Many insurance agents are getting an additional license in their state-a Consultant's License. Most states allow this added license without an additional exam. Just complete a simple application and pay appropriate fees.
So why would an agent want to add this license? There are several reasons, not the least of which is the new healthcare law which will limit the percentage that insurance companies can charge for expenses (15% or 20% depending on total insurance company premium). Insurance company expense ratios include commissions paid to insurance agents. Downward pressure on expense ratios mean downward pressure on commissions which means agents must find other income sources to make up the lost revenue-become a Consultant.
Consultant's can charge a fee for their services because they are working on behalf of the client. Be sure and check with your appointed carrier to see if their contract allows you to do fee-based work.
Small businesses will need to comply with literally thousands of pages of new health insurance regulations in the future. They will welcome the advice and counsel of a professional insurance agent. This will provide an incredible opportunity for a knowledgeable agent, but it has to be worth their time and effort. Commission income will not be sufficient to compensate for the knowledge, time and effort that will be expected of insurance professionals.
If you would like more information on how to obtain a license as a Consultant, drop me a note or visit our website at www.itaamerica.com.
Monday, March 19, 2012
Tuesday, March 6, 2012
Self-driving cars and insurance
Over the last 6 months many articles have been written about self-driving cars. There was a story about Google doing some testing on self-driving cars as a natural extension of their project to video tape every street in the world. In fact, Google has more than 140,000 miles logged in with self-driving cars. A story in the Wall Street Journal yesterday (L. Gordon Crovitz; The Car of the Future Will Drive You) discussed how the Executive Chairman of Ford Motor Company, Bill Ford, spoke to a group about how in the next few years, cars will automatically be able to maintain safe distances, using a network of sensors, V-to-V (vehicle to vehicle) communications and real-time tracking of driving conditions which are fed into the vehicle's navigation system.
Self-driving vehicles are sometimes called unmanned ground vehicles (although a person is in the drivers seat) or as the auto industry calls them "semiautonomous driving technology." Regardless of the name, self-driving vehicles are loaded with technology and may one day change the world. Some are saying that these type of vehicles will be commonplace within 7 years.
The most amazing thing is that the technology is already available for the self-driving automobile to hit society's mainstream.
If this is truly the future of driving what impact could it have on insurance?
Many are saying that self-driving cars have the potential to reduce auto accidents by up to 90% and others are saying that we can reduce traffic fatalities by as much as 50%. It does not take a genius to figure out that if auto accidents are reduced by such a large amount it cannot be good for the insurance industry, the body repair shop industry, glass shops, doctors, nurses, physical therapists, lawyers, and a host of supporting industries.
Let's focus on the insurance agent. We know there is a lot of pressure on insurance agents in the current environment from the direct writers like Geico and Progressive and it could be downright disheartening to add the insult of a reduced need for insurance agent services if cars start driving themselves. Before someone jumps off the cliff and starts looking for a new career, or before we go back to texting while driving, or let the dog sit on our lap, let's take a step back at look at this whole scene.
First of all, very few of the scientific advances of the crystal ball group have ever come to pass. We have not entered the era of The Jetson's as many predicted. There will be huge lobbying efforts from dozens of industries and industry groups to reduce or eliminate the scaling of the self-driven auto. Literally thousands of laws will have to be written to address hundreds of issues related to driving. I find it extremely difficult to believe that thousands of cars will be driving 100 mph on the freeway in a tight formation less than a foot from each other.
On the other hand, how cool would it be able to relax in rush hour traffic?
Self-driving vehicles are sometimes called unmanned ground vehicles (although a person is in the drivers seat) or as the auto industry calls them "semiautonomous driving technology." Regardless of the name, self-driving vehicles are loaded with technology and may one day change the world. Some are saying that these type of vehicles will be commonplace within 7 years.
The most amazing thing is that the technology is already available for the self-driving automobile to hit society's mainstream.
If this is truly the future of driving what impact could it have on insurance?
Many are saying that self-driving cars have the potential to reduce auto accidents by up to 90% and others are saying that we can reduce traffic fatalities by as much as 50%. It does not take a genius to figure out that if auto accidents are reduced by such a large amount it cannot be good for the insurance industry, the body repair shop industry, glass shops, doctors, nurses, physical therapists, lawyers, and a host of supporting industries.
Let's focus on the insurance agent. We know there is a lot of pressure on insurance agents in the current environment from the direct writers like Geico and Progressive and it could be downright disheartening to add the insult of a reduced need for insurance agent services if cars start driving themselves. Before someone jumps off the cliff and starts looking for a new career, or before we go back to texting while driving, or let the dog sit on our lap, let's take a step back at look at this whole scene.
First of all, very few of the scientific advances of the crystal ball group have ever come to pass. We have not entered the era of The Jetson's as many predicted. There will be huge lobbying efforts from dozens of industries and industry groups to reduce or eliminate the scaling of the self-driven auto. Literally thousands of laws will have to be written to address hundreds of issues related to driving. I find it extremely difficult to believe that thousands of cars will be driving 100 mph on the freeway in a tight formation less than a foot from each other.
On the other hand, how cool would it be able to relax in rush hour traffic?
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