Two Ways To View Insurance

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Tom And Harrys Excellent Adventure

Inside the bustling confines of Café Caffeine, amidst the clinking of cups and the murmur of conversation, sat two friends and insurance agents, Tom and Harry, engaged in a spirited debate. Tom was a stickler for slashing prices, while Harry prided himself on selling the value, not just the steak.

Tom: “Harry, you’ve got to admit, nothing makes the phone ring like screaming, ‘Discounts! Get your discounts here!’ It’s like opening the floodgates.”

Harry, with a mischievous grin: “Oh, Tom, that’s one way to do it. If you’re running a supermarket sweep. Me? I prefer to think of insurance as fine dining, a vule. Why sell fast food when you can offer a gourmet experience?”

Tom: “Gourmet? It’s insurance, Harry, not a Michelin-star restaurant. People want savings, not caviar with their coverage.”

Harry: “Ah, but that’s where you’re missing the true value or flavor, my friend. When I sell a policy, I’m not just offering protection; I’m selling peace of mind and 24/7 concierge. It’s like insurance à la carte. Sure, you might lure them in with discounts, but I keep them coming back with the full-service experience.”

Tom: “Concierge, huh? What do you do, tuck them in at night and read them their policy until they fall asleep?”

Harry, laughing: “Only on request. But think about it. When someone’s life goes sideways, they don’t remember the 10% they saved. They remember the voice on the line or the personal visit, helping them patch their world back together. That’s value, my friend.”

Tom, chuckling: “I suppose next you’ll offer to insure their heartbreak too?”

Harry: “Now there’s an idea! ‘Broken hearts mended here. Terms and conditions apply.’ I’d buy that.”

Tom: “Alright, Harry, you’ve made your point. Value has its… well, value. But if you start offering heartbreak insurance, sign me up. I might finally get over my high school crush.”

Harry: “Deal. But it comes with a premium. After all, the true value is priceless.”

As they shared a laugh, it was clear that while their methods might diverge, their hearts and their humor were in the right place. In the world of insurance, whether you’re selling on price or on value, the real win is in making sure your clients feel protected, appreciated, and, yes, even a little bit entertained.

AI Is Here To Stay, But Will It Kill Customer Service?

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Integrating Artificial Intelligence (AI) into various sectors has been a revolutionary step towards automation and efficiency. The insurance industry, known for its reliance on personal relationships and human judgment, is no exception. As AI continues to evolve, there’s growing concern about its potential to disrupt traditional customer service roles, particularly those of insurance agents. This blog explores how AI may transform or even potentially “destroy” the role of insurance agents in customer services, while also considering the broader implications for the industry.

  1. Automation of Routine Tasks

AI and machine learning algorithms are increasingly capable of handling routine tasks such as answering basic customer queries, processing claims, and even underwriting policies. Chatbots and virtual assistants can provide 24/7 service, answering FAQs and guiding customers through the insurance process without human intervention. While this improves efficiency and reduces costs, it also diminishes the need for human agents for these tasks, potentially leading to job displacement.

  1. Personalized Customer Experiences

AI can analyze vast amounts of data to offer personalized insurance products and services. By understanding a customer’s unique needs and risk profile, AI systems can tailor recommendations much more accurately than a human agent might. While this bespoke service is advantageous for the customer, it challenges the traditional role of insurance agents as the primary source of personalized advice.

  1. Enhanced Risk Assessment and Pricing

AI’s ability to process and analyze large datasets enables more accurate risk assessment and pricing of insurance policies by insurers. This precision in understanding risk profiles and predicting outcomes can streamline the underwriting process, reducing the reliance on agents to assess and negotiate terms. As AI systems become more sophisticated, the nuanced judgment of experienced agents may become less critical, potentially undermining their role in the industry. However, this can reduce a personal human judgment on underwriting and eventually increase prices.

