The Future of P&C - Bright or Bleak?

[Derrick]

Man, isn't that the truth. I can't tell you how many times I was able to close a prospect just by talking about having to call up a direct carrier on an 800 number for service.

I think I've only met a handful of people who faithfully shop purely by price every single year that actually keep their auto insurance year round. I mean maybe 5? Many other people are willing to sacrifice some price for value, which is why I think our jobs are pretty safe as long as we can move forward with technology, expertise in "niche" fields (and access to carriers), and targeted marketing.

 

[InsCommentary]

The commoditization of personal lines is a myth perpetrated by carriers selling on price, along with the comparative rating web sites that lead consumers to believe that the only difference between the products and services of a top tier insurer and a nonstandard insurer is price. These players are interested in cash flow. They are not the least bit interested in protecting American families from financial ruin. They do not understand that our industry enables the country's economic engine. They are clueless that the purpose of insurance is to insure. The challenge to insurance professionals is to expose this myth and do the right thing for the right reason.

 

[Beachguy]

I see commercial lines staying put for a long time. Every business owner I know even the younger 20 something. They want a "guy" not an online call center. Commercial will always remain a relationship business. Personal not so much ...unless it's your commercial client.

 

[ARus]

But will it necessarily be bad? I think agents and agencies are going to have to specialize and know their customers a bit more. So what if we see more, say, specializing in in-home daycare. Instead of just generically offering such service, agencies will have expertise, as well as carriers that specialize in such coverage in a way that protects said daycare. It's a win-win for either agencies that can jump in that hole early, or perhaps find new niches going forward.

Of course, there are other specific markets out there, but this generic "home, auto, and business" theme will go away. I think we're going to have to target specific markets, as well as have specific expertise for those markets going forward. Or we'll get left behind, like insurance1822 will.

Just my opinion though.

ABSOLUTELY agree. Agents should become Agents, no sales people. Thank you for what you wrote above I have my niche and digging there. It grows slower, but retention is HUGE.

 

[GXR2]

Travelers cut commissions from 15% to 12% ... The following year, we wrote more new business then we ever had w/ Travelers.

Why did you write more business with a carrier that cut your commission?

 

[insurance1822]

^ I didn't, the group as a whole did.

 

[Derrick]

I was thinking about the way direct, but also independent carriers are going to get burned. First of all, regionals are great. They treat us well and we will treat them well. Not just on the commission and bonus side but also not offering an alternative, direct option where you may save a few dollars.

There's no doubt we send regionals preferred business over say, SafeCo, or Travelers, or any of the other big independent carriers that are trying to cut us out. I think it's natural that we "treat other how we want to be treated." People don't say that because it's not true, you know?

What will happen is when our preferred companies feel like taking more risks because we send them good, profitable business, they will start accepting more standard. Again, due to our field underwriting that these big insurance companies are trying to cut out, we will send them only good standard business while the price shoppers, who are typically the type of people to lapse, get big PIP claims as well as property damage, etc etc, can be sent either directly or through agency channels to these insurance companies that are trying to cut us out. Again, they show no loyalty to us, so why would we show an ounce of loyalty to them? If they decide to non-renew us for writing bad biz, that's fine, there's 20 other price competitive carriers that are trying to cut us out that would love to give us an appointment.

Anyway, big insurance companies that are trying to cut us out will see huge losses and deteriorating financials while profitable regionals will start stepping into the national spotlight and embrace the agency line much like SafeCo, Kemper, Travellers did 20-30 years ago before they started looking purely at cost/price.

 

[Family Man]

I just completed my P&C license/exam in Indiana. I have a small/local life and health book of business and looking to expand on that base and beyond. No staff, other than an assistant stopping in a few hours a week for filing/organizing. What will the next 10 years look like in my case?

Regarding today, Is there a carrier who will even look at an agent who may or may not get more than a hundred apps in a year?

 

[Derrick]

I just completed my P&C license/exam in Indiana. I have a small/local life and health book of business and looking to expand on that base and beyond. No staff, other than an assistant stopping in a few hours a week for filing/organizing. What will the next 10 years look like in my case?

Regarding today, Is there a carrier who will even look at an agent who may or may not get more than a hundred apps in a year?

I think a full fledged approach is the way to go. Be more of a boutique outfit. Be "the insurance guy!" If you've got their P&C, L&H you can sell them on the fact that they spend thousands of dollars a year on insurance and by having everything of theirs (assuming you have the expertise), you can give their insurance more TLC. By having everything you don't need 1,000 clients, you can have 400 clients but make the same amount of money, giving you time to service their accounts in more depth than any 1800 number they call for each individual insurance.

Just my opinion.

 

[shawnmwalker]

Brightest it has ever been!