When I started in the insurance business one of the things I focused on relentlessly was having a lower price than the incumbent agent. I also worked very hard to find problems with a prospect’s insurance coverage. What I learned was that competitive pricing was table stakes. You either had it or you weren’t in the game. But, I also learned that what earned the business, more often than not, was doing a better job of covering the prospect’s risks.
I’ve noticed over the last ten to fifteen years that insurance is increasingly sold on price. It has become, not just table stakes, but virtually the whole game. The company whose slogan is in my title leads the pack in marketing this way, and perhaps because of that and their enormous ad spending, the entire personal insurance industry seems solely focused on price.
The problem, at least for the consumer, comes when there is a claim…
During a conversation my wife had with one of the remediation contractors helping us recover from a disastrous loss at our home she said, “At least we have insurance, I don’t know what we’d do if we didn’t”. The contractor answered, “The worst problem I see is people who have insurance, thought they were covered and found out when the bill came that they didn’t have the right insurance.” I tell people all the time, “Don’t buy your insurance on the internet.”
Those people are the ones who saved a quarter hour, and maybe some premium. But they often face disaster with no one to help them. They bought on price and paid no serious attention to coverage.
Even worse, someone sold it to them that way!
When that happened, the agent cared more about getting the sale than getting it right. That is the very definition of, “not professional.”
This is the opportunity, and the only real future, for the professional independent insurance agent. The very near-term future will feature artificial intelligence and internet insurance sales machines with algorithms that can always find the lowest price. In 15 nanoseconds not 15 minutes, no less. But, will they be able to understand a human being’s needs, feelings, values, aspiration, fears, future financial capability, and past experience, in order to get the right insurance program put together?
No. Not now. Not ever. This is the once and future value and opportunity for agents. I’m grateful to have a great agent who asked a lot of questions and took a lot of time to sell me what I needed, years before I needed it.