  1. The Diminishing Human Touch

One of the most significant impacts of AI on insurance agents’ customer service roles is the potential loss of the human touch. Insurance is a business built on trust and relationships, especially when it comes to claims, which often occur during stressful times for the customer. While AI can offer efficiency and personalization, it lacks the empathy and understanding a human agent can provide. This shift could lead to a more transactional relationship between insurers and their customers, potentially eroding customer loyalty and satisfaction. This would be a disaster.

 

The impact of AI on insurance agents’ roles in customer service is multifaceted. While there are real concerns about job displacement and the loss of the human element in customer relationships, there’s also the potential for significant industry evolution. By automating routine tasks and leveraging data for personalization and efficiency, AI can free up human agents to focus on providing more value-added services. This transformation, however, requires a strategic approach to reskilling and redefining the role of the insurance agent in the age of AI. As the industry navigates these changes, the balance between technology and human touch will be crucial in maintaining trust and satisfaction among customers.

Auto Insurance Troubles in 2024

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In December 2023, the United States witnessed a remarkable surge in motor vehicle insurance premiums, marking the most substantial increase since the mid-1970s. According to government data, these premiums escalated by a notable 20.3% compared to the same period in the previous year. This rise in insurance costs has emerged as a significant element in the broader inflationary trend, contributing to a 3.4% year-over-year increase in the Consumer Price Index (CPI) for December, as reported by the Labor Department.

The increase exceeded the projections of economists polled by Reuters, who had anticipated a 3.2% rise, and surpassed November’s 3.1% increase. While high shelter costs continue to play a major role in overall inflation, the unprecedented hike in car insurance rates stands out as a key driver. This surge in insurance premiums has been consistent throughout the year, with a 1.5% monthly increase in the last month alone, paralleling the average monthly rise over the past year.

Tom Simons, a U.S. economist at Jefferies, points out the uniqueness of the motor vehicle insurance (MVI) component in the CPI. He notes the lack of immediate signs of relief from these high rates. Several factors contribute to this trend, including increased costs for labor and vehicle parts, higher vehicle prices, declining demand from reinsurers, and risks associated with natural disasters.

Auto insurance, typically subject to state-level regulation and exhibiting significant regional cost variations, has rarely been a dominant factor in overall inflation. However, in the final quarter of 2023, it accounted for 15% of the headline price increases, marking a significant shift.

The White House has responded to this situation, with National Economic Council Director Lael Brainard emphasizing the need for independent agencies to focus on combating unfair and deceptive pricing practices. This response indicates a potential increase in regulatory scrutiny in the insurance sector.

While the impact of rising insurance costs on the overall inflation trajectory and the Federal Reserve’s monetary policy remains uncertain, Simons suggests that it might not be substantial enough to influence monetary policy decisions significantly. However, he also admits the difficulty in forecasting the future trend of these insurance costs.

The dramatic rise in motor vehicle insurance premiums in the U.S. has become an unexpected and influential factor in the nation’s economic scenario, particularly in the context of inflation. This development presents new challenges for both policymakers and economic analysts.

How AI Might Turn the Insurance Agent-Customer Connection into a Dark Comedy

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In the swirling chaos of artificial intelligence (AI) infiltrating the insurance industry, there’s a subplot emerging. As AI takes its place on the stage, promising efficiency and innovation, there’s a risk that the once-harmonious relationship between insurance agents, insurance companies, and customers may be in for a twist and not necessarily the good kind.

We have always thought and promoted the idea that insurance is about relationships, building trust and educating clients on their risk. But changes are coming and we believe it is important to protect this trusted relationship, now more than ever, However, We thought it might be fun to see where AI might take us in the near future.  Enjoy the ride.

If AI Became Movie Titles

Lost in Translation

Picture this: a customer asks an AI-driven chatbot about coverage for three rental properties in three different states, and suddenly, they find themselves tangled in a web of algorithmic confusion. It’s like trying to teach your grandma how to use Snapchat – confusing, frustrating, and a little bit hilarious. Who knew insurance policies could be the punchline of a cosmic joke? An experienced agent can guide you through the process of making sure you get the coverage that is right for you.

