sometimes the sub-plan doesn’t get the expected result.  Take the other set of circumstances;

  • two people in a relationship(fortunately insurance is ahead of the rest of the country)
  • above average credit(yup, like it or not insurance scores work)
  • home owner(they better rethink this one soon)
  • college degree(not as valuable as you think)

Feeling good at this point but then the bad side of the Insurance industry steps in.  One driver gets a ticket for using his cellphone.  No big deal right?  WRONG  Fortunately the current rate is still competitive in the market.

Quick aside; the sooner we stop punishing people for things that are more driven by profit the  better.  Some companies have wised up and in many cases look at DWI/DUI differently.  Cell phone use is in a similar category.  Good people make mistakes.  We have an imperfect “justice” system. Act accordingly.

 So you look at putting the home and auto with the same company, this has not been possible yet,  and you think;

Life might be slightly easier if you couldn’t give a multi-policy discount

But that is not the case so we trudge forward and the news gets worse.  You are in a pretty good spot but then you remember the small claim last year.  By small I mean a payout of $429.  And in steps the flawed, old, non customer-centric philosophy of throwing away every other rating variable because somebody used their insurance.  Flag on the play, I am calling a foul or honestly just saying BullS*&$ .   You wonder why so many new “tech” companies are coming into “your” space.  You wonder why you have to(really choose to) spend so much money on advertising to get new customers.

It is because you are not treating your current ones very good!!!!

Enough already.  I am moving forward, my model works and soon enough this model will solve this nonsense as well.  Honestly, waiting for Insurance companies to do it is a colossal waste of time.

Moving forward.

08.02.15
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Rethinking claims and the causes

***Working thought, from an idea via a longtime friend***

So the scenario is quite common, friend calls and says they want to have some tree work done on their property.  Pretty common.  You can also insert, new roof, new furnace, upgrade to electric panel, drainage dug, fire alarm installed, etc.  Think of it as any proactive, likely preventive measure that can reduce the likelihood and at worse the severity of a claim.

“Bill, is there an extra discount for cutting down the trees?  Will they(the insurance company) pay for it?  ”    No and No.

Why not?  Well, in theory, this is your responsibility.  Maintain your home.  Home insurance is not a maintenance policy.  Nor should it become one.  On the other hand, if we are engaged in this great mutual enterprise of protection, of a partnership with a set of people, why aren’t we working together.

What to we do first?  I think we come up with a pretty comprehensive list of items that can be done that can reduce or sometimes eliminate the likelihood of common claims;

  • Annual home inspection by a certified home inspector
  • Gutter maintenance
  • Improving or adding better drainage
  • Keeping trees/tree limbs off a certain perimeter of the home
  • Insect/animal inspections and preventive measures
  • Alarm systems; fire, smoke, co2, central alarms, mobile monitoring
  • Nest type thermostat with temperature sensors
  • Documented annual cleaning/inspection of wood stoves and fire places
  • etc.

Then set up a pretty basic incentive structure.  Say a $20 annual credit to be applied to your premium for completing 1-3 of these.  $30 for 4-6, etc.  Or maybe a deductible credit.  Right now it is popular to diminish/waive a deductible after a period of years.  This is nice but does it really make sense?  Is it something the customer can see/feel/touch/SHARE right now?  NO it is not.   Maybe doing something big like tree removal/pruning or a new furnace or a new roof gets you a $20 a year credit for say 5 years?  *Yes, some are already doing a roof discount**   Lets expand this.

Let’s get better relationships in place with say Angie’s List, Home Advisor or other similar site.  In theory, they are already filtering the good contractors from the bad, why replicate their effort?  No need.

If used properly this can be a massive retention tool as well as loss ratio reducer at the broker/agent level.   This will also help the carrier.  Not to mention, this is something actually worth talking about.  It is a positive incentive that can put more money back into the local economy while creating a marketing activity worth talking about.  Seriously, enough of this overplayed and diluted discount non-sense.

Thanks for considering.  Open to your thoughts.

05.21.15
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When your “competition” helps you

So I was playing around with on-line quoting and of course had to use Geico.  Recently, now about 3 months late I received a well done email.  Obviously now part of a drip campaign.  This is not remarkable but what was there certainly is.

