Having a bunch of letters after your name doesn’t mean squat. I can not count the number of weasels I’ve come across in this business, both on the broker/agency side and the company side who have to have CPCU, CIC, etc. after their names. Here are some ugly truths, some of which have already been mentioned:
– We’re selling a commodity.
– Price is all that matters.
– The insurance industry’s hard and soft market cycle meets the definition of insanity: doing the same thing over and over again, and expecting a different result.
– “Insurance Professional” is a contradiction in terms. Doctors are professionals. We’re professionals like used car salesmen are professionals.
AIG, like many other public companies, addopted the “Gordon Gekko” philosophy – “Greed is good”.
Be it from making a quick buck, or from the view that the only thing that is important is to make Wall Street happy, this fits into the “greed is good” philosophy.
AIG, and even many of the multi-national brokers (Aon, Marsh, Willis) have all lost sight of what their purpose is – to provide the finacial protection in case of a catastrophic loss.
Rather than putting the client first, they put greed, and making Wall Street happy first.
Important safety tip – it doesn’t work in the long run.
Dude – you must be drinking by now. But you are hilarious and have spoken more truth about this “industry” in those few lines than I have heard since 2003. Money – it’s the name of the game. However one chooses to go about getting it – is their own deal. Anyone who says it’s about anything else is lying.
The big problem is not the AIG insurance products, but the AIG FINANCIAL group. AIG Commercial Insurance is and has always been the foundation of AIG and is full of people that are first and foremost risk professionals. I can’t account for the Financial group!
I completely agree with your comments Big Dog. These companies and brokers make us all look bad. Insurance is already seen to most as a necessary evil, now it’s just plan evil.
It is the passionate insurance professional that is decidated to doing things right. An individual that is that is firm in ethical convictions. It is no longer thinking about what is right for you. It is at the end of the day what is right for the client and the company. We have been flocked with folks focusing on whats in it for me. That is why continued professional development that not only improves ones knowledge but also focuses on eithical principals is crtical to the success and future of this indusry.
I’m glad to see some real professionals posting comments that are relavent to this business.
I know some people at AIG in the commercial division. They are good hard working professionals. It is the financial division that brought the whole company down.
But as stated on this site it is just greed and loss of othe true reason people need insurance. They need to get back to basics
Thank you very much for saying what I have been observing for some time now. I have 30 years of insurance claims experience and am disappointed with the younger adjusters coming up behind me. Professionalism is a must in this business, unfortunately, carriers have bought into the idea that the application of technology is more important that a well rounded, educated adjuster.
When I began my adjusting career, I spent 7 months in training which included time in each department, i.e. underwriting, loss control, audit, etc. I accompanied experienced adjusters to observe how they investigated a claim whether it was a workers compensation, property or casualty claim. Once I completed my training, I spent the next 6 years as a multiline field adjuster.
Today’s adjuster trainee sits in a classroom and then moves to a cubicle with a computer.
For me, insurance has been a good career one that once upon a time, I would recommend to others. Unfortunately, adjusting has evolved into data entry, checking boxes on a form and complying with your employers audit requirements rather than meeting your insured and claimants face-to-face, conducting scene investigations, etc.
I truly fear our insured’s when my generation of adjusters retire.
Mr. Boggs is right, of course. During the course of my career I have headed two life industry professional designation programs, CLU and FLMI. Over the years, starting in the early nineties, I have watched many companies reduce their emphasis on education and ethics–the two cornerstones of professionalism. Support for education and life industry professional organizations has shrunk enormously. I understand that the same is true in the property/casualty business. Boggs used the term “calling,” which at one time was in common use among life insurance agents (i.e.,financial planners) and other insurance people. To the best of my knowledge this term was first applied to insurance by Dr. Solomon S. Huebner, the legendary Wharton professor who was the inspiration for both The American College and The American Institute of CPCU. Over they years it has been sadly neglected. While true professionals can still be found in both home office and field, in far too many companies they get little support from management and in some they are actively discouraged from promoting professionalism. The only way to make insurance a true “calling” is for the leadership of the industry to make professionalism a major corporate goal. It is not likely that a new leaf will be turned over any time soon, however. The good guys who might potentially lead this campaign are trying to save their companies, which have been hammered along with the rest of the industry; the others have no clue as to what Boggs is talking about.
