Selling in the new environment: a Best's Review survey shows that insurance agents and brokers are contacting customers more often and providing more information in response to the compensation controversy.If a single word can characterize the immediate changes that insurers, brokers and agents are seeing in insurance selling practices since the recent controversies about those practices began, the word is more--more quotes for coverage, more documentation and more frequent efforts among sellers to reach out to buyers.In a survey conducted by Best's Review, a majority of respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. said that these days, clients and prospects typically require more quotes and that in making new proposals, they have to provide more documentation. "Customers question policy provisions in great detail, company brochures features and facts, [and] want more information on the companies," one agent/ broker said. Survey respondents included 493 insurance or insurance-related professionals, 73.2% of whom were agents, brokers or advisers. When asked what specific changes their organization has made in reaction to issues raised by the recent controversies, 39% said they are contacting clients and customers more frequently. More in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. training was provided by 23%, and 15.2% said they revamped their marketing materials. Although 31.8% said they made no changes, some described in detail what they are doing differently." [We] have disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. on our proposal and invoices" one agent/broker said. Another said," [We] sent letters outlining our position on the recent issues." Additional new practices included reviewing all contracts and agreements and putting in more elaborate systems to ensure transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. . Attempting to distill dis·till v. 1. To subject a substance to distillation. 2. To separate a distillate by distillation. 3. To increase the concentration of, separate, or purify a substance by distillation. the lesson that insurance professionals should take away from the recent controversies raised various ideas, but overall pointed to the importance of relationships in selling insurance. Respondents repeatedly stressed that insurers, brokers and agents should disclose all commissions, fees and payments. A few disagreed, however, and one said "full disclosure is not necessary as long as the buyer is happy with his purchase, and could even be bad for business and bad for the economy. There are hundreds of industries, from doorknobs to cars, that provide a 'spiff' or commission to the salesperson or selling entity once a threshold is met. These are never disclosed to the buyer and do not need to be." Several respondents attributed the changing selling relationship to increasingly sophisticated consumers. "They are no longer assuming that insurance providers have all the answers and that providers will always act in the client's best interest," one agent/broker said. "We have to evolve Evolve may refer to several terms:
n. pl. dis·par·i·ties 1. The condition or fact of being unequal, as in age, rank, or degree; difference: "narrow the economic disparities among regions and industries" in the changes in the 'trusted adviser' relationship we used to enjoy." On the other hand, some respondents said clients need to be educated about contingency contingency n. an event that might not occur. commissions, and one said agents need more training. A small group recommended changing selling-fee structures. One said the lesson that should be taken away from the controversies was "not to charge or collect any fees and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. contingent commissions Contingent commissions is a term used in the American insurance industry for any kind of broker's commission which is contingent upon some event occurring (instead of a commission paid on the sale itself). In the UK this form of payment is known as Overriders. and work on commission basis only." Nearly half of respondents said the issue of contingent commissions never comes up. For one, however, broaching broaching: see quarrying. the topic is not a problem. "We are a heavy commercial agency," the respondent In Equity practice, the party who answers a bill or other proceeding in equity. The party against whom an appeal or motion, an application for a court order, is instituted and who is required to answer in order to protect his or her interests. said. "Every time I have brought up the Spitzer Spitzer may refer to:
Where Respondents Work Other insurance-related company or organization 8.5% Insurance company 19.1% Agency, brokerage or Adviser organization 73.2% Note: Table made from pie chart. Distribution Survey Results Since the recent controversies surrounding insurance quoting and contingent commissions, our clients, customers and prospects have been More skeptical of new business proposals 34.7% Less skeptical of new business proposals 1.4% Unchanged 64.1% Note: Table made from bar graph. In making new business proposals, we find No change 25.2% More documentation is required 51.5% More business that was handled as RFPs is now handled through competitive bidding 13.6% (Some respondents gave more than one answer.) These days, clients and prospects typically require More quotes for insurance coverage 55.2% Fewer quotes for insurance coverage 2.8% About the same number of quotes 42.0% Note: Table made from bar graph. The issue of contingent commissions Comes up frequently 8.7% Comes up Occasionally 43.0% Never comes up 48.3% Note: Table made from pie chart. Clients who understand contingent commissions generally Dislike them 13.6% Don't have an opinion 20.1% Accept them 32.0% N/A 34.9% Note: Table made from pie chart. In reaction to issues raised by the recent controversies we've Provided more in-house training 23.1% Revamped our marketing materials 15.2% Reached out to clients and customers more frequently 39.1% Made no changes 31.8% Other 5.7% Note: Table made from bar graph. (Some respondents gave more than one answer.) These days, conversations with clients, customers and prospects require More time spent on disclosures and addressing issues raised in the recent controversies 41.0% About the same amount of time on disclosure issues 55.4% Less time on disclosure issues 3.9% Note: Table made from bar graph. |
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