Marie Laveau

 

An old country/novelty song is based on Marie Laveau, a noted Voodoo practitioner (she was real). The song was popularized by Bobby Bare. In the song, she is infamous for disappearing men she does not like. When she disliked a man and he disappeared, locals would say, "Another man done gone." In the song, a very handsome man, Handsome Jack, promises to marry Marie if she'll make him a millionaire. Marie makes Jack a millionaire. With the $1,000,000, Jack reneges on his marital promise because Marie is so ugly. Handsome Jack forgets her Voodoo powers and soon disappears. Another man done gone.

This chorus line popped into my head when I saw another agency was sold. Another agency done gone. This agency was an amateur shop, to be nice. The owner did not see himself as an amateur, but he was. Another amateur agent done gone.

To be sure, some truly professional agents have sold but these sales are limited. Amateur agents are selling faster because they have more to fear. They also know buyers are paying high prices for amateur shops. This may be the only time an amateur is so valuable.

At this point, I've probably ruffled more than a few readers' feathers. To be more explicit, my definition of an amateur agent is one who does not truly know their coverages and in some cases where they do, they fail to sell coverages. They sell price. Lots of big shops sell price, and although they gussy the sale up, the sale is still ugly. The sale does not involve really getting to know the client's needs. I was in an agency the other day where the staff persistently insisted the client's only need was a GL policy regardless of the fact the insured had a commercial vehicle exposure, a worker's compensation exposure, an umbrella exposure, and ten other exposures. They were selling what they knew they could sell. The job of an amateur is to do nothing more. The job of a professional is to sell clients the coverages they truly need. A snake oil salesman vs a quality doctor.

Some amateurism is learned, often courtesy of well-meaning E&O instructors. These instructors advise agencies to not advertise they are professional. The opposite of professional is amateur. The choice is binary.

 

Sometimes amateurism is purposeful because people make choices to not learn coverages. I see this all the time. When a person is in business to build policies to protect policyholders but chooses to not learn coverages, then they are an amateur -- a pure and simple conclusion and the only conclusion possible about cognizant ignorance. When I meet a producer with years of experience and ask them to explain business income and they can't, this means they do not sell it well if at all. They have had plenty of time to become educated, but they have chosen ignorance.

A more benevolent situation is when a person simply does not know what they do not know. The best coverage people in the industry do not know it all, but they know what they do not know. For those people willing to aspire to this point and understand the power of it, my firm has built the best education system in the industry.

The reality painted in another agency done gone is that insurance distribution has always had its amateurs and its professionals. Insurance distribution is one of the few industries where amateurs have been able to make such a good living into the 21st Century. One interesting reason for this is that insurance companies have insisted on paying amateurs and professionals the same commission percentages. But now many companies, due to market pressures and the opportunities created by technology, see the possibility to cut amateur agents out of the distribution channel and in some cases, to even take ownership of their expiration lists.

This is reality and even if amateurs cannot articulate it, they feel it. They sell or join aggregators/clusters for protection. Their strategy makes perfect sense if the companies allow amateurs to survive provided they are surrounded by a lot of other amateurs, which seems to be the case. Being able to join with other amateurs probably will buy many of them enough time to reach retirement and sell.

So far this is a depressing article for amateur agents. However, these factors create the perfect storm for fantastic success for professional agents. Just think about these facts:

  1. When buying or aggregating amateurs, just how many assimilation problems exist? The answer: A huge number. 

  2. Education and rising to a professional bar is not on their agenda.

 

A bigger pool of amateurs busy merging and fitting in creates a phenomenal opportunity for professional agents. Consumers' needs are not getting simpler. They need professional advice more than ever. The difference between a professional and an amateur is easier to paint than ever. Run toward the opportunity being a professional presents rather than running away from the E&O exposure that exists for amateurs.

My three-dimensional holistic training for professional agents is the only training that simultaneously provides coverage knowledge, sales and E&O protection.

NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information. 

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Burand & Associates, LLC is an advocate of agencies which constructively manage and improve their contingency contracts by learning how to negotiate and use their contingency contracts more effectively. We maintain that agents can achieve considerably better results without ever taking actions that are detrimental or disadvantageous to the insureds. We have never and would not ever recommend an agent or agency implement a policy or otherwise advocate increasing its contingency income ahead of the insureds' interests.

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