This is so true. 25 plus years ago I entered this field because I couldn’t stand not understanding what I was doing every day. Filing, typing policies, etc. The desire for information and knowledge of insurance pushed me to be a ‘professional’ and with that, a paycheck followed, not the other way around. Someone once told me that ‘knowledge is power’ and the more we can learn about how to become a trusted advisor to our clients the better we all become. Sitting in a classroom falling asleep, answering emails, reading the newspaper, etc. for me is a complete waste of time. I always try to get something out of the class and using it in a practical sense with my clients. All the information learned can lead to building a professional relationship and building revenue.
It really doesn’t matter what sector of AIG is the reason for them failing, whether it is the P/C piece or the financial piece. The public who pays attention to the daily media knows very well that is was primarily because the financial sector, just as they will forever associate the name AIG with greed, hidden agendas, and no foresight whatsoever to look out for their shareholders and employees.
I’ve felt the professional downtrend for some time but it’s not too late. Those of us who have stayed in the profession for 20+ years should revert back to our ethics. I love this industry and have been proud to be in it because of those special professionals who I’ve learned so much from. Now it’s up to us. If we bring back the professional ethics then pass along to those coming into the industry, we not only rebuild the image of our industry, we help ourselves by helping our clients. We should not sit calmly by and let the foul AIG stigma degrade us all.
We have always received fair and ethical treatment from our AIG underwriters and virtually ALL of our underwriters from competing carriers. But ethics is entirely about up-front expectations. Our underwriters know that we are very exacting in our standards and that we are holding ourselves out to our clients and target markets as industry experts. We simply will not accept some of the practices that “Big Dog” mentioned had become so prevalent among the big 3 brokerages he mentioned. Unfortunately, shareholder greed pushes the same motivations and standards to other large, publicly traded agencies, including bank-owned agencies across the country (how impressed are you with the profit-driven decisions made by banks lately?) It really calls into question whether the traditional definition of an “independent agent” actually applies to agencies of this structure. Too many agencies have forgotten that they are not supposed to be beholden to shareholders…AT ALL. Their moral and fiduciary obligations are to the insured. Note that I did NOT say, “to the insurer.” If we do not TRULY represent the client’s interests through the complex process of risk management and coverage placement, not to mention claims advocacy – who will?
why else would they forsake education and the concept of need? First and foremost for many is ‘who is the cheapest?’. How
else do you explain the growth of Geico?
Their motto is ‘give us 15 minutes and we’ll save you 15%’. Obviously, with the growth Geico has experienced it certainly strikes home with many. Do you think the public would respond similarly to an ad that proclaimed ‘buy insurance from us, we have completed 15% more continuing education?’. How about this slogan ‘we are 15% more ethical than our competition?’ No, that won’t bring them over either.
For myself, I don’t need more continuing education to sell auto, home, life and health. I know my states contracts better than most agents. I just need to keep trying to insulate my book and continue to grow by administering myself and my staff to always try to do the right thing by clients. If we err, at least with that approach we don’t have to question our starting point.
When I started in this business, a longtime agent told me that our work requires us to have a service persons heart. I have never heard a better job description, at least for the way I will always try to do it.
I’ve said it before and I’ll say it again. The insurance business is crooked. It wasn’t bad 40 years ago when I started, or even 10 years ago, but for the last 5 years the bean counters, attorneys, and computer mavens have carved up the insurance business to suit their own greed. The true professionals are largely gone. If anyone asks what I do, I tell them that I play a piano in a whorehouse.
