I am an insurance consultant working with several clients as a part-time risk manager, after having spent the first 20 years of my career working as a broker with 2 very highly regarded brokerage firms.
I see broker proposals every month from many different brokerage firms and then I talk to clients about their broker services.
I might write a book when I am done about how out-of-touch so many brokers are. Most clients laugh about brokers talking about the ‘high quality services’ they offer. Most clients roll their eyes when I bring up that one.
In my experience, most clients who say they like their current broker actually mean they really dislike other brokers they have met, and the current broker is better than average. They might also mean they are tired of dealing with broken promises (“I can deliver the lowest rates!”) and don’t want to waste time.
And the lies I have heard from brokers! Hilarious. I have also seen a couple of brokers commit insurance fraud, and when I pointed out fraud to one client, he actually threatened his broker with reporting to the district attorney.
Side Note: I heard from a sharp insurance E&O attorney in California that brokers are being advised to limit the detail in their proposals to remove the impression they are an “expert” in case the broker gets sued for E&O! One proposal I saw for a client paying $1mm for workers compensation and liability insurance had zero exclusions listed! From one the biggest brokerage firms in the world.
SERVICE!
Not to say there aren’t really good brokers out there. But too many average brokers or worse think they are hot stuff when they aren’t, even in the client’s mind.
I work for a broker and we welcome any and all feedback from our clients on our service. Unfortunately, it is not often provided. Without it, we can certainly identify what we think is valuable given certain information and share that with them as their advisor but of course we need to listen and hear what their concerns are so we can work on that together. While some may think that more is better, not all clients feel that way. Clients are busy and have little time these days to devote to all of the many aspects of their jobs. So, it is a balancing act – to find that desired level of communication and expectations. Developing formal written service plans encourages collaboration to identify desired commitments which can then act as a guide to ensure those expectations are carried out. We work hard to help our clients’ businesses be as successful as they can be, including putting them in touch with other valued resources when we know that would be in their best interests.
The key issue I see is over-promising and under-delivering. It is epidemic with brokers trying to secure new business.
Some services ARE valuable, such as claims management if done by experts and safety and loss control.
But many agencies (most?) are first/last and always sales organizations, and so they treat the people providing those services as an expense and overwhelm them with work.
What is promised may be a legitimate service. What is delivered is overworked staff who fail to deliver. Worse, some agencies charge-back the cost of such services to producers, who then refuse to deliver on promises that would cut into the producer’s income.
Well said !! Many times during my risk management practice days, I was asked by a client if I could refer them to another agent, or could I be their agent. Since many of my clients were referrals from an agent, I would have to decline. While I had/have all needed licenses, I would also decline to be their agent. Doing either would have spelled big trouble for my practice. If the referral was from an attorney, about 40%, I had no problem recommending a couple of agents, never just one, but I refused to take on the role of their agent. Also, there were a number of times I called the agent and told him he needed to pay more attention to his client. As far as the big brokers, the sales people are just that. Once the client has been landed, all service is passed off to some staff person. They only see the sales person at renewal. Since I had no $$ interest in the premium or commissions, my advice was always well received. I told them what they needed to hear.
The clients have the right to obtain insurance by themselves if they don’t think I am hot stuff. Obviously, the case you cite here is one in which my 10th grade son could work on. There are many cases that I have stayed up two days working on because the USDA inspector wanted a COI on a particular case. It was costing the insured $87,000 a day until coverage was put in place.
I have a large trucking firm that can’t drop a load at Walmart until I say so. I could go on all night and I can certainly tell you that my clients think I am more than hot stuff… I am their savior. You start working on very intricate cases that involve multiple classes and coverage that involves an insurance counselor working for the other firm and they pay me well. Some cases I worked on had only 4 such type businesses in the world. Try to find them coverage while their begging you every 2 hours on the phone. You may have not had the experience as I have but I can tell you that I run the show with the carriers and the clients.
