It never ceases to amaze me how life converges. It is rare to find a subject that is interesting that something else does not soon appear in the same vein.
For example, in the morning I read an article about casualty insurance that is concerned with internet sales and the commodification of some of the personal lines. Car insurance being prominent. It referred to a McKinsey newsletter that formed the basis for the article. Its title. – Adapt or find another line of work. Pretty clear.
I sent it to one of our people with the comment that this will likely happen here in respect to some forms of life insurance. When I returned from lunch I found this, from the insurance journal, in my email .
Maybe the convergence is always there, it just the noticing part that causes the excitement.
So what is the message? There are several.
Purchasing on the internet points out several things:
All for what? So the customer can think they bought insurance cheap. That is a false value. If you don’t know what was removed it is dangerous. As the old saying goes, “If you want good oats, you must pay a fair price. If you are willing to accept oats that have been through the horse, you can pay less.”
Advisors in any insurance space that want to be paid for their advice need do two things.
If you cannot do both, then learn to operate in a market that relies on price alone to differentiate, or as McKinsey suggests “Find another line of work.”
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.