Mr. Boggs, you are so very correct on all topics broached. THANK YOU for writing the truth and putting it out there. As someone else stated……… It is UP TO US! We MUST turn this negativity around. Learn a Lesson from this mess, Move Forward and make the future better, “For the SAKE of our clients.” THANK YOU FOR YOUR HONESTY – IT’S REFRESHING!
I believe your disappointment should not be in the younger adjustors that will follow your footsteps, but, perhaps in your own generation for your failure to properly mentor the future generation. As a “newbie” in insurance myself – I am reminded on a daily basis of the lack of knowledge of the insurance youth, but am surrounded by veteran insurance “professionals” with an absolute refusal to mentor the younger generation.
Insurance youth, I believe you misinterpreted my remarks, I am not blaming the younger adjusters for their lack of training and experience. I am placing the blame on the companies for failing to properly train and relying on technology and process rather than training and experience.
I am sorry you are unable to find an older adjuster in your company to mentor you, I would be thrilled to mentor a younger adjuster!
Attention insurance youth – don’t give up hope. Do find a company with a culture more compatible with your attitudes.
I believe the current economic cleansing will affect other insurers who have conducted business with the wrong attitude. That is – profit at all costs.
Quality? What is that? If the longtime adjusters aren’t helping you develop the attitude and skill to help THIER CLIENTS, RIGHT? Those clients you are helping are clients of everyone in your company who draws a paycheck. Ergo, everyone in your company has a stake in the way YOU SETTLE THE CLAIM!! If those schmokels don’t see the big picture there is a reason. Maybe your management does not recognize the importance of passing down the wisdom, and manages such.
well, someone at least is looking in the right direction. funny how we look at things and the association. for example, we looked and heard that AIG had financial troubles. when in reality it was AIGFP. because of the association of AIG, most folks are moving their products elsewhere. granted the AIG (insurance sector) is not in a bind, but the association is killing their business. if you noticed that parent companies, normally let the unit keep their name. they don’t slap another name with it. this is probably the worst problem that AIG did.
i believe in the way that Warren Buffett has it established. look afterall, the many companies he owns: DQ, GEICO, and many others.
I don’t believe commercial lines is or will be profitable. I admit, I haven’t looked at AIG’s financials. I’m generalizing because of what I know about commercial lines from experience. If an underwriter prices an account correctly, he will loose the account because of other incompetent carriers underpricing it. What good is booking a $100,000 premium which will with high probability produce losses that exceede the premium? The reason is that incompetent u/w managers push to get premium on the books even if the accounts are money losers! Then they tell premium audit to not only be an auditor but to also re-underwrite the risk. If the auditor who is always told to produce, produce, produce does his job, then the correct premium and codes will be used. But why should an auditor spend the time to do this when he will be chastized for not doing enough audits????????? Bottom line, the professionalism is gone in the industry. The emphasis has been on the streamlining of processes with no human intervention. Thus, agents and insureds try to circumvent the system to achieve premiums that are less than other carriers while the carriers suffer the losses due to incompetent managers. WHO IS BOOKING BUSINESS WITH AIG NOW? What happens to your E & O exposure if they go under leaving an insured without the protection they thought they were getting? If your not booking with AIG, then what exactly is going to happen to AIG’s future revenue stream? What exactly is the U.S. treasury buying, a defunct company with an impaired future revenue stream?
Wow “Dude”, I sure do feel bad for your clients. If you really think that we are as professional as used car salesmen and price is the only thing that matters, maybe you should be in a different profession.
I thought this was a great article. It could have connected the dots even further by suggesting that Credit Default Swaps, what got AIG into trouble in the first place, legally be considered “insurance” thus subject to the regulation and professionalism mentioned in the article.
The problem is the Community Reinvestment Act, not insurance professionalism. AIG was insuring subprime mortgage securities mandadted by the CRA. The mortgages were agitated for by ACORN and Barack Hussein Obama, their attorney. Fannie and Freddy’s CEO’s became Hussein’s advisors after making their millions, and gave Hussein more Fannie and Freddie largess than any politician but Chris Dodd (D), Senate Banking Committee chairman.
