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Anteater · 09-13-2013, 04:44 PM

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Lets face it folks: life can be a real ugly bitch. That's why via Anteater's Life Lessons, you'll get some insight into something (non-music related) that I'm familiar with, usually in a five point list format that'll give you food for thought in future encounters with said subject.

Life Lesson #1:
Five Things To Watch Out For When It Comes To Insurance

First, a bit of background. When I came straight out of college, I was unsurprisingly greeted with an inflexible and rather ornery marketplace that couldn't give two shits about my Mass Communications degree and internships. Secondly, the college I graduated from, whilst not a terrible educational institution, wasn't exactly on most businesses' top hiring locale lists when searching for new blood. Thus, I made something of a left turn and ended up getting hired as an "independent insurance producer" for Farmers Insurance, which is one of the biggest players in the industry here in the U.S.

Needless to say, I learned a lot of things during my half year tenure on the sales end of things. Wasn't exactly a walk in the park getting my certifications for auto, homeowners, health & life insurance, etc. either. Thus, here's a five point summary on a few things I learned, stuff which applies both to people looking to get INTO the industry, but also to any of you who have ever bought insurance or are getting to the point where you need to look into it.

1. Don't just sign an insurance contract because the price is low. The agents WILL let it happen even if you aren't properly covered.

The above exclamation may seem like something you all probably suspected anyway, but I just wanted to lay those doubts to rest decisively: its true to a fault no matter what company you end up going with. Even a successful guy with his own personal agency possessing a decade or more under the belt will rarely, if ever, go out of his way to tell you the specifics of a policy unless it factors into his or her pitch. As far as Farmers went, the typical renewal rate for any one person for their auto or homeowners' policies was something like 40% back in 2012. Why? Because when your rates go up after a few months, you'll most likely seek out a company that offers you a lower price for the same level of coverage.

Basically, most agents are aware of the turnover and simply want you to sign a policy whether it properly covers you or not. To quote my own regional supervisor -- "Its just a numbers game. Don't stress too much about individual prospects.".

My advice? Educate yourself a bit on the specifics of your policies if you haven't already and don't just go with someone just because the price appears low. Because they're perfectly happy to screw you over since they know you'll most likely change companies in six months anyway.

2. Being a "reserve" or "independent" agent for a big insurance company is like trying to use Google without an internet connection: futile.

I'm just going to lay it out here right now for any of you who are curious about becoming an agent for a major insurance company, are thinking about it, etc: they WILL blue sky you and then give you absolutely nothing to work with afterwards.

What does that mean exactly? Basically, most insurance companies are incredibly antiquated when it comes to training & supporting new agents who get hired. You're thrown into an industry where you are INUNDATED with competition at both the local and national level, are forced to buy all your own stuff (leads, marketing materials, direct mail, etc.) and are paid mediocre commissions despite the complicated sales & delivery process that occurs even after someone agrees to buy (for me it was 10% on auto, 20% on home and 40% on life).

Furthermore, this is the 21st century right? Well, guess what your superiors tell you if you try to do any marketing online? "You can't use Facebook to market, you can't make a website and you can't market yourself. You can only use what we provide to market." And yet they make you pay hand-over-fist for what they "provide"...*vomits*

I could go on and on all day about numerous problems I ran into getting into this industry during my six month tenure, but in laymen's terms most insurance companies with an agent program go out of their way to make it as excruciatingly difficult as possible to sell a product that's already difficult to sell in the first place.

3. To become a "career" agent for any insurance company, you have to go thousands of dollars into debt.

The selling point of becoming a reserve agent like I did for a big insurance company is that if you A. Make your 40/4 sales quota and B. Diligently attend training over a six month period in any major insurance company, you'll be able to sign a Career Agent contract and open up your own agency at a location of your choice, which then leads to huge money down the line.

