Property-casualty insurers don't want the open competition that life insurers have–they want to have it both ways.

Agents have been forced to change for survival far faster than insurers did. Insurers have taken care of their own back office operations in generally very wasteful, ineffective proprietary system designs, while dumping as much of their work back onto their agents as possible and cutting agent compensation.

Ironically, these same management geniuses who have found ways to sell off or ruin 100-year-old companies have not been able to figure out the rather obvious benefits of working with more small, dedicated, loyal agents who produce profits, as opposed to promoting a trend toward ever bigger agencies that are less profitable for the insurer, and who are better equipped to move a book of business if desired.

The 10 greatest ironies are:

Insurers don't seem to be able to tell who the bad agents are until after it's too late.

Insurers don't respect the small agent who tries to make the best of a difficult situation and delivers profits.

Insurers know it all, so they don't feel a need to ask a small agent: How do you do it?

Corporate culture supports big spending on consultants, actuaries, lawyers and ad agencies–none of which sell policies or create profits–but they look at agent commissions as an expense item to be cut without any repercussions.

Insurers know how important the claim contact is, and coming to the correct settlement. But they've done little to improve the process for everyone involved, which would lower improper expectations and reduce the number of upset claimants, while cutting paperwork, litigation and fraud, all the while improving the bond of loyalty and satisfaction that the agent relies upon to assure continued renewals.

Insurers want agents to act like employees, but not be employees.

Insurers believe that they pay agents commissions, rather than understanding that the policyholders are the ones paying everyone.

Insurers expect agents to grow, merge or sell out, but not complain about a 25 percent income reduction. Most of their companies would be out of business if faced with the same reduction. They are the ones making all of the rules, the rates and deciding on the payouts, and they still insist on using agents and agent commissions as a scapegoat for their incompetence.

Insurers fail to see how their many small actions have damaged the market over time, and how their complete lack of leadership has created political monsters that they then decide to run away from rather than slay.

Working together, we can do whatever is needed, but if it was that simple, the world would be at peace.

Keep up the good work.

Anthony N. Verreos
President
Verreos Insurance Agency
Brisbane, Calif.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 15, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.