So, in a nutshell, Hussein and his thieving friends caused AIG’s problem: defaulting on credit default swaps. This of course started the panic, because everyone’s bad paper was insured by CDS’s.
But worry not: Hussein and the Dems are gonna fix it all up!
Someone told me that the culture of those running the CDS business was a lot like a boiler room; I wonder what their degrees or designations were? I am glad that someone keeps bringing up that this was not the insurance business which causedn this mess; insurance is the profession I aspire to, for which I work and hold several designations, in addition to my bachelor’s degree and for which i am quite proud and worked hard to attain…There was a lot missing in the FINANCIAL group and you’ll see the emails and other proof that those in the lead at AIG were not keeping their eye on the insurance side but rather the money-making machine that pumped unsercured/unreserved credit default swaps; had these people engaged in any business education, I would have expected someone to mention that this house of cards could fall any time. I know the smoking gun will be found and it won’t be from the insurance sector; someone said it was the board, and I for one believe that.
Dude, You can have your opinion and we can have ours. There are pockets of unethical people in ALL professions, to the tune of about 20%! But your jaundiced attitude is probably noticed by your clients/customers and my attitude has always brought me praise because I really do care about the client. I worked in another industry and only took this job to fill in while I went back to school; but I found I thrived doing the right thing, even around those who try to commoditzed insurance and who only keep thier eye on the bottom line, while our noses should be to the grindstone. I can only hope that others with your attitude will eventually get out of the industry; we have two problems, those who work for the bottom line and those who don’t care to make a difference. If you don’t contribute to the problem, you are still guilty for going along. It is a very hard uphill battle but I go at it every day. Doing the right thing is not hard to remember, it’s just too hard for some to keep at.
Its about time someone addresses the issues I have been in the industry for 40+ yrs. and the quality of individuals that have come into the industry in the past 10 yrs is a joke all they care about is the money and when I got my brokers license. It was not taking courses for 52 hrs and passing a test you had to have the exp (years + a recommendation in writing from a employer stating that you were qualified to be a broker) the industry has gotten out of hand everyone got licensed and everyone became a broker- no distinguish between a solicitor and a broker- we have individuals in the industry that have no idea what to do or how to get the job done. You might say they can not work out of the box. I feel now the industry will see what happens when you have high paid individuals with designations-without the experience-knowledge. Maybe there will be some consideration to the people that are close to retirement that they are not too old to work in the industry and not be discriminated against as has been the case for the past 10 + years.
AIG- should not have been bailed out by the government. They should have been forced to take Buffet or Gates, or any of the other billionaires offers to infuse capitol into the company. This is a private industry that the government should not be able to over see. It’s bad enough with the State Comp Fund, do we want the government ruling our industry? Think about what would happen if they we’re to rule all insurance carriers?
What does AIG’s behavior have to do with my and my colleagues’ education and competence?
I agree that educational requirements are vital to our industry remaining competent and responsible and there is plenty of room for improvement in how we educate our new and existing agents, but what does that have to do with AIG’s behavior?
I don’t think we are bailing out AIG because they didn’t have a proper insurance education.
I am so tired of the industry GIANTS abusing their power and influence and instead of people holding THEM accountable for their actions they turn their sites on the industry professionals who are following the rules.
First MARSH and the contingency/profit sharing issues drizzled down to the little guy affecting our bottom line and now AIG’s behavior suddenly means that WE are uneducated and reckless? Seriously?
Clearly the giants are tougher to manage than the little guy but hold yourself accountable to either face the issue head on or stay quiet.
If you want to speak about accountability keep your eye on the ball or stop talking!
Having a bunch of letters after your name doesn’t mean squat. I can not count the number of weasels I’ve come across in this business, both on the broker/agency side and the company side who have to have CPCU, CIC, etc. after their names. Here are some ugly truths, some of which have already been mentioned:
– We’re selling a commodity.
