Scott Simmonds - Insurance Newsletter

Insurance from an Unbiased Point of View
www.ScottSimmonds.com

October, 2007
Issue #89 - Since 2000

Case Study - Construction Company Insurance Renewal

Several months ago, I was retained by a construction company to help with their insurance renewal process. They had a long relationship with their current insurance agent but were concerned with the agent's complacency and the tone of renewal conversations. There was also interest in seeing what another agent in town could do.

I reviewed their insurance. We found several areas where coverage was missing or could be improved.

Specs were drawn up, the two agents requested assignment of insurers, and we were off to the races. By the way, both agents got their first choice of insurer.

The resulting bids reduced premiums 10% from last year while increasing payrolls by 40% and doubling the property coverage. The client ended up staying with the same agent, though moved part of the coverage to a different insurer.

Mission accomplished. The client received value of about 9 times my fee.

My Unbiased Advice

While this newsletter is written for insurance buyers, many subscribers are insurance agents. I regularly hear from some who are offended by my inference that insurance agents are biased in their work.

Anyone who receives a commission on the sale of a product has a natural biased to their product. You sell Ford cars, you will, naturally, recommend Ford. If you sell Apple Computers, Mac is, in your mind, the way to go.

Insurance agents or their agency is paid a commission on sales.

Insurance buyers hire me because my decisions are not influenced by commissions. In the above example of a bid project, it did not matter to my pocketbook which insurance plan the client purchased. I gave advice and information with no skin in the game. My sole interest (intellectually, monetarily, and philosophically) is in what is best for my client.

I have never said that agents make decisions based solely on commissions. However, the business interest of the agent is improved when a client buys their proposed policy. That is, at the very least, a perception of bias.

There is nothing wrong, immoral, or unethical with being paid a commission. However, as Warren Buffet has said, "You don't ask a barber if you need a haircut."

Simmonds On Bank Insurance - My new book covers all aspects of bank insurance - bond, d&o, property, workers' comp