Is an agency selling insurance I.D. cards and evidences of insurance for a price? That is all some insureds want, and it makes sense to only sell them what they want, right? Do these insureds then even need an agent? What value does an agent selling pure price really provide that software cannot?
Consumers do get two benefits. First, they benefit from the agency’s E&O policy when coverage proves inadequate. Second, they gain false comfort by believing agents know what they are doing.
Computer processing is so fast and powerful today that, when combined with massive advertising, the agent is often obviated. This is a fact. It is not an opinion, no matter how much many readers may protest.
The I.D. card portion of the insurance market is already lost. Agents obviously still write this business, but the future is dire.
The rest of the market can be saved if knowledge, rather than price, is sold. Computers can bring price faster and more cheaply than humans. The human value is knowledge. Fortunately, a great percentage of the market still cares about buying from a resource that offers personal knowledge.
Unfortunately, I see too many producers literally running away from knowledge. Here is the proof: When I ask producers why they do not use coverage checklists, they regularly tell me they’re afraid the customer will ask about a coverage for which they do not have knowledge! Think about this! They think the consumer values knowledge but refuse to gain the knowledge the consumer wants! Those producers should just find another career.
Think about this a different way. Do you want a doctor who, because he does not understand cardiac medicine, refuses to test or discuss cardiac issues?
Consumers want to buy from a professional who understands their needs and can match their needs to the prices and products available. At the moment, only professional independent agencies can do this. These people and businesses are the market. Do not run away! Embrace this market and gain the knowledge required to meet it.
A key difference between the younger generation and older generations in the industry is that knowledge used to be less important, because company underwriters knew much more, and producers could rely on their knowledge. Company underwriters today, as a rule, do not know coverages nearly as well. Deficiencies create opportunity, and this is a great opportunity because a majority of people never will expend enough effort to gain adequate technical knowledge. Those who do will have a competitive advantage that will endure.
Much to the disbelief of some, Google does not offer all the answers. Consumers cannot competently look up coverages and apply them correctly. Truly understanding coverages and forms requires a full context. This is what a large and important consumer segment and a huge proportion of the B2B segment clearly want from their agent, so why not give them what they want just like so many agents are willing to give I.D. card shoppers what they want?
The alternative is that if knowledge is not advertised and emphasized, the rest of the market will eventually turn into commodity seekers, too. Several new research studies suggest the small commercial market is already turning that direction. The small commercial market is the bread and butter of many agencies. Are you ready to lose those clients, too?
Technical insurance knowledge is a great asset. Sometimes, the people possessing the most are not the greatest salespeople, and sometimes the best salespeople are just not geared to possess considerable insurance knowledge. This is no reason to ignore the opportunity. In fact, ignore the opportunity at your peril because, if you do not provide the client knowledge, someone else eventually will.
Perhaps the best solution is to create a team that combines knowledge with sales skills. Creating a team may result in less commission to the producer but will gain the producer more sales, more than making up the difference.
Knowledge makes a difference. Gain and use knowledge, or let the competition take advantage of your ignorance.
NOTE: None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules and regulations.