– Price is all that matters.
– The insurance industry’s hard and soft market cycle meets the definition of insanity: doing the same thing over and over again, and expecting a different result.
– “Insurance Professional” is a contradiction in terms. Doctors are professionals. We’re professionals like used car salesmen are professionals.
Reverend, play another song…
AIG, like many other public companies, addopted the “Gordon Gekko” philosophy – “Greed is good”.
Be it from making a quick buck, or from the view that the only thing that is important is to make Wall Street happy, this fits into the “greed is good” philosophy.
AIG, and even many of the multi-national brokers (Aon, Marsh, Willis) have all lost sight of what their purpose is – to provide the finacial protection in case of a catastrophic loss.
Rather than putting the client first, they put greed, and making Wall Street happy first.
Important safety tip – it doesn’t work in the long run.
Dude – you must be drinking by now. But you are hilarious and have spoken more truth about this “industry” in those few lines than I have heard since 2003. Money – it’s the name of the game. However one chooses to go about getting it – is their own deal. Anyone who says it’s about anything else is lying.
Just a bit pompous and snooty aren’t we? Quite a high opinion of yourself. Congrats on all the designations. I’m proud of you.
The big problem is not the AIG insurance products, but the AIG FINANCIAL group. AIG Commercial Insurance is and has always been the foundation of AIG and is full of people that are first and foremost risk professionals. I can’t account for the Financial group!
I completely agree with your comments Big Dog. These companies and brokers make us all look bad. Insurance is already seen to most as a necessary evil, now it’s just plan evil.
That was mature Insurance Professional…
With all due respects to pigs and troughs, let’s just call it the way it is.
It is the passionate insurance professional that is decidated to doing things right. An individual that is that is firm in ethical convictions. It is no longer thinking about what is right for you. It is at the end of the day what is right for the client and the company. We have been flocked with folks focusing on whats in it for me. That is why continued professional development that not only improves ones knowledge but also focuses on eithical principals is crtical to the success and future of this indusry.
I’m glad to see some real professionals posting comments that are relavent to this business.
I know some people at AIG in the commercial division. They are good hard working professionals. It is the financial division that brought the whole company down.
But as stated on this site it is just greed and loss of othe true reason people need insurance. They need to get back to basics
Enjoy the week-end all. I enjoyed your comments.
Thank you very much for saying what I have been observing for some time now. I have 30 years of insurance claims experience and am disappointed with the younger adjusters coming up behind me. Professionalism is a must in this business, unfortunately, carriers have bought into the idea that the application of technology is more important that a well rounded, educated adjuster.
When I began my adjusting career, I spent 7 months in training which included time in each department, i.e. underwriting, loss control, audit, etc. I accompanied experienced adjusters to observe how they investigated a claim whether it was a workers compensation, property or casualty claim. Once I completed my training, I spent the next 6 years as a multiline field adjuster.
Today’s adjuster trainee sits in a classroom and then moves to a cubicle with a computer.
For me, insurance has been a good career one that once upon a time, I would recommend to others. Unfortunately, adjusting has evolved into data entry, checking boxes on a form and complying with your employers audit requirements rather than meeting your insured and claimants face-to-face, conducting scene investigations, etc.
I truly fear our insured’s when my generation of adjusters retire.
Mr. Boggs is right, of course. During the course of my career I have headed two life industry professional designation programs, CLU and FLMI. Over the years, starting in the early nineties, I have watched many companies reduce their emphasis on education and ethics–the two cornerstones of professionalism. Support for education and life industry professional organizations has shrunk enormously. I understand that the same is true in the property/casualty business. Boggs used the term “calling,” which at one time was in common use among life insurance agents (i.e.,financial planners) and other insurance people. To the best of my knowledge this term was first applied to insurance by Dr. Solomon S. Huebner, the legendary Wharton professor who was the inspiration for both The American College and The American Institute of CPCU. Over they years it has been sadly neglected. While true professionals can still be found in both home office and field, in far too many companies they get little support from management and in some they are actively discouraged from promoting professionalism. The only way to make insurance a true “calling” is for the leadership of the industry to make professionalism a major corporate goal. It is not likely that a new leaf will be turned over any time soon, however. The good guys who might potentially lead this campaign are trying to save their companies, which have been hammered along with the rest of the industry; the others have no clue as to what Boggs is talking about.