Not only brokers, captive agents as well. In my world, working for a large name brand company who sponsors a certain golfer, I see the lack of knowing the product and how to apply it every day! Agents are more concerned about writing policies that are cheaper than the competition than whether or not the coverage actually protects the client. Perhaps that is due to the company believing it is best to have more agents than a particular area can sustain, either way, agents around me are not doing any favors for their clients!
That’s not a universal statement. IA’s are only as good as the companies they manage to get appointments with. An auto insurance customer who has had 5 years prior, no accidents, middle aged is not better off with an IA that only has non-standard auto companies available. I see this ALL the time, and the vast majority of the time, a customer like that is far better off with a name brand captive, any of them, than an IA who doesn’t represent Progressive, Travelers, or Safeco/Liberty, or one of the hand full of Midwest super regionals.
I’m only two years into my career as an agent at my family’s small brokerage, but I have already seen plenty of client’s policies coming from those “large brand name companies” that have bare bones coverage and I can only assume that it’s done to keep the rate competitive because it’s not doing the insured any favors otherwise. We see it from other brokers as well. It seems like a race to the bottom, and everybody loses in the end.The agent’s piece of the pie gets smaller as the premium shrinks, customers don’t have enough coverage to protect them or their assets and companies have a shrinking bottom line. We owe it to our customers to explain why they should carry higher liability limits and other relevant coverage options on their policy. If they want to make an informed decision after that and still go for the lowest rate, then we’ve at least done our part.
Yep, I see that all the time. Quite frequently I end up selling policies for more than what they’re paying, even if they call in looking for a better rate. And, the ones who don’t accept the proposal for correct coverages and still want to go with basic coverage have to sign lots of coverage rejection forms, or, at a minimum, reply in an email saying they want basic coverage so I have something in writing. Those are the first people to accuse me of not doing my job when the claim denial comes through. The sad thing is I can’t even take pleasure in the “I told you so” because no one likes to see a client suffer a financial loss, regardless of whether it was self inflected or not.
New business counts, the current customer’s in doubt; get the new commission no shame no commission you’re out of the game. The manager’s at your door what did you write yesterday for me or I’ll email you no more….
It’s fairly obvious the excessive insurance industry advertising (pre covid) is part of the systemic problem of ‘good results’ = ‘New business’. There are a couple that do mention coverages, but some of the weird drama is a bit overboard.
Spot on. Allstate even charges lower rates for new customers than existing customers in many states on their standard auto business (Yet they offer a loyalty discount on non-standard business and homeowners), even those that is completely unsound pricing practice. There’s a reason State Farm has stayed number one for so long – Those big renewal discounts, which are actually a sound pricing practice because long term customers are more profitable.
okt0ber- I see SF agents grossly under insure homes here on the coast of SC every day. The replacement cost estimator they use, along with every other carrier, is used to reduce coverage on competitive quotes to win business from an agent like myself that actually has a conversation with his clients about what rebuild cost actually means.
Bill, I like your article. From a personal lines point of view, I wish it was the reality of today’s market place. There are a few agents that I know, that can fight that fight, and take the time to explain to a customer that will listen, and maybe you land a percentage of those that you otherwise would not. The business today is really about scale. Carriers only care about new production. And, they are pressuring agents into selling volume. There is only so much time in the day. In the time it would take me to get a prospect to actually talk with me over the phone or in person, and after going over every little detail about what coverage they might need, I could have sold 3 other households. Some consumers will take your free advice, and go buy a policy down the street. I am not saying I like the business where it is today. I just have accepted that this is the reality we are in. Carriers will sell to the customer direct at the detriment of the agent, and the agent is forced to sell to the customer at the detriment of the carrier now. If you cannot produce enough volume with the carriers, they remove the agent’s appointment. Consumers cannot go more than 5 minutes without hearing an insurance advertisement on the radio, TV or web, about how you better shop your rates daily, otherwise you are getting screwed as a consumer. The carriers have created this problem, and agents have not made it better. It is a race to the bottom. So in some small towns, I am sure that “adding value” still works for a small agent that has time to sit down with customers. For the captives, they have no other choice but to try to “add value.” I just do not see that where I am at. Just my two cents on what I see on a daily basis and experience. When is the last time you had a client contact you because they are looking for better service?
