Rates, Premium, Underwriting, Claims, Discounts, Customer Loss Experience are all just a few of the terms in the Industry of Insurance that we hear on a daily basis.
What is something that I hear quite often, “My carrier keeps increasing rates and impacting my competitive position in the marketplace.”
IS THIS TRUE? AND IS IT YOUR CARRIERS DRIVING UP THE PRICES?….OR DO YOU HAVE SOME IMPACT AND CONTROL?
I don’t care which carrier/s that you represent, I know with 100% certainty that they all want one thing: TO COLLECT THE CORRECT PREMIUM FOR THE RISK, NOTHING LESS NOTHING MORE! No carrier wants to be uncompetitive YET they want to be profitable and that measure comes from collecting the right premium for the right risk.
What I don’t understand is those Insurance Professionals that manipulate the rates by giving clients discounts they are not eligible for, falsifying client information, omitting crucial information or adding unsubstantiated info. to improve the rates. Insurance Professionals including myself at times, like to complain about the rates of our Products and/or Carriers BUT we don’t (as a whole) admit when we have manipulated rates to write business.
When Insurance Professionals manipulate “THE RIGHT PREMIUM FOR THE RISK” they are in essence biting the hand that feeds them. They are causing their Carrier to be forced to adjust premiums to justify those clients who by the Insurance Agencies manipulation received the “THE WRONG (LOWER) PREMIUM FOR THE RISK” On the surface it may not seem like a big deal but think about it this way.
200 Insurance Agencies offer 10 clients each discounts they are not eligible for and manipulate, omit, falsify, lie, cheat or whatever you want to call it. So 2,000 clients received premiums lower than they should have each on average $87 less per month, $1,000 per year. No big deal…you only did it for 10 clients, right? Think in big picture 2,000 clients x $1,000 savings (unqualified for)=$2,000,000 in LOST PREMIUM FOR YOUR CARRIER! BITE THE HAND THAT FEEDS YOU AND THAT $2 MILLION HAS TO COME FROM SOMEWHERE….AND WHERE WOULD YOU ASK….FUTURE RATES!!!
THOUGHTS TO PONDER TODAY: Before you are quick to blame your Carrier/s for the rates, are you doing what you should be doing ethically, honestly to collect the RIGHT premium? Do you have patterns that have been in place for years and you BLAME your Carrier for the rates that you, yourself manipulate? Or do you know peers in your Industry who manipulate discounts, rates, information and thus are negatively impacting your Carrier, your future rates AND OUR INDUSTRY AS A WHOLE. Your integrity, ethics and truth has an impact and your LACK OF THEM has an impact on everyone. Before you blame your Company and/or Carrier, I challenge you to ask: Am I biting the hand that feeds me because I am manipulating the rates and hurting my Company/Carrier and Industry?
John Lucero, is a successful business owner with over 20 years of experience in multi-line insurance agency operations for several major National Brands. With an expertise in Recruiting, Educating, Coaching, Developing and Product Knowledge, his passion and drive to ELEVATE Insurance Agencies to higher levels of success is what keeps him inspired about the future and motivated about making a difference.