Coverage Coach

FANTASTIC.  First of all it is a very cool tool.  Clean screens, easy to use, etc.  But why is this important?

BECAUSE THE COVERAGE THEY OFFER IS NOT AS GOOD AS WHAT YOU DO!

That’s right.  I went through it ten times with a variety of combinations and every time I came up with less coverage than what I would offer a similar person.  Baffled by this but not surprised.  I’ve been replacing Geico policies for years.  When not replacing them I am encouraging(sometimes begging) people to please take higher coverage.  Most of the time it works.  Let me speculate on why;

  • They think they are saving you money?  In theory they might be.  In reality, 9 out of 10 times they aren’t.  Really.  If you could save $50 a year or have $400,000 which would you choose?
  • “But you don’t need that much coverage…”  Prove it.  While you are at it go to the store and by me a lotto ticket.  Same scenario.  Also, if you have not noticed, companies partially base your rates on previous liability limits.  Lower limits typically leads to higher rates.  Your call.
  • $250 deductible?  $500 deductible?  No coverage on a $5000 vehicle?  Baffled.  When it comes to your comprehensive and collision coverage(also known as physical damage) consider a few things.

1. If your car is safe to drive and presentable would you get that small dent fixed?

2. Ask a body shop how much work $500 actually is?  Also ask about $1000.  Oh, by the way, the odds of your rate going up for a claim less than a $1000 are as good as over $1000.  Basically whatever you collect for the claim you’ll likely pay back over the next 3-5 years.

3. What your car is worth and what it is worth to you may be two different things?  Math doesn’t lie.

Just some quick thoughts.  Unfortunately the philosophy behind Gecio may be getting more of a life with some of the new “quoting” companies.

Just some thoughts.  Use if you want.

 

01.22.15
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Let’s go shopping

So it is time to take my own advice again.  With renewals for auto and home insurance pending I decided to do some shopping.  I’ve definitely written about what to do when your rate goes up but this time I did things  a little different.

START; Unfortunately my home is basically unmovable, two claims in less than five years.  So I look at what the rate will be without a multi-policy discount.  But wait, it gets a little worse.  I had a stretch in 2012 and early 2013 with three tickets.  Not good.  But, on a plus side, my wife’s two claims are now over five years old so they fall off.

  • no your record.  no that all claims/tickets are not being treated equally
  • time on a record will vary as well
  • make sure you are not being charged inadvertently.

Now that I know my record and know my real home rate lets go shopping.  So I am trying to avoid the “lead” companies so chose; State Farm, Liberty Mutual, Nationwide, Comparenow, The Zebra, Coverhound, Geico and Esurance.  Remember; there is always a better rate available but your time is likely worth more than what savings you’ll find.  Best to limit your search. So I learned a whole lot.

  1. The future is on-line, yes you already know that, but in insurance we are still in the early phases.  Lots of room for improvement.
  2. Expect to give some basic personal data.  Your date of birth and address as well as those from other drivers
  3. Don’t be uncomfortable; if your vehicle information, prior insurance information and driving history comes back automatically it is ok.  Saves you time.
  4. Might as well disclose your tickets and accidents.  Saves you time
  5. PLEASE PLEASE PLEASE read the fine print.  There was lots of it.
  6. READ CLOSELY, there were lots of not so good things with the coverage sections.  I find many to be unethical and quite shameful but then again I’m human
  7. Some of these sites really need to work on their writing.  Lots of inaccuracies and false statements.
  8. Pay attention to ESTIMATES everyone had a disclosure about when a rate was accurate.  Some only provide estimates then sell your data to the companies
  9. You would not want your family to be hit by a car with what most of these options consider great coverage
  10. Computers are not human and this exercise further confirmed that the programmers behind the sites could use some education

My observations are a bit different than most since I am in this business.  I also have a lot more observations about how inefficient these sites actually are.  But where would I start?  Anything(just about) that saves me time is a good thing.  Copywriting/Content writers whatever they are called are pretty important, they should really sit down with the attorneys and think things through.  Could easily list 3-5 errors on each site.

Final thought; Geico and Esurance provided a pretty impressive “experience” despite their awful recommendations.  Like the rest of your life, it is buyer beware.  Computers can replace humans for many basic transactions but I have yet to find a site close to me or many of my counterparts.