P&C Ever To Follow Individual Health Commissions

Oct 5, 2016

  1. insurance1822
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    insurance1822 Guru

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    I don't understand the health insurance markets, but I'm curious if anybody knows a reason why P&C won't go the same direction (0% commission.)
     
  2. whatyouwantfinally
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    whatyouwantfinally Expert

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    Well, health commissions tanked because the government stepped in and changed the game with regulations on their margins and pushing a huge part of the individual market into a limited number of unprofitable, subsidized plans that people often seek out via the direct route. On top of that, health agents don't serve a huge purpose in terms of servicing ongoing clients. AND, there are still people making money selling health insurance, just way less.

    P&C could go that route but it wouldn't be for the same reasons. I don't see politicians declaring a national P&C insurance crisis and going Godzilla with regulations and more socialized push anytime soon. But if it's possible to phase out commissions without sacrificing profitability it's going to happen. If a drop from 15% to 12% has nothing but good results, only an idiot wouldn't eventually try 9% and so on.

    Even if it's inevitable, there are ways to slow it so it so our "generation" of agencies aren't the ones who are phased out. Most of us, anyway. If the heavy hitters make conscious moves placing business to ensure the companies that treat us better have better bottom lines than the ones who don't we could be well into retirement before the party ends.
     
  3. insurance404
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    insurance404 Super Genius

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    whatyouwantfinally - You are correct that most individual health brokers done service clients well. Yet our agency does quite a bit for our clients. I have about 1,100 individuals and automated the process during Open Enrollment (in a positive way to help clients).

    Commissions for 2019 plans are finally starting to increase in Washington State, so able to make money again. We then cross sell our clients into other products, kinda a "gateway drug", lol.

    If a large company like Amazon ever gets into the insurance market, that would be the biggest worry for most agencies that are not innovative.
     
  4. Markthebroker
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    Markthebroker Guru

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    Yeah, I agree with everyone here so far. I'm 100% p&c commercial. The reason health is so screwed up is the government intervention. The scariest 12 words in the English language are "Hello, I am with the government, and I am here to help".

    Call center and internet and AI direct writers are the biggest threat to traditional personal p&c agencies, both captive and indy. That was pretty clear when I got into the insurance game 7 years ago, and is crystal clear now. That's why I immediately went indi commercial. So far we are pretty much untouched, and will (hopefully) be the last to suffer, at least on the p&c side. Overall the biggest threats to p&c agents is going to be the advance of internet insurance, call center insurance, and ai. Most personal p&c is pretty scaleable from a sales point of view.
     
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