I had the in classroom CE insurance class today. I have my Life, Health, and limited lines licenses in the State of Kentucky. These are required by the state and my company to sell credit insurance and mortgage insurance. Every 2 years you have to complete 24 hours of continuing education classes to keep yourself in the good graces of the state. My 2 classes today were on Errors and Omissions and Ethics. Neither class has a lot to do with the insurances I sell or even offer. The instructor was very good and tried very hard to keep everyone interested but 12 hours (6 each course) is just way to long to do this.
The Errors and Omission class reinforced my general belief that insurance is just legalized gambling. The Insurance Companies saw that when they denied coverage under a policy because the agent made a mistake, error, or left out something, omission, the customer or their family could sue both the agent and the insurance company. The insurance companies then came up with a new product to sell to their own agents, E and O coverage, like they were selling to doctors. They are betting on 2 things not to happen while mitigating the risk to the company having to pay out claims. The first bet is that a good agent will not make a mistake in handling a policy that is sold. The second bet is that they can litigate any claim into a settlement for less money than just paying out a large claim. And that in a nut shell is what insurance is. They take all their information and bet bad things are not going to happen while taking your bet that they will. If they think bad things are going to happen then they charge you more to take your bet. Legalized gambling in all its forms can not stand up to the money insurance companies take in betting that nothing will happen.
The ethics class was much more fun but last about 2 hours to long. The instructor led us into a discussion on the difference between legal and ethical instead of the normal follow your company's SOP and legal department's rules speech that comes with most business ethics courses. I enjoyed his discussion about the least respected or trusted occupations in the United States. The least trusted job is the used car sells man. The next is an insurance agent. The idea that both are seen in a bad light because they are seen as liars and crooks. Both trying to sell you something that you know you need but not sure if you are getting a good deal or not. The survey he had read from also had a weird follow up question about insurance agents. People do not trust insurance agents in general but they do trust their insurance agent. I thought about Congress at this point, with the idea that no one likes what Congress as a whole is doing at any time but they like their Congressman. People do not like being sold something but if they have a relationship with you then they will listen to your suggestions about what to do with their lives. He wanted to use this as a reason to get to know your customers so that you can better serve them as well as sell them more insurance.
A follow up to this discussion was about why do people not trust insurance sells people as well as sells people in general. The discussion turned to the idea of commission sales and the mistrust people have when they are faced with a hard sell based on commissions. Most people assume that commission sales will push the sales person to sell the product that gets them the most commission not the best product for the client. I think the idea of making all agents in the insurance business operate under the same regulations across the country and place them on a fixed salary and bonus program like most employees and get rid of commissions. This would help with the public image and also allow them to sell insurance to the needs of the people as they should anyway but do not. Why does insurance have a commission sales payment structure anyway? Its so that insurance companies can limited their employment costs by have sales people who are not W2 employees but contractors who only get paid when they generate more revenues for the companies.
I know this was a different blog tonight but I needed to unwind after 12 hours of this dribble today.
I often tell my very young employees that you only are practicing at the top of your ethical game when the people around you are practicing at the top of theirs. If you aren't surrounded by people who want to do business the right way, you aren't in the right place. Did you talk at all about doing things right for the right reasons or just about what could happen if you do things wrong and get caught. It's a different standard.
ReplyDeleteJim, I would add to that "distrust" list most everyone who makes their living on commissions. I think my financial advisor is the greatest but there is always that nagging wonder if this move or that move is the best thing. Maybe this is the reason that lots of "big box" stores, ie. Home Depot get positive marks...no commission so that reduces the fear that you are being sold flooring/sinks/etc. etc. that are expensive but maybe not the best for your use. Commissions and tipping...both should go away but can't be done in our culture/economy.
ReplyDeleteStressing over E&O Insurance prices?
ReplyDeleteE&O Insurance for Life Agents - $495 - http://www.EOforLess.com - Now with monthly payment Option - Click, Bind, & Print On-Line .
Ellen, the class discussion did include a great deal of talk about doing the right thing because it was the right thing and not just to cover your butt. Vivian I agree comission sales and tipping both need to be addressed as forms of compensation. Working in hotels with tipped employees not making it in slow times and sales people taking home more than operations managers did not lead to a good working enviroment.
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