This is so true. 25 plus years ago I entered this field because I couldn’t stand not understanding what I was doing every day. Filing, typing policies, etc. The desire for information and knowledge of insurance pushed me to be a ‘professional’ and with that, a paycheck followed, not the other way around. Someone once told me that ‘knowledge is power’ and the more we can learn about how to become a trusted advisor to our clients the better we all become. Sitting in a classroom falling asleep, answering emails, reading the newspaper, etc. for me is a complete waste of time. I always try to get something out of the class and using it in a practical sense with my clients. All the information learned can lead to building a professional relationship and building revenue.
It really doesn’t matter what sector of AIG is the reason for them failing, whether it is the P/C piece or the financial piece. The public who pays attention to the daily media knows very well that is was primarily because the financial sector, just as they will forever associate the name AIG with greed, hidden agendas, and no foresight whatsoever to look out for their shareholders and employees.
I’ve felt the professional downtrend for some time but it’s not too late. Those of us who have stayed in the profession for 20+ years should revert back to our ethics. I love this industry and have been proud to be in it because of those special professionals who I’ve learned so much from. Now it’s up to us. If we bring back the professional ethics then pass along to those coming into the industry, we not only rebuild the image of our industry, we help ourselves by helping our clients. We should not sit calmly by and let the foul AIG stigma degrade us all.
We have always received fair and ethical treatment from our AIG underwriters and virtually ALL of our underwriters from competing carriers. But ethics is entirely about up-front expectations. Our underwriters know that we are very exacting in our standards and that we are holding ourselves out to our clients and target markets as industry experts. We simply will not accept some of the practices that “Big Dog” mentioned had become so prevalent among the big 3 brokerages he mentioned. Unfortunately, shareholder greed pushes the same motivations and standards to other large, publicly traded agencies, including bank-owned agencies across the country (how impressed are you with the profit-driven decisions made by banks lately?) It really calls into question whether the traditional definition of an “independent agent” actually applies to agencies of this structure. Too many agencies have forgotten that they are not supposed to be beholden to shareholders…AT ALL. Their moral and fiduciary obligations are to the insured. Note that I did NOT say, “to the insurer.” If we do not TRULY represent the client’s interests through the complex process of risk management and coverage placement, not to mention claims advocacy – who will?
why else would they forsake education and the concept of need? First and foremost for many is ‘who is the cheapest?’. How
else do you explain the growth of Geico?
Their motto is ‘give us 15 minutes and we’ll save you 15%’. Obviously, with the growth Geico has experienced it certainly strikes home with many. Do you think the public would respond similarly to an ad that proclaimed ‘buy insurance from us, we have completed 15% more continuing education?’. How about this slogan ‘we are 15% more ethical than our competition?’ No, that won’t bring them over either.
For myself, I don’t need more continuing education to sell auto, home, life and health. I know my states contracts better than most agents. I just need to keep trying to insulate my book and continue to grow by administering myself and my staff to always try to do the right thing by clients. If we err, at least with that approach we don’t have to question our starting point.
When I started in this business, a longtime agent told me that our work requires us to have a service persons heart. I have never heard a better job description, at least for the way I will always try to do it.
I’ve said it before and I’ll say it again. The insurance business is crooked. It wasn’t bad 40 years ago when I started, or even 10 years ago, but for the last 5 years the bean counters, attorneys, and computer mavens have carved up the insurance business to suit their own greed. The true professionals are largely gone. If anyone asks what I do, I tell them that I play a piano in a whorehouse.