Good article, Bill. I wish more agents in my office would take heed. They know very little about coverage and they sell price. I’ve been in this town for 25+ years and agents have been selling price all those years which results in customers that will change agents for $500. I had 28 years in the business before moving here and had never worked like this before. It took a few years to figure out what caused the constant shopping…the agents made it happen.
I am a marketing and communications consultant who specializes in helping independent agencies communicate their value to their prospects and clients. This article is very timely because I’ve been discussing with some of my clients recently how they can continue to provide and add value to set themselves apart not only from the direct-to-consumer carriers out there but from other independent agents. This study supports our observation that even though most agents will say “customer service” is their differentiator, it’s not always matching the customer’s expectation.
Funny how Nationwide takes this stand now after forcing their captive agents to go indep and making the agents pay for their Nationwide book of business…but I guess that’s beside the point?
Let’s face it, most major carriers like USAA, State Farm, etc. hired agents based on demographics or diversity issues. They don’t really care if the agent grossly under insures the home as long as the auto and life policies are sold. I see it every day here on the coast of SC.
The same goes for the big builders that have their own insurance agencies. Grossly under insured home proposals are put on the table for the new home buyer to simply see the lowest monthly cost once added to the mortgage payment.
So maybe the title to the article should really be, “Carriers Will Appoint Anyone, Because It’s Really About Our Bottom Line”.
Hey Jack, I would LOVE to have an agency full of customers just like retired risk manager: Not purchasing insurance based on the best rate. He is happy with not having rate options, and he is a long term customer of a captive / call center company. Where do I find clients like this? Most of mine beat me down on rate.
August 15, 2020 at 7:37 am
retired risk manager says:
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Having a license is just a formality. Also, I shop every two years. Never been able to beat USAA’s price or service. Had a tree fall on a vehicle on a Sunday, adjuster was on site at 0830 the next morning. And I live way out in the woods. As a former officer, I also get a very nice “shareholder” distribution every year. My HO costs $2,000 per year. Closest quote I’ve gotten was over $3,000. I’ve found that those who do not like USAA usually lack one very basic requirement …. military service.
USAA has marketed themselves as a company connected to the military. They are not in any way part of the military, they have just marketed themselves(in a genius way I might add) to give the impression that they are an extension of the military. Yes, they do have a somewhat loose requirement (looser now than ever) so that you must have an uncle who was once related twice removed to someone that used to be in the military. Like many other carriers, they are a good company. I just wrote a 46 year member of USAA over to my agency. For the same or better coverage, I saved him $2,000 / year. Needless to say, he regretted not checking with and IA sooner. Of course, USAA is not always uncompetitive. But, like any other company, they are not always the best option. I commend Risk Manager’s loyality to a carrier. We need more of this, no matter if customers are with State Farm, Allstate, Travelers, Progressive, Safeco, you name it.
September 3, 2020 at 1:29 pm
Jack says:
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retired risk manager- ” I’ve found that those who do not like USAA usually lack one very basic requirement …. military service.” LMAO you should enlarge your friend circle, I know it’s hard way in the woods, but you can do it.
I have retired military that work for me as producers. Once they saw what USAA was doing to them, they stopped being so loyal given USAA is not the company it once was. It’s simply a large broker that plays the “military card” to get you money. They write for some of the same carriers I do, they just don’t want their customers to know it. Educate yourself a little more about the company, it’s not who you think it is. My phone rings off the hook as the hurricanes come in , and most of the time it’s the USAA clients that had hurricane coverage left out of their policies. Really sucks for them, ya know.
August 16, 2020 at 10:35 am
lonestar says:
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Dealing with a call center company employee, that offers only one company at one rate, IMHO, is not unlike dealing with a FORD only dealership, and their employees when buying a car. Let’s go a step further and assume that you have to be a member of FORD MOTOR CREDIT Union in order to purchase a FORD made vehicle. Are they going to be able to offer you a truly unbiased opinion on the pros / cons of buying only a FORD? Let’s compare this with dealing with a dealership that offers FORD, CHEVY, DODGE, TOYOTA, NISSAN, HONDA, and about 20 other brands of cars. Which employee / agent is more likely to give you an unbiased opinion? I think the answer is obvious.