The AI Apocalypse

While AI is making strides in understanding emotions, it still struggles with the subtleties of human feelings. It’s a bit like watching a robot attempt stand-up comedy – you appreciate the effort, but the delivery might be a tad mechanical. Customers facing tough situations may find themselves yearning for the soothing, empathetic tones of a real-life insurance advisor, not the calculated responses of a digital comedian. When you call a local agent you get a real person who lives and works in your community.

The Insurer Bot Uprising

Imagine being dumped by an insurance algorithm because you’re deemed too “risky” – it’s like being ghosted by a machine. The cold, algorithmic decisions might leave customers feeling like they’re stuck in a bad breakup movie. Agents can help you when there are issues involving, payments, claims or general service issues. 

Privacy Predicament

If George Orwell were writing about insurance in the age of AI, he might call it “1984.0: Big Data’s Revenge.” The fear of constant surveillance by algorithms could turn the insurance game into a paranoid comedy thriller. Cue the dramatic music as customers wonder, “Who’s watching me now?”. Insurance relationships should be built on trust.

The Liability Labyrinth

Who’s responsible when the AI-driven insurance messes up? It’s the insurance industry’s very own mystery thriller – “Whodunit: The Case of the Rogue Algorithm.” Picture insurance agents donning detective hats and customers playing the role of amateur sleuths. Spoiler alert: the butler did it, or was it the algorithm? Insurance agents are the first line of defense, we are on your side.

In this dark comedy, the insurance industry is navigating uncharted territory. While AI brings its own set of challenges, it also adds a touch of absurdity to the insurance game. As agents and customers waltz through this AI-driven circus, one thing is for sure – the insurance industry is gearing up for a blockbuster, and it’s leaving us all wondering if we’re starring in a comedy, a drama, or a tragicomedy of errors. Striking the right balance between technological innovation and the human touch is crucial to ensuring that the insurance industry’s evolution doesn’t come at the cost of a deteriorating relationship with its customers.

We hope you enjoyed the ride.

 

 

 

 

Navigating Insurance, A Year In Review 2023

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The insurance industry saw significant changes in 2023 due to technological advancements, regulatory shifts, and economic uncertainties. Let’s examine the major concerns for individuals and businesses within this evolving insurance landscape, emphasizing the need for strategic planning and informed decision-making.

Top Insurance Issues In 2023

Cybersecurity Threats: With the digital age intensifying, families and businesses face increased risks of cyber-attacks and identity theft. Comprehensive insurance policies covering identity theft, data breaches, and ransomware attacks are in high demand.

Supply Chain Disruptions: Ongoing global supply chain issues necessitate insurance solutions to mitigate risks related to operational delays and disruptions.

Rate Increases: The insurance industry is witnessing substantial rate increases across various policy types, challenging individuals, and businesses to find a balance between comprehensive coverage and budget constraints.

Inflation Impact: Inflation affects both insurance premium costs and coverage adequacy. The cost of medical expenses, car repairs, and construction costs has impacted insurers profitability. Everyone is concerned about maintaining sufficient protection as claim costs and operational expenses rise.

Regulatory Changes: Adapting to regulatory changes in different jurisdictions is crucial. Businesses seek insurance that protects against potential legal and regulatory liabilities. Families need to be educated on how building codes may impact rebuilding after a loss.

Insurers Limiting Coverage: Insurers are becoming more selective, often limiting coverage in many areas. This trend prompts everyone to reevaluate their risk management strategies and seek alternative insurance and even none insurance solutions.

Employee Health and Safety: The focus on employee health, including mental well-being, remains a priority. Companies are looking for insurance options that provide extensive coverage for employee health issues.

Actions for 2024

As we prepare for 2024, it’s crucial to take proactive steps in managing personal and business insurance needs:

Reviewing Coverage: Regularly review your insurance policies to ensure they align with your current risk profile and needs. Adjustments may be necessary to address new risks or changes in your business operations.

