One of my favorite books and movies is The Milagro Beanfield War. It takes place in the ’70s in a small, poverty stricken, dirt street northern New Mexico village. It’s close to a third world village, and into this village, lands an Ivy League graduate student who probably hasn’t seen dirt, much less dirt streets. He had no idea he’d have to hitch a ride to the village or walk. Then when he arrived, he was surprised there were no hotels or apartments. When he finally finds the mayor walking across the only intersection in the village, he asks, “Didn’t anyone tell you I was coming, coming to teach your citizens this summer?” The mayor responds, “No, but it doesn’t matter anyway. Chances are, if we don’t already know it, we aren’t interested in learning it.”
I have been to so many agencies and met with so many producers who hold tightly to this exact same philosophy. Of course, especially because of CE, everyone must go through the motions of learning. Heaven forbid a producer would actually say out loud they are not interested in learning, but most are not interested in learning. We have an industry populated with people who earned C’s, maybe B’s, and quite a few D’s in school. (For readers who don’t know me, I don’t throw stones like that without proof. I’ve surveyed hundreds if not thousands of agency personnel, especially producers, with this question and not many A’s have appeared in their records.).
The key words in the mayor’s response above are “interested” and “it.” Are you truly interested, to the point of expending extra time and energy, to learn coverages well? Learning coverages is hard work and without interest, the energy won’t be supplied. Without interest, going through the motions of learning is for the most part useless, other than for the CE credits.
“It” is education in the mayor’s response. “It” is a pejorative term here. “It”, education, is not considered worth spelling out. Education just becomes “it.” How do you see education?
Wanting to Learn
I’ve been fortunate lately to work with many younger producers who actually want to learn coverages, to learn how to best protect their clients rather than just selling clients insurance policies they hope will provide the needed coverage. If a producer does not know coverages, then all that producer can do is hope coverage is adequate because they’re just guessing. However, because they are being thoroughly educated, the producers I have worked with know whether their clients have the right coverage.
One of the best outcomes of being well-educated is these producers sell more insurance. Even during this economic downturn, their sales are not decreasing. I hear from many agents and producers their sales are flat to negative. A correlation seems to exist between producers who are better educated in coverages and still interested in learning more, and those who are selling policies based on hope.
As E&O exposures are being given a thorough examination in this pandemic, it is funny that customers who truly have better coverages are less likely to sue for E&O. The biggest E&O exposures in my opinion are not BI-Pandemic related. Instead, the E&O exposures are for common coverages like workers’ compensation, D&O, EPLI, cyber, and inadequate liability limits. The very best E&O risk management tool ever invented is selling clients the coverage they need. The odds of incurring an E&O claim when a client does not have any uncovered claims are quite low. If the client has the right coverages, the odds of a claim are mighty small even if the agency has lousy procedures. Maybe save your eight-hour E&O CE class and instead just focus on learning to sell the correct coverages.
To sell the right coverages though, one must at least be interested in, and then committed to, learning coverages. Without knowing coverages, one cannot really sell the right coverages. Rocket science is not required to figure this out.
Some may be thinking that customers will not always buy the right coverages. Of course, they won’t. Your job is to sell them the right coverages. Your job is to convince them to purchase the right coverages. If you are not a good enough salesperson to sell them the right coverages or if they simply decide to self-insure and forego any risk transfer, have them sign off on their decision in writing. No one ever buys all the insurance they need but most producers do not even attempt to offer all the coverages clients need. The real-world solution is somewhere in the middle.
The best tool, proven over and over for at least the last 40 consecutive years, is a coverage checklist. Checklists are difficult to use, without question, for two main reasons. The first is that it takes time. 95% of the producers who protest to me against the use of checklists use this excuse.
However, I tested this complaint and discovered their reasoning, that customers won’t give them the time, is generally wrong. The real story is that producers are afraid to ask for the time and/or customers do not have enough faith in the producer for them to feel the time spent will lead to anything good. Either way, it is a producer problem, not a client problem.
The other reason checklists are difficult to use is because one must know coverages well in order to use a coverage checklist. We keep circling back to education. All roads lead back to education.
I created a unique insurance education program that is heavily focused on adult learning. It works. My clients are learning coverages deeper than ever, by far. They are enjoying their jobs more, and sales are increasing. Someone asked me yesterday, what is the number one obstacle to additional success? My response was that because of our unique training methods, we’re able to identify and track who is truly interested in learning and who is just hoping to go through the motions like they do in other insurance classes. The results of these surveys are that a high proportion of producers just want to get through without having to expend any more effort.
Are you interested in learning what you don’t know about insurance coverages? The rewards for those willing to work to learn what they don’t already know are significant. I continually find that these people find their work far more rewarding. They go home knowing their clients are better protected, that they are doing a better job. They worry less. This is especially true for account managers. Producers make larger and larger sales and are also building better relationships with their clients who then give them more time, not less time, because they have more respect for these producers.
The divide between agencies that are doing well and those that are struggling through this pandemic is stark. Those agencies with producers who are not really interested in learning what they don’t know remind me of dirt street poor villages from The Milagro Beanfield War. Those agencies with producers willing to work hard to learn what they do not know about coverages or even learn to know what they don’t know, seem to be having outsized success. This is the fork in the road. Which road will you choose?
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