"...it's such a drag when you're livin' in the past" -- Tom Petty
I was conducting an E&O audit and as is common, the owners, staff, producers all lamented the loss of the good old days when company partnerships existed and agents could trust their clients. I am not sure when those days existed. When I was younger, I thought those were the days before my time. Now my experience covers most insurance veteran's "old days." Maybe the frequency of insurance company issues and clients' actions were less, but I don't remember it that way. I'd like to remember it that way but the reality I remember is not that different. Some of the most outrageous E&O claims in my personal E&O claim example file date back 25-35 years.
Lawyers have been filing egregious, outlandish, and frivolous suits ever since the second attorney passed the bar. The "good ol' days" are a trick of the human mind. The "good ol' days" are "good ol' days" because they are in the good historic distance making them safe, safe, and more safe. The future is scary, not the past.
But "Livin' in the Past" is far more dangerous than living in the future. Moreover, proactive risk management techniques can negate or at least minimize a generous portion of future risk on most points. I am really not sure what there is to fear of the future if good risk management is part of the toolbox and the tools are used.
I get pushback everywhere I travel regarding the future being as bright as I paint it, so I know agents' fears are real. I believe the desire for the good ol’ days and the fear of suits may be a mask for the fear of not being able to meet the higher standards of care clients and carriers are requiring of agents. No question exists that expectations are rising. In some ways, agents will have to work harder and definitely differently. For example, commission for basically doing nothing on renewal will likely end. This is the extremely common practice of "renew as is unless the rate increases by X%."
(As an FYI, more than one agent has expressed anger with me for publicly "outing" them for doing nothing on renewals. I am not sure why they, or anyone, would think their practice is a secret and that being paid on renewals for doing absolutely nothing is money for nothing.)
I am not exactly sure how the end of commissions for this poor practice will occur or exactly when. It could be competition. It could be greedy carriers. It could be consumer expectations. My guess is the catalyst will be some combination of these three forces fueled by technology that will exterminate it.
Many agents know they do not know coverages. They know they do not really work renewals. They know they do not know how, after so many years, to learn coverages and work renewals. The lifestyle change would just be too challenging. They are scared and are wishing for the good ol' days. Instead of being proactive and at least learning coverages, they seem intent on trying to maintain status quo until retirement. There is nothing to be afraid of relative to learning coverages but I get how this affects their lifestyle. Changes to lifestyle is the real fear, not learning coverages in and of themselves.
I hate to be coarse with analogies but I'm not sure a fine analogy works. This is the same attitude royals of all ages have had when changes faced them. They were living well doing nothing while their serfs and subjects toiled in misery. Nothing was wrong then, or now, with working.
Similarly, in most every historic scenario, those not working but living richly were willing to fight hard to maintain the status quo because they had forgotten how to work. I'm not writing about self-made people but those who inherited lands and people. I get the fear but fighting for the status quo is an example of where energy is better spent learning coverages, learning to work renewals, and providing true value for your earnings and reaping the benefits, including the clients of your competitors that are deadly intent on fighting for the past or at least trying to hang on until retirement.
Livin' in the past is no way to live if you want to thrive in the future.
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.