Assessing Limits: Evaluate the limits of your current insurance coverage. With the impact of inflation and changing risk landscapes, it might be necessary to increase these limits to ensure adequate protection.

Working with Your Insurance Agent: Collaborate closely with your insurance agent or broker. Their expertise can provide valuable insights into market trends, new insurance products, and strategies to optimize your coverage in light of emerging risks and industry changes.

Exploring Alternative Solutions: In response to insurers limiting coverage, consider exploring alternative risk transfer solutions, increasing deductibles, and even reviewing coverage to determine if you need especially coverage.

Emphasizing Risk Management: Enhance your internal risk management practices. Effective risk management can not only reduce your insurance costs but also improve your organization’s overall resilience.

Staying Informed: Keep abreast of industry trends, regulatory changes, and economic factors that could impact your insurance needs. Staying informed enables you to anticipate changes and adapt your insurance strategy accordingly.

Navigating the insurance landscape in 2024 and beyond requires a multifaceted approach for us all. By proactively reviewing coverage, assessing limits, working closely with insurance professionals, and staying informed, individuals and businesses can effectively manage their insurance needs in the face of evolving challenges and opportunities. Preparing for 2024 involves not just adapting to current trends but also anticipating future developments in the insurance sector.

Auto Insurance Troubles in 2024

/in ,

In December 2023, the United States witnessed a remarkable surge in motor vehicle insurance premiums, marking the most substantial increase since the mid-1970s. According to government data, these premiums escalated by a notable 20.3% compared to the same period in the previous year. This rise in insurance costs has emerged as a significant element in the broader inflationary trend, contributing to a 3.4% year-over-year increase in the Consumer Price Index (CPI) for December, as reported by the Labor Department.

The increase exceeded the projections of economists polled by Reuters, who had anticipated a 3.2% rise, and surpassed November’s 3.1% increase. While high shelter costs continue to play a major role in overall inflation, the unprecedented hike in car insurance rates stands out as a key driver. This surge in insurance premiums has been consistent throughout the year, with a 1.5% monthly increase in the last month alone, paralleling the average monthly rise over the past year.

Tom Simons, a U.S. economist at Jefferies, points out the uniqueness of the motor vehicle insurance (MVI) component in the CPI. He notes the lack of immediate signs of relief from these high rates. Several factors contribute to this trend, including increased costs for labor and vehicle parts, higher vehicle prices, declining demand from reinsurers, and risks associated with natural disasters.

Auto insurance, typically subject to state-level regulation and exhibiting significant regional cost variations, has rarely been a dominant factor in overall inflation. However, in the final quarter of 2023, it accounted for 15% of the headline price increases, marking a significant shift.

The White House has responded to this situation, with National Economic Council Director Lael Brainard emphasizing the need for independent agencies to focus on combating unfair and deceptive pricing practices. This response indicates a potential increase in regulatory scrutiny in the insurance sector.

While the impact of rising insurance costs on the overall inflation trajectory and the Federal Reserve’s monetary policy remains uncertain, Simons suggests that it might not be substantial enough to influence monetary policy decisions significantly. However, he also admits the difficulty in forecasting the future trend of these insurance costs.

The dramatic rise in motor vehicle insurance premiums in the U.S. has become an unexpected and influential factor in the nation’s economic scenario, particularly in the context of inflation. This development presents new challenges for both policymakers and economic analysts.

Three Key Action To Improve Your Personal Insurance In 2024

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In 2024, as in any year, managing your home and auto insurance effectively is crucial for financial security and peace of mind. Here are three key actions individuals should take to ensure they are optimally covered:

  1. Regularly Review and Update Policies

Why It’s Important:

Adapting to Changes: Life circumstances change—like buying a new car, renovating a home, or even changes in local laws—that can affect insurance needs.

Cost-Efficiency: Regular reviews can help you find better rates or discounts you might now qualify for and consider cost-shifting of dollars within your current insurance program to develop a stronger risk response if your budget for coverage is already reached its maximum.  Please only do so with the guidance of your agent so that all changes are fully understood, and risk assumptions are managed.