Mr. Boggs, you are so very correct on all topics broached. THANK YOU for writing the truth and putting it out there. As someone else stated……… It is UP TO US! We MUST turn this negativity around. Learn a Lesson from this mess, Move Forward and make the future better, “For the SAKE of our clients.” THANK YOU FOR YOUR HONESTY – IT’S REFRESHING!
I believe your disappointment should not be in the younger adjustors that will follow your footsteps, but, perhaps in your own generation for your failure to properly mentor the future generation. As a “newbie” in insurance myself – I am reminded on a daily basis of the lack of knowledge of the insurance youth, but am surrounded by veteran insurance “professionals” with an absolute refusal to mentor the younger generation.
Insurance youth, I believe you misinterpreted my remarks, I am not blaming the younger adjusters for their lack of training and experience. I am placing the blame on the companies for failing to properly train and relying on technology and process rather than training and experience.
I am sorry you are unable to find an older adjuster in your company to mentor you, I would be thrilled to mentor a younger adjuster!
Attention insurance youth – don’t give up hope. Do find a company with a culture more compatible with your attitudes.
I believe the current economic cleansing will affect other insurers who have conducted business with the wrong attitude. That is – profit at all costs.
Quality? What is that? If the longtime adjusters aren’t helping you develop the attitude and skill to help THIER CLIENTS, RIGHT? Those clients you are helping are clients of everyone in your company who draws a paycheck. Ergo, everyone in your company has a stake in the way YOU SETTLE THE CLAIM!! If those schmokels don’t see the big picture there is a reason. Maybe your management does not recognize the importance of passing down the wisdom, and manages such.
well, someone at least is looking in the right direction. funny how we look at things and the association. for example, we looked and heard that AIG had financial troubles. when in reality it was AIGFP. because of the association of AIG, most folks are moving their products elsewhere. granted the AIG (insurance sector) is not in a bind, but the association is killing their business. if you noticed that parent companies, normally let the unit keep their name. they don’t slap another name with it. this is probably the worst problem that AIG did.
i believe in the way that Warren Buffett has it established. look afterall, the many companies he owns: DQ, GEICO, and many others.
I don’t believe commercial lines is or will be profitable. I admit, I haven’t looked at AIG’s financials. I’m generalizing because of what I know about commercial lines from experience. If an underwriter prices an account correctly, he will loose the account because of other incompetent carriers underpricing it. What good is booking a $100,000 premium which will with high probability produce losses that exceede the premium? The reason is that incompetent u/w managers push to get premium on the books even if the accounts are money losers! Then they tell premium audit to not only be an auditor but to also re-underwrite the risk. If the auditor who is always told to produce, produce, produce does his job, then the correct premium and codes will be used. But why should an auditor spend the time to do this when he will be chastized for not doing enough audits????????? Bottom line, the professionalism is gone in the industry. The emphasis has been on the streamlining of processes with no human intervention. Thus, agents and insureds try to circumvent the system to achieve premiums that are less than other carriers while the carriers suffer the losses due to incompetent managers. WHO IS BOOKING BUSINESS WITH AIG NOW? What happens to your E & O exposure if they go under leaving an insured without the protection they thought they were getting? If your not booking with AIG, then what exactly is going to happen to AIG’s future revenue stream? What exactly is the U.S. treasury buying, a defunct company with an impaired future revenue stream?
Wow “Dude”, I sure do feel bad for your clients. If you really think that we are as professional as used car salesmen and price is the only thing that matters, maybe you should be in a different profession.
I thought this was a great article. It could have connected the dots even further by suggesting that Credit Default Swaps, what got AIG into trouble in the first place, legally be considered “insurance” thus subject to the regulation and professionalism mentioned in the article.