I got my insurance license in 1972. We are a family owned agency, my wife is office manager and my son and I produce and service customers. Sometime I think we service our customers too much. Anytime there is a problem between our customer and the insurance company we get involved and help resolve the problem. It’s the same with claims. I wish we could sell coverages but the insurance companies stopped this with advertising that says everyone saves $500 by switching. Insureds don’t want to hear about coverages anymore but what is your lowest rate. That is, until they have a claim and then want cadillac coverage. Most of the new agents entering the business with the captive companies don’t care about coverage they just won’t to have the lowest rate. The SF agents are the worst. A SF agent used to be a well respected person in the community, a member of the 1ST Church, ethical and never sold an auto policy with less than 100/300 liability limits. Today they will fight you over a minimum liability only policy. I recently had a case where one of our insured’s called to cancel their homeowner policy. I asked the insured to send me a copy of the SF dec page. They saved $60 per year but our deductible was $500 and the SF policy had a 1% deductible. So a house valued at $213,000 would have a $2,130 deductible as opposed to our $500. I called the insured and asked them to get a copy of their dec page so I could go over this with them. I pointed out the 1% deductible and they said the agent told them that didn’t apply to everything. If you looked at the top right of the dec page it stated, “your deductible is 1% of coverage A and this deductible applies to ALL losses. This is the kind of thing an agent has to fight everyday. The insured went from a $500 deductible to a $2,130 deductibe, but they saved $60 per year. It’s all about price, until the claim.
The concerns you express here are the same reason my agency will only sell auto and home for a service to our large commercial customers. They have money and a decent IQ so price is a concern but not the whole story.
Selling insurance is like a Doctor. You can go see the ear, eye and nose Doctor, or I can cure your cancer.
In every professional occupation you have success in different levels. It is the right customer with your education that you will be judged by. There are many clients that need help out there and they don’t look for the agent who has a policy in his trunk. It is better to be in a unique position and offer them something that does not equate to a lizard and a fat lady running around a house. I sell my education along with solving their problems in commercial business with a cross sell. I sell myself and give them insurance as a free gift. Good luck!
Eddie, you are correct the insurance industry as a whole is a sprint to the bottom. Lower premiums equals lower commissions and higher loss ratios which result in rate increases and constant re-marketing. So it ultimately turns into more work for less money with insured typically having inadequate coverage. A lose/lose for everyone involved.
From a risk management stand point, I would like to dive into the scenario you provided and ask if you’re doing a disservice to your client by keeping their deductible at $500. That’s a rather low deductible for a $213k home. If they had a loss valued at $1k, would you recommend they pay out of pocket or file through the carrier? Maybe their better served with a 1% deductible than the $500 and the SF agent pointed this out from a risk management standpoint? Maybe? Especially if they have no Homeowner claims and you wouldn’t suggest they file a low value claim through the insurer. Just food for thought.
Race to bottom is right. For example State Farm changed their contract for agent after 2005 and continually modified to reward (punish) for growth or lack of. Against conventional metrics, they value pif instead of revenue. Agts were even taught or encouraged to quote every one at state minimums to get in the door then have the conversation about liability limits after. This pressure to write policy count because it can affect compensation significantly causes/ed a large amount of bad or underinsured business..
Captive, research the trials and tribulations of two SF agents in California, Pyorre and Weir. Long time successful agents, but the 2005 contract REQUIRED them to get series 6/63 licenses and sell SF securities. Most P/C agents I know don’t OWN securities let alone understand them enough to sell them. So, on top of overaggressive sales tactics, they are also pressured to sell mutual funds and the like. And if they don’t…….commission rate goes in the pishaloo.
I am an insurance consultant working with several clients as a part-time risk manager, after having spent the first 20 years of my career working as a broker with 2 very highly regarded brokerage firms.