Thing is, they don't tell you that you don't get that agency just because you made Career: Farmers needs to let you "borrow" money to open up the location, which you "agree" to do upon getting "promoted" from reserve to Career. Furthermore, your agency from the point it opens needs to meet certain monthly quotas or your debt accumulates huge interest. There's even a term in the industry for the process of repaying the often astronomical debt you accumulate to open an agency - "running to daylight". Scary stuff, no?

4. Insurance agents have little to no control over how much a policy will cost a prospect, but consumers always have a better option somewhere else.

The hardest part about selling insurance for just one company is manifold: the cost of acquisition when it comes to a lead who will even let you quote them can range from an actual financial cost ($10-$50 on average if buying leads, marketing locally, etc) to time (making 100 or more phone calls a day just to get someone to talk to you), to the biggest variable of all: even if you get someone to let you quote them on their cars, house, a life policy, whatever...there's simply no way to know how cheap or expensive its going to be for them until you spend an hour or two dicking with your company's quoting interface. Which ain't something you can do on a smartphone, lemme tell you lol!

From my point of view, this is a huge problem for the insurance industry. Delivery and speed is everything in today's world: How can you effectively sell something to someone when it takes you hours just to give them a price point? Especially when that's the only thing that'll make or break a sale in an industry this competitive?

It's a troubling reality that is in stark contrast to what they'll tell you at the office. During my weekly training seminars, one thing the district manager would stress ad nauseum was that price ultimately didn't matter to most prospects if the policy you pitched to them could meet their needs comprehensively. This, it turned out, was complete bullshit. Price IS everything, and how great a policy is only matters if the person can afford it begin with. People can get reliable insurance anywhere. Reliable insurance at the best price though? That's their prerogative.

5. You run into a lot of crazies, unfortunates or a combination of the two.

Just a forewarning to prospective insurers among ye: you WILL run into all kinds of prospects, and a lot of them are going to weird you the fuck out.

For example, I spent a three day stretch just cold calling last year about a month into my contract. About 200 calls in or so on day two, I managed to secure an appointment with a Russian fella (we'll call him Vlad) at a local Starbucks to go over his various policies. As you can imagine, I was pretty happy. He sounded polite, friendly AND told me he was going to open up a restaurant later in the year. I could see the big $$$ lighting up before my eyes. Za-zing cha-ching!

The following day, I went there. Was about a 20 minute drive or so. I was dressed to kill in one of my suits, had my materials and notepad ready, the works. Felt pretty damn good at first...until nearly 2 hours passed and nobody showed up for the appointment.

The crazy part? I called his phone again the next day to reschedule the appointment, only to get some OTHER Russian dude on the phone who asked me who I was working for. After a brief explanation, he told me never to call again or something would "happen" to me that "looked like an accident'. Hung up pretty fast after that one. Needless to say, I was feeling pretty scared and perplexed. Had I inadvertently nearly met up with someone from the Russian mob earlier?

On another occasion, I managed to secure a client in a nearby city. Upon arriving at her home, I was aware that I was in an economically questionable location, the "projects" as it were. The client herself was nice enough though, an older African-American lady with a big family and an incredibly ramshackled looking abode. Before even making the visit, I had done a pre-quote on her based on the information she gave me and even printed it out. The price was good, the history looked stable, etc. Basically, I thought I'd be walking out of there with 3 auto policies and a homeowners policy within the hour.

Upon hopping on her PC and doing an official quote though my company's system though, it turned out she had neglected to tell me about two prior wrecks, plus wrecks her kids had within the last year. The cost of her prospective policies, of course, skyrocketed, and there was nothing I could do. So after multiple days, many phone calls, an hour long drive and an additional hour of quoting...I walked out of that home without a sale. She didn't even have the money to pay the first month, and she was already living paycheck to paycheck.

And these two incidents were just a couple of many I ran into in my quest to wrangle the money out of people for commissions. Enlightening to be sure, but it also lets you see people at their lowest whether you want to or not.

Conclusion

Do your homework thoroughly whether you are buying insurance or getting into it as a career. Trust me on this one!