The problem is the Community Reinvestment Act, not insurance professionalism. AIG was insuring subprime mortgage securities mandadted by the CRA. The mortgages were agitated for by ACORN and Barack Hussein Obama, their attorney. Fannie and Freddy’s CEO’s became Hussein’s advisors after making their millions, and gave Hussein more Fannie and Freddie largess than any politician but Chris Dodd (D), Senate Banking Committee chairman.
So, in a nutshell, Hussein and his thieving friends caused AIG’s problem: defaulting on credit default swaps. This of course started the panic, because everyone’s bad paper was insured by CDS’s.
But worry not: Hussein and the Dems are gonna fix it all up!
I thought we killed Saddam!! You mean, from the grave he is getting us back?!?!?! That sly devil.
Someone told me that the culture of those running the CDS business was a lot like a boiler room; I wonder what their degrees or designations were? I am glad that someone keeps bringing up that this was not the insurance business which causedn this mess; insurance is the profession I aspire to, for which I work and hold several designations, in addition to my bachelor’s degree and for which i am quite proud and worked hard to attain…There was a lot missing in the FINANCIAL group and you’ll see the emails and other proof that those in the lead at AIG were not keeping their eye on the insurance side but rather the money-making machine that pumped unsercured/unreserved credit default swaps; had these people engaged in any business education, I would have expected someone to mention that this house of cards could fall any time. I know the smoking gun will be found and it won’t be from the insurance sector; someone said it was the board, and I for one believe that.
Dude, You can have your opinion and we can have ours. There are pockets of unethical people in ALL professions, to the tune of about 20%! But your jaundiced attitude is probably noticed by your clients/customers and my attitude has always brought me praise because I really do care about the client. I worked in another industry and only took this job to fill in while I went back to school; but I found I thrived doing the right thing, even around those who try to commoditzed insurance and who only keep thier eye on the bottom line, while our noses should be to the grindstone. I can only hope that others with your attitude will eventually get out of the industry; we have two problems, those who work for the bottom line and those who don’t care to make a difference. If you don’t contribute to the problem, you are still guilty for going along. It is a very hard uphill battle but I go at it every day. Doing the right thing is not hard to remember, it’s just too hard for some to keep at.
Its about time someone addresses the issues I have been in the industry for 40+ yrs. and the quality of individuals that have come into the industry in the past 10 yrs is a joke all they care about is the money and when I got my brokers license. It was not taking courses for 52 hrs and passing a test you had to have the exp (years + a recommendation in writing from a employer stating that you were qualified to be a broker) the industry has gotten out of hand everyone got licensed and everyone became a broker- no distinguish between a solicitor and a broker- we have individuals in the industry that have no idea what to do or how to get the job done. You might say they can not work out of the box. I feel now the industry will see what happens when you have high paid individuals with designations-without the experience-knowledge. Maybe there will be some consideration to the people that are close to retirement that they are not too old to work in the industry and not be discriminated against as has been the case for the past 10 + years.
AIG- should not have been bailed out by the government. They should have been forced to take Buffet or Gates, or any of the other billionaires offers to infuse capitol into the company. This is a private industry that the government should not be able to over see. It’s bad enough with the State Comp Fund, do we want the government ruling our industry? Think about what would happen if they we’re to rule all insurance carriers?
What does AIG’s behavior have to do with my and my colleagues’ education and competence?
I agree that educational requirements are vital to our industry remaining competent and responsible and there is plenty of room for improvement in how we educate our new and existing agents, but what does that have to do with AIG’s behavior?
I don’t think we are bailing out AIG because they didn’t have a proper insurance education.
I am so tired of the industry GIANTS abusing their power and influence and instead of people holding THEM accountable for their actions they turn their sites on the industry professionals who are following the rules.
First MARSH and the contingency/profit sharing issues drizzled down to the little guy affecting our bottom line and now AIG’s behavior suddenly means that WE are uneducated and reckless? Seriously?
Clearly the giants are tougher to manage than the little guy but hold yourself accountable to either face the issue head on or stay quiet.
If you want to speak about accountability keep your eye on the ball or stop talking!