Will the Real Insurance Broker Please Stand Up?
There are many industries full of competition and stigmas, but maybe none stronger than the insurance space. Whether its life insurance, property and casualty or employee benefits, we’re lumped together into one grouping – “ugh, insurance salesman, what creeps, so self-interested and shady” – and the list goes on… Contrary to popular belief, I know many brokers in this industry that are good, ethical, smart professionals. But, I don’t disagree with the consumer either, because the industry and how it works is a bit upside down.
What do I mean?
Let’s think about this logically. Everyone who owns a senior living facility understands the need for some sort of insurance protection and often engages with the broker community. They typically pick a broker based on relationship, reputation or capabilities. And guess what? There’s more similarity than differentiation when it comes to the broker community. It also seems that many of the operators I speak with think pretty highly of their broker. Yet, our industry still has a bad rap. How is it that the brokers are rather loved by their clients, yet the reputation of this industry is poor – to put it lightly?
Because the industry is the problem! Look around – how’s your broker compensated? Higher premiums = higher commissions. When’s the last time you met with your broker with a strategic plan on driving down total cost and receiving compensation based on lower premiums? Probably never.
How about the process of shopping insurance? When your broker shops the insurance is the carrier looking out for your best interest or their financial return? What about claims? How are your claims managed? Most of the industry doesn’t do a good enough job monitoring reserves since some carriers aren’t careful enough in minimizing claim exposures.
The list goes on and on. But here’s a hint – get the truth from your broker, reward brokers on the value they create for clients and how robust their service platforms really are. You can probably get much more out them than you know.
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