I see broker proposals every month from many different brokerage firms and then I talk to clients about their broker services.
I might write a book when I am done about how out-of-touch so many brokers are. Most clients laugh about brokers talking about the ‘high quality services’ they offer. Most clients roll their eyes when I bring up that one.
In my experience, most clients who say they like their current broker actually mean they really dislike other brokers they have met, and the current broker is better than average. They might also mean they are tired of dealing with broken promises (“I can deliver the lowest rates!”) and don’t want to waste time.
And the lies I have heard from brokers! Hilarious. I have also seen a couple of brokers commit insurance fraud, and when I pointed out fraud to one client, he actually threatened his broker with reporting to the district attorney.
Side Note: I heard from a sharp insurance E&O attorney in California that brokers are being advised to limit the detail in their proposals to remove the impression they are an “expert” in case the broker gets sued for E&O! One proposal I saw for a client paying $1mm for workers compensation and liability insurance had zero exclusions listed! From one the biggest brokerage firms in the world.
SERVICE!
Not to say there aren’t really good brokers out there. But too many average brokers or worse think they are hot stuff when they aren’t, even in the client’s mind.
I work for a broker and we welcome any and all feedback from our clients on our service. Unfortunately, it is not often provided. Without it, we can certainly identify what we think is valuable given certain information and share that with them as their advisor but of course we need to listen and hear what their concerns are so we can work on that together. While some may think that more is better, not all clients feel that way. Clients are busy and have little time these days to devote to all of the many aspects of their jobs. So, it is a balancing act – to find that desired level of communication and expectations. Developing formal written service plans encourages collaboration to identify desired commitments which can then act as a guide to ensure those expectations are carried out. We work hard to help our clients’ businesses be as successful as they can be, including putting them in touch with other valued resources when we know that would be in their best interests.
The key issue I see is over-promising and under-delivering. It is epidemic with brokers trying to secure new business.
Some services ARE valuable, such as claims management if done by experts and safety and loss control.
But many agencies (most?) are first/last and always sales organizations, and so they treat the people providing those services as an expense and overwhelm them with work.
What is promised may be a legitimate service. What is delivered is overworked staff who fail to deliver. Worse, some agencies charge-back the cost of such services to producers, who then refuse to deliver on promises that would cut into the producer’s income.
Well said !! Many times during my risk management practice days, I was asked by a client if I could refer them to another agent, or could I be their agent. Since many of my clients were referrals from an agent, I would have to decline. While I had/have all needed licenses, I would also decline to be their agent. Doing either would have spelled big trouble for my practice. If the referral was from an attorney, about 40%, I had no problem recommending a couple of agents, never just one, but I refused to take on the role of their agent. Also, there were a number of times I called the agent and told him he needed to pay more attention to his client. As far as the big brokers, the sales people are just that. Once the client has been landed, all service is passed off to some staff person. They only see the sales person at renewal. Since I had no $$ interest in the premium or commissions, my advice was always well received. I told them what they needed to hear.
The clients have the right to obtain insurance by themselves if they don’t think I am hot stuff. Obviously, the case you cite here is one in which my 10th grade son could work on. There are many cases that I have stayed up two days working on because the USDA inspector wanted a COI on a particular case. It was costing the insured $87,000 a day until coverage was put in place.
I have a large trucking firm that can’t drop a load at Walmart until I say so. I could go on all night and I can certainly tell you that my clients think I am more than hot stuff… I am their savior. You start working on very intricate cases that involve multiple classes and coverage that involves an insurance counselor working for the other firm and they pay me well. Some cases I worked on had only 4 such type businesses in the world. Try to find them coverage while their begging you every 2 hours on the phone. You may have not had the experience as I have but I can tell you that I run the show with the carriers and the clients.
Not only brokers, captive agents as well. In my world, working for a large name brand company who sponsors a certain golfer, I see the lack of knowing the product and how to apply it every day! Agents are more concerned about writing policies that are cheaper than the competition than whether or not the coverage actually protects the client. Perhaps that is due to the company believing it is best to have more agents than a particular area can sustain, either way, agents around me are not doing any favors for their clients!
