Is The Hand Writing On The Wall?

This weeks post reminds me of one of my favorite Bible stories.  It comes out of the book of Daniel in chapter five.  It involves the old saying the "handwriting on the wall."

For those not familiar with the passage, King Belshazzar was a prideful and self-exalted King who knowingly went against the wishes of God.  During one of his lavish parties that he often threw a hand appeared out of no where and begin to write an inscription on the wall.  To make a long story short, Daniel one of the King's servants interpreted the writing to say that the days of the king's reign were numbered.  He had been weighed in the balances and been found wanting.  His kingdom would be divided.  

I find this story relevant because there seems to be a lot of writing out there that we, as independent agents, have been warned and that our days are numbered.

For example, I read an article today titled "Is Personal Lines Auto Worth Fighting For?"  It was written in response to another article that surfaced recently about a study done by the investment bank Nomura proclaiming the demise of the independent insurance agency (the handwriting on the wall). I highly recommend that you read both articles and have included links to each.  I only ask that you start with the Nomura study to read all of their data as to why our way of life is doomed.

I don't want to rehash each of the articles but I do want to point out that both elude to personal auto being a commodity. Which is very unfortunate, and only somewhat true.  For two reasons:

1. For years we have sold it as a commodity never explaining the differences in coverages or upselling subtle nuances but rather cutting as much as legally possible and reducing it to its lowest obtainable price.  We've been treating all personal auto insurance as non-standard auto insurance.
2. The Nomura study goes even further to state that "as company underwriting models evolve and become more intelligent, the need for front line underwriting or talented and trained agents diminishes."  So just like fast food you can pull up to a drive thru and pick and choose what coverage you need off of a menu.  That doesn't work for most people.

When you go on vacation are you willing to spend a few more dollars at a hotel with far superior service?  You could just pick the cheapest room available, besides a bed is just a bed isn't it? 

On your anniversary would your rather have Ruth's Chris Steakhouse or Taco Bell? 

When you have a devastating and unforeseen accident would you rather have a person on the end of the phone several states away explaining you only bought the state minimum requirements or would you rather have a trained and capable agent sitting beside you who spent the time to explain all of your exposures to you and sold you the coverage you truly needed coupled with an umbrella policy?

Here's my gist.   Selling insurance the way that we know it now might be a thing of the past.  I definitely won't totally discount what the Nomura study had to say.  So instead of calling ourselves insurance agents, and selling a commodity, maybe it's time that we market ourselves as Risk Managers.

I mean if the majority of your day involves taking change requests over the phone and cutting coverages or shopping companies everytime someone complains about price then I have to agree with the Nomura study.  The hand writing is definitely on the wall for you and your days are numbered.   Your services will soon be obsolete.

However, if you want to be a Next Generation Agent you must be willing to commit the time to:

1. Read and learn something new every day 
2. Obtain your CPCU, CIC or many other industry designations 
3. Recognize the importance of knowing ISO form language

When you do this you can become a true Risk Manager, someone there will always be a need for.  Not just someone who sells insurance.