PROTECTION OR PRICE?

Being in a hard market, as we are now, it might seem more than ever that price is the driving force when people make decisions on where to have their insurance. A hard market may be something very new to a lot of agents in our industry. Inflation had been going along at a very slow pace for a super long time. Interest rates were barely a couple of percentage points and had been low for many years.

Then late in 2021, things started to shift and in 2022, we got hit with one of the worst claims years in our industry’s history. High inflation rates, supply chain issues and labor shortages intensified the problem. Then the investment income that helps cover a sizable part of the bottom line for companies also dropped off. The Feds printed dollars endlessly - It really is not a shock that inflation became a problem.

Now, you combine the above with a customer base that has been groomed through years from advertising – that our industry definitely brought upon itself - that price is king. You all have watched and heard the commercials. Give X amount of minutes and save

Y percentage in premiums. There are many more examples, but you get the point.

As independent agents, a huge advantage we have is the fact that we have many partners. We can definitely use that! Not just for price, though. We have options that captive agents do not. It’s more important to give the customer options and for us to explain to them what’s truly at stake. Having cheap insurance is nice when writing the check for the premium. But at the time of a claim, is that cheap insurance worth anything? Spoiler alert: It can be life changing if they do not have what they need. The time of a loss is when that becomes crystal clear.

Bring the customer into the conversation. Explain the options. Then, let them make the choice. At the end of the day, after we educate our customers, the decision remains with them. But thankfully, we have many options that they can consider.

Hang in there during these challenging times. This too shall pass! Cheers to the independent agency model!