Independent Agents are far better than Brokers or Captives.
That’s not a universal statement. IA’s are only as good as the companies they manage to get appointments with. An auto insurance customer who has had 5 years prior, no accidents, middle aged is not better off with an IA that only has non-standard auto companies available. I see this ALL the time, and the vast majority of the time, a customer like that is far better off with a name brand captive, any of them, than an IA who doesn’t represent Progressive, Travelers, or Safeco/Liberty, or one of the hand full of Midwest super regionals.
Who DOES represent…. not doesn’t. No edit option on here, still.
I’m only two years into my career as an agent at my family’s small brokerage, but I have already seen plenty of client’s policies coming from those “large brand name companies” that have bare bones coverage and I can only assume that it’s done to keep the rate competitive because it’s not doing the insured any favors otherwise. We see it from other brokers as well. It seems like a race to the bottom, and everybody loses in the end.The agent’s piece of the pie gets smaller as the premium shrinks, customers don’t have enough coverage to protect them or their assets and companies have a shrinking bottom line. We owe it to our customers to explain why they should carry higher liability limits and other relevant coverage options on their policy. If they want to make an informed decision after that and still go for the lowest rate, then we’ve at least done our part.
Yep, I see that all the time. Quite frequently I end up selling policies for more than what they’re paying, even if they call in looking for a better rate. And, the ones who don’t accept the proposal for correct coverages and still want to go with basic coverage have to sign lots of coverage rejection forms, or, at a minimum, reply in an email saying they want basic coverage so I have something in writing. Those are the first people to accuse me of not doing my job when the claim denial comes through. The sad thing is I can’t even take pleasure in the “I told you so” because no one likes to see a client suffer a financial loss, regardless of whether it was self inflected or not.
New business counts, the current customer’s in doubt; get the new commission no shame no commission you’re out of the game. The manager’s at your door what did you write yesterday for me or I’ll email you no more….
It’s fairly obvious the excessive insurance industry advertising (pre covid) is part of the systemic problem of ‘good results’ = ‘New business’. There are a couple that do mention coverages, but some of the weird drama is a bit overboard.
Spot on. Allstate even charges lower rates for new customers than existing customers in many states on their standard auto business (Yet they offer a loyalty discount on non-standard business and homeowners), even those that is completely unsound pricing practice. There’s a reason State Farm has stayed number one for so long – Those big renewal discounts, which are actually a sound pricing practice because long term customers are more profitable.
okt0ber- I see SF agents grossly under insure homes here on the coast of SC every day. The replacement cost estimator they use, along with every other carrier, is used to reduce coverage on competitive quotes to win business from an agent like myself that actually has a conversation with his clients about what rebuild cost actually means.
From an agent who sells coverage, not price:
https://insurancecommentary.com/selling-on-coverage-not-price/
Bill, I like your article. From a personal lines point of view, I wish it was the reality of today’s market place. There are a few agents that I know, that can fight that fight, and take the time to explain to a customer that will listen, and maybe you land a percentage of those that you otherwise would not. The business today is really about scale. Carriers only care about new production. And, they are pressuring agents into selling volume. There is only so much time in the day. In the time it would take me to get a prospect to actually talk with me over the phone or in person, and after going over every little detail about what coverage they might need, I could have sold 3 other households. Some consumers will take your free advice, and go buy a policy down the street. I am not saying I like the business where it is today. I just have accepted that this is the reality we are in. Carriers will sell to the customer direct at the detriment of the agent, and the agent is forced to sell to the customer at the detriment of the carrier now. If you cannot produce enough volume with the carriers, they remove the agent’s appointment. Consumers cannot go more than 5 minutes without hearing an insurance advertisement on the radio, TV or web, about how you better shop your rates daily, otherwise you are getting screwed as a consumer. The carriers have created this problem, and agents have not made it better. It is a race to the bottom. So in some small towns, I am sure that “adding value” still works for a small agent that has time to sit down with customers. For the captives, they have no other choice but to try to “add value.” I just do not see that where I am at. Just my two cents on what I see on a daily basis and experience. When is the last time you had a client contact you because they are looking for better service?