How to Do It:

Annual Check-ups: Set a yearly reminder to review your policies.

Consult with Professionals: Seek advice from insurance agents to understand changes in the market and how they impact your coverage.

  1. Increase Your Understanding of Insurance Terms and Coverage

Why It’s Important:

Avoiding Underinsurance: Lack of understanding can lead to inadequate coverage, leaving you vulnerable in the event of an accident or home damage.

Making Informed Decisions: Knowing what you’re buying helps in choosing the right coverage for your needs.

How to Do It:

Educational Resources: Utilize resources provided by insurance companies, or independent educational websites.

Ask Questions: Don’t hesitate to ask your insurance provider to clarify terms or coverage details.

  1. Explore Discounts and Bundling Options

Why It’s Important:

Cost Savings: Many insurers offer discounts for things like multiple policies, safe driving, or home security upgrades.

Convenience: Bundling home and auto insurance can simplify your financial management and often leads to discounts.

How to Do It:

Research: Have your agent look into various insurers to see what discounts they offer.

Negotiate: Don’t be afraid to negotiate with your current provider for better rates, especially if you have a good history with them.

Managing your home and auto insurance is an ongoing process. By staying informed, reviewing your policies regularly, and exploring all available options, you can ensure that you have adequate coverage without overspending. Remember, the best insurance policy is one that is tailored to your specific needs and circumstances.

The Problems Many Businesses Have With Their Agents

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I talk to people regularly who tell me that they are not happy with their agent.  I hear statements like, “My agent does not understand my business”, “My insurance program is not matched to my business”, or “My agent always tries to sell me more insurance.”  These are common issues in the business community. I have found that the key issue with most of these concerns has less to do with the agent, and more to do with how the customer goes about selecting the agent.  What?–How can that be true?

Most agents are just trying to sell insurance and move on to the next account.  They are not bad people, but they have been trained to sell.  Our agents are different; first and foremost, we are trained to serve.

Too often customers go about selecting their agent through bidding out their insurance and then selecting the lowest bidder.

Here is a great quote form the movie Armageddon, when the team of oil drillers are sitting in the space shuttle ready to lift off, and having second thoughts.  “You realize we’re sitting on 45,000 pounds of fuel, one nuclear warhead and a thing that has 270,000 moving parts built by the lowest bidder?  Makes you feel good doesn’t it?” Rockhound played by Owen Wilson.

My contention is that the process by which clients select their agent is flawed, and there is a better way.  By only looking at the lowest price, you are missing the most important part of the process; getting the best possible combination, of coverage, risk management, customer service, and price designed for your specific business.

If buyers were to select agents on something other than price, they would be much happier.  Here is what to look for in an agent:

  • A good agent will have access to many markets, making price consistent between most agents.
  • Staff experience.
  • Special training and credentials.
  • Have conversations with prospective agents. Simply asking questions does not mean you have to work with them.  This is a chance for you to get a feel for how they work and if you feel comfortable with them.
  • A good agent needs a high emotional IQ. This includes the ability to listen and empathize with clients on a deeper level in order to discern what they really want and need.

 

Now go win the day!

Can You Improve Your Customer Service?

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As we move to the end of 2023, it would be good to identify ways agents and other businesses might improve their customer service. No matter how good they are at treating their clients like kings, any company may use these pointers to keep getting better:

Allow your team some leeway: Customers detest being kept on wait or instructed to “check with my supervisor” when they are seeking a resolution to a possible complaint or issue. Give your delegates a toolkit of instant use so they can handle situations without having to escalate to a higher level.

Personalize, customizing any response to your consumers is one of the easiest (and least expensive) methods to truly make them feel valued. This could be as easy as changing your email platform or e-blasts to include the customer’s name (if that information is available). It could also entail including a component in your phone bank training that encourages customer service representatives to ask for and repeat the customer’s name throughout the conversation, as well as to thank them by name at the end.

