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From the Editor
"Ask an Expert" Briefs
A Disturbing Explanation for the Proliferation of Uninsured Motorists Losses?
There are two primary ways to create an uninsured motorist: (1) no auto liability coverage, or (2) auto liability coverage that has an exclusion for what happened. According to an Insurance Journal article, UM experience has gotten decidedly worse. Could it be that this is due, at least in significant part, to increasingly stripped-down auto policies being sold on price alone?
Five Important Questions to Ask an Agent About Your Insurance Coverage
A freelance journalist was working on a story about what questions a consumer or business owner should ask when buying insurance. She was seeking five questions each from several insurance “experts.” These were the five questions I suggested that prospects ask whomever they are purchasing insurance from…just in case YOU are asked these questions by someone who read the writer’s final article.
How to Save $233 on Car Insurance and Incur a Loss Exposure of $16,000
Search the internet for “how to reduce your car insurance cost” and you should get about 58 million hits. Hundreds, if not thousands, of articles have been written about how to save money on car insurance. Unfortunately, almost all of them are full of bad advice, one example being dropping your physical damage coverage. This article explains why that’s usually not a good idea.
Keeping Auto Premiums Low by Failing to Disclose Teenage Drivers
As the commodity-pricing frenzy of auto insurance intensifies, you become aware of agents who are cutting premiums by deliberately failing to disclose teenage drivers and advising prospects or insureds that they are still covered and would only have to pay the additional premium if a teen driver has an accident. What do you do?
Providing Coverage Summaries to Insureds
Agencies and insurers often provide policy coverage summaries. Is this a good idea? As is often the case, the agency must balance the sales and service function with their E&O exposure. This article suggests a reasonable way to do this, if warranted, including a sample disclaimer.
The Inevitable Destination of Price-Focused Direct Insurance Sales
Many of the so-called experts claim that agents cannot compete with the direct insurance marketing channel because of, in the case of online quoting and sales, the inherent efficiency of the internet. But at some point this alleged efficiency becomes as efficient as it possibly can be. If your marketing strategy is focused almost entirely on price and “convenience,” what happens next? The logical answer does not bode well for consumers unless agents and regulators address the likely detrimental consequences of unbridled price competition.
What Happens to the Public When Consumers Buy Cheap Auto Policies
Like statutory minimum limits standards, should states consider minimum coverage standards to protect the general public? Isn’t this the primary responsibility of regulators? How are they serving consumers if they approve policy forms that provide very restrictive coverage? As outlined in a previous VU article, the continuing race to the lowest priced auto policy is only going to hurt the innocent.
When Customers Move to Direct Writing Insurers
We’ve all seen the media stories about the demise of independent agents from organizations ranging from Google to Walmart getting into the insurance industry. Likewise, even our own publications refer to start-up “disrupters” like Insurify and Lemonade “revolutionizing” the industry. Is this PR or reality? Are their real downsides to consumers buying insurance from such “aggregators” or online comparative rating sites?
12 Tips for Selling in a Hard Market
Many people in the P&C industry, particularly agency CSR's and a number of producers have not yet had the pleasure of experiencing a hard market. It's been about 15 years since we last had a significant hardening of prices. A hard market presents a number of selling problems. On the other hand, it also presents opportunities. Below are 12 tips that might improve your sales results in the hard (or any) market.
In order to reach a desired premium, an insurer may ask if the agent wants to 'chip in' commission, for example, reducing the commission from 15% to 10% in order to make the premium more competitive. The process is invisible to the insured or prospect. Is this rebating?
According to a recent study, about 67% of apartment dwellers and house renters do not have an HO-4 (renters insurance) policy. What does this mean to you? Given the number of renters in the U.S., this is a vast untapped market. Admittedly, the commissions aren't great, but what better place to start a newly licensed producer or a CSR. In addition, if you explain it convincingly, it could be an opportunity to sell additional coverages even homeowners are reticent to buy, along with commercial lines now or in the future.
How to Increase Commissions by 50%!
The #1 factor that distinguishes high from low producer production is goal setting. This article does not address the specific methodologies of goal-setting, but rather demonstrates how the goal-setting process can be used in a practical application. The figure of '50%' used in this illustration is arbitrary...each producer must establish a sales improvement goal that is realistic and attainable for their unique situation.
How to Make 50 (or more) Sales Calls in a Day
Sounds good, doesn't it? Fifty or more sales calls in a single day? Obviously, making this many (or more) individual sales calls would be pretty difficult. But what if you could get that many prospects in a room at one time? Well, you can. All you have to do is hone your public speaking skills....
Reducing Insurance Costs…Distinguishing Bad Advice from Good Advice
Much has been written about how to reduce insurance premiums. Unfortunately, too much of this advice has been BAD and much of this bad advice comes from consumer web sites and publications that have little understanding of insurance and risk management. The purpose of this article is to identify some of the bad advice being bandied about and to reinforce some of the good advice.
Selling in a Hard Market
The marketplace has been tightening up for the past year or so. Premium increases in the range of 15-50% (or even higher) have been anticipated. Now, with the events of September 11, this seems a bargain and we are beginning to face one of the hardest markets in industry history. As a producer what can you do to prepare your clients for significant rate increases? 2003 Update...a new article download has been added below that examines the changes of the past year and what could happen in the coming year.
Selling on the Internet...How One Agent Does It
Can agents compete with direct writers and others in selling insurance over the internet? According to IIABA member Gary Savelli of Basic West Insurance Agency in San Francisco, the answer is a resounding YES! Because Gary runs a small agency and wants to keep it that way, he has found it necessary to REDUCE the amount of insurance he's selling from his web site. To learn how even the smallest agency can generate $100,000 or more in commission income from a web site, keep on reading....
The Cost to Quote
According to consultant Chris Burand, 'I have found that producers usually drastically underestimate the time required to quote and write an account.' Do you know how long it takes to quote an account? More important, do you know what it COSTS to quote an account in the aggregate? When you look at the numbers, it's easy to understand why the more business you place, the more money you lose....
The Danger of Buying Insurance on the Internet
As if I didn't get enough punishment via our 'Ask an Expert' service :-), at one time I served as one of the insurance 'experts' at www.allexperts.com. During that brief stint, I had a question submitted from someone who purchased his auto insurance through a web site, without the aid or counsel of an agent. Here's his story....
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