Posted On: February 2, 2005, 12:16 pm CST

Posted By: Larry

The question of company incentives and company pressures for agents (or brokers, I guess) to place business with them, regardless of the implications to insureds is a thorny one. I chaired a panel discussion on ethics once that addressed some of these questions. A panel of three agents and three company branch managers was asked this question:

Suppose you represent company A and have not given them much business lately for any of a number of reasons (price, servce, whatever). They then come to you and say that if you don't give them $xx,xxx of new business in the next 12 months, they will terminate your agency.

You know that you already have some insureds in this company that you will not be able to replace (due to age, experience, etc.) so if you lose company A, many insureds will get a raw deal.

A prospect comes to you and asks you to save him money on his insurance. You can save him money by placing him in company A, but you could save him even more if you place him in either of 2 of your other companies, B or C.

Are you serving his best interests by not telling him about B or C? Are you servig your other insureds by placing him in B or C?

The same thing goes for placing a sizable account with a company in order to qualify for profit sharing , or MORE profit sharing. The insured doesn't always get the best deal, but all the insurance company cares about is thier own bottom line.

In fact, in my 30 years in this business, it now seems, more than ever, that all insurance companies care about is the top executives, and the company's sort-term bottom line.