Make the most of technology: Automation services and business technology are always evolving and getting better. But one area where companies might be falling short is in the integration of technology. How many times have you tried to fix a problem while on hold only to be informed, “I can’t see other parts of your account,” or “I don’t have access to that information”? Look at ways to combine team member access to all technological platforms and data to expedite response times and improve customer service efficiency. This will help you prevent needless delays.

Acknowledge excellent service: While improving external, customer-facing service is crucial, it’s also necessary to practice internal customer service and give credit to team members that go above and beyond. Use this opportunity to establish an internal recognition program for staff members who have been recognized for providing exceptional external service, if you don’t already have one in place. Simple actions like a public thank you, internal email, or intranet posting can make a big difference. Specific recognitions like extra paid time off, gift cards, or other company benefits can also be very beneficial. For those who dedicate their days to serving external audiences, an internal “thank you” from the boss is greatly appreciated!

Always ask for feedback: Always ask your customers “How are we doing?” even if you don’t always like their responses. – An email customer service survey or a straightforward feedback form at the conclusion of an online chat might offer insightful information about what is and isn’t functioning properly in your system. Customer feedback also conveys to your clients your sincere concern for their experience and gives them a sense of involvement in the process.

Find additional channels by which your clients can contact you: For many years, the most popular methods of reaching out to and communicating with customers were call centers and email addresses. Technology is always changing, as is the way people use it to communicate. Speak with your customer care representatives to find out if customers are asking for other methods of resolving problems; furthermore, take a peek at what your rivals are doing. Is it possible to add a new channel to your website, such a chat feature? What about a WhatsApp or messaging feature? Passive outreach tactics such as these could prove to be more effective than phone calls, particularly when working with clients that are spread across different geographies and time zones.

 

What Is Your Insurance Agent Doing For You?

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Engaging in any business requires the support of professionals who can guide you through the complexities and challenges of your industry. One such professional is an agent. They play a critical role in ensuring your success. However, not all agents are created equal. It’s important to know what your agent should be doing for you to ensure that they are providing the best service possible.

Educating You

Knowledge is power, especially in business. Your agent should be a source of knowledge and education for you. They should be able to explain the different aspects of your business, the market, and the industry as a whole. It’s their responsibility to ensure that you are well informed and understand the details of your business. This not only helps you make informed decisions but also increases your confidence in your business operations.

Connecting with You

Communication is key in any relationship, and the one between you and your agent is no different. Your agent should be proactive in reaching out to you, keeping you updated, and being responsive to your inquiries. They should be available to answer any questions, concerns, or ideas you may have. The more connected you are with your agent, the better they can serve your needs.

Reviewing Your Risk

Every business comes with its own set of risks, and it’s your agent’s job to help you understand and manage them. They should be able to review your business operations and identify potential risks that could affect your business. They should also offer solutions or strategies to mitigate these risks. By doing so, they can help protect your business and ensure its longevity.

Looking for the Right Combination of Coverage and Price

One of the critical roles of an agent is to help you find the right insurance coverage for your business at the best price. They should be able to navigate the complex insurance market and find a policy that fits your needs and budget. It’s their duty to ensure that your business is adequately protected without overpaying for coverage.

Responding to Questions

Your agent should always be ready and willing to answer your questions. No question is too small or too big for them to handle. Whether you’re asking about policy details, claims, or changes in the market, your agent should provide clear, accurate, and timely answers. This not only helps you understand your business better but also builds trust between you and your agent.

Providing Great Customer Service

Last but not least, your agent should provide exceptional customer service. They should be friendly, approachable, and professional. They should also be proactive in addressing your needs and resolving any issues that may arise. Great customer service not only makes your business interactions more pleasant but also fosters a strong, long-lasting relationship between you and your agent.

An agent plays a crucial role in the success of your business. They should be educating you, connecting with you, reviewing your risk, looking for the right combination of coverage and price, responding to questions, and providing excellent customer service. They should be a partner in your success and not just a service provider. So, make sure to choose your agent carefully and hold them to these standards.