Good article, Bill. I wish more agents in my office would take heed. They know very little about coverage and they sell price. I’ve been in this town for 25+ years and agents have been selling price all those years which results in customers that will change agents for $500. I had 28 years in the business before moving here and had never worked like this before. It took a few years to figure out what caused the constant shopping…the agents made it happen.
I am a marketing and communications consultant who specializes in helping independent agencies communicate their value to their prospects and clients. This article is very timely because I’ve been discussing with some of my clients recently how they can continue to provide and add value to set themselves apart not only from the direct-to-consumer carriers out there but from other independent agents. This study supports our observation that even though most agents will say “customer service” is their differentiator, it’s not always matching the customer’s expectation.
Funny how Nationwide takes this stand now after forcing their captive agents to go indep and making the agents pay for their Nationwide book of business…but I guess that’s beside the point?
Let’s face it, most major carriers like USAA, State Farm, etc. hired agents based on demographics or diversity issues. They don’t really care if the agent grossly under insures the home as long as the auto and life policies are sold. I see it every day here on the coast of SC.
The same goes for the big builders that have their own insurance agencies. Grossly under insured home proposals are put on the table for the new home buyer to simply see the lowest monthly cost once added to the mortgage payment.
So maybe the title to the article should really be, “Carriers Will Appoint Anyone, Because It’s Really About Our Bottom Line”.
https://www.uphelp.org/hundreds-fire-victims-finding-themselves-vastly-underinsured
USAA does not use “agents”. Everyone you talk to is an employee. Member since 1987.
retired risk mgr- you can call them “unicorns” if you want. What does the Department of Insurance call them?
PS- not a member, and never would be after I see how their unicorns write business.
Hey Jack, I would LOVE to have an agency full of customers just like retired risk manager: Not purchasing insurance based on the best rate. He is happy with not having rate options, and he is a long term customer of a captive / call center company. Where do I find clients like this? Most of mine beat me down on rate.
Having a license is just a formality. Also, I shop every two years. Never been able to beat USAA’s price or service. Had a tree fall on a vehicle on a Sunday, adjuster was on site at 0830 the next morning. And I live way out in the woods. As a former officer, I also get a very nice “shareholder” distribution every year. My HO costs $2,000 per year. Closest quote I’ve gotten was over $3,000. I’ve found that those who do not like USAA usually lack one very basic requirement …. military service.
USAA has marketed themselves as a company connected to the military. They are not in any way part of the military, they have just marketed themselves(in a genius way I might add) to give the impression that they are an extension of the military. Yes, they do have a somewhat loose requirement (looser now than ever) so that you must have an uncle who was once related twice removed to someone that used to be in the military. Like many other carriers, they are a good company. I just wrote a 46 year member of USAA over to my agency. For the same or better coverage, I saved him $2,000 / year. Needless to say, he regretted not checking with and IA sooner. Of course, USAA is not always uncompetitive. But, like any other company, they are not always the best option. I commend Risk Manager’s loyality to a carrier. We need more of this, no matter if customers are with State Farm, Allstate, Travelers, Progressive, Safeco, you name it.
retired risk manager- ” I’ve found that those who do not like USAA usually lack one very basic requirement …. military service.” LMAO you should enlarge your friend circle, I know it’s hard way in the woods, but you can do it.
I have retired military that work for me as producers. Once they saw what USAA was doing to them, they stopped being so loyal given USAA is not the company it once was. It’s simply a large broker that plays the “military card” to get you money. They write for some of the same carriers I do, they just don’t want their customers to know it. Educate yourself a little more about the company, it’s not who you think it is. My phone rings off the hook as the hurricanes come in , and most of the time it’s the USAA clients that had hurricane coverage left out of their policies. Really sucks for them, ya know.
Dealing with a call center company employee, that offers only one company at one rate, IMHO, is not unlike dealing with a FORD only dealership, and their employees when buying a car. Let’s go a step further and assume that you have to be a member of FORD MOTOR CREDIT Union in order to purchase a FORD made vehicle. Are they going to be able to offer you a truly unbiased opinion on the pros / cons of buying only a FORD? Let’s compare this with dealing with a dealership that offers FORD, CHEVY, DODGE, TOYOTA, NISSAN, HONDA, and about 20 other brands of cars. Which employee / agent is more likely to give you an unbiased opinion? I think the answer is obvious.
I got my insurance license in 1972. We are a family owned agency, my wife is office manager and my son and I produce and service customers. Sometime I think we service our customers too much. Anytime there is a problem between our customer and the insurance company we get involved and help resolve the problem. It’s the same with claims. I wish we could sell coverages but the insurance companies stopped this with advertising that says everyone saves $500 by switching. Insureds don’t want to hear about coverages anymore but what is your lowest rate. That is, until they have a claim and then want cadillac coverage. Most of the new agents entering the business with the captive companies don’t care about coverage they just won’t to have the lowest rate. The SF agents are the worst. A SF agent used to be a well respected person in the community, a member of the 1ST Church, ethical and never sold an auto policy with less than 100/300 liability limits. Today they will fight you over a minimum liability only policy. I recently had a case where one of our insured’s called to cancel their homeowner policy. I asked the insured to send me a copy of the SF dec page. They saved $60 per year but our deductible was $500 and the SF policy had a 1% deductible. So a house valued at $213,000 would have a $2,130 deductible as opposed to our $500. I called the insured and asked them to get a copy of their dec page so I could go over this with them. I pointed out the 1% deductible and they said the agent told them that didn’t apply to everything. If you looked at the top right of the dec page it stated, “your deductible is 1% of coverage A and this deductible applies to ALL losses. This is the kind of thing an agent has to fight everyday. The insured went from a $500 deductible to a $2,130 deductibe, but they saved $60 per year. It’s all about price, until the claim.
The concerns you express here are the same reason my agency will only sell auto and home for a service to our large commercial customers. They have money and a decent IQ so price is a concern but not the whole story.
Selling insurance is like a Doctor. You can go see the ear, eye and nose Doctor, or I can cure your cancer.
In every professional occupation you have success in different levels. It is the right customer with your education that you will be judged by. There are many clients that need help out there and they don’t look for the agent who has a policy in his trunk. It is better to be in a unique position and offer them something that does not equate to a lizard and a fat lady running around a house. I sell my education along with solving their problems in commercial business with a cross sell. I sell myself and give them insurance as a free gift. Good luck!
Eddie, you are correct the insurance industry as a whole is a sprint to the bottom. Lower premiums equals lower commissions and higher loss ratios which result in rate increases and constant re-marketing. So it ultimately turns into more work for less money with insured typically having inadequate coverage. A lose/lose for everyone involved.
From a risk management stand point, I would like to dive into the scenario you provided and ask if you’re doing a disservice to your client by keeping their deductible at $500. That’s a rather low deductible for a $213k home. If they had a loss valued at $1k, would you recommend they pay out of pocket or file through the carrier? Maybe their better served with a 1% deductible than the $500 and the SF agent pointed this out from a risk management standpoint? Maybe? Especially if they have no Homeowner claims and you wouldn’t suggest they file a low value claim through the insurer. Just food for thought.
Race to bottom is right. For example State Farm changed their contract for agent after 2005 and continually modified to reward (punish) for growth or lack of. Against conventional metrics, they value pif instead of revenue. Agts were even taught or encouraged to quote every one at state minimums to get in the door then have the conversation about liability limits after. This pressure to write policy count because it can affect compensation significantly causes/ed a large amount of bad or underinsured business..
Captive, research the trials and tribulations of two SF agents in California, Pyorre and Weir. Long time successful agents, but the 2005 contract REQUIRED them to get series 6/63 licenses and sell SF securities. Most P/C agents I know don’t OWN securities let alone understand them enough to sell them. So, on top of overaggressive sales tactics, they are also pressured to sell mutual funds and the like. And if they don’t…….commission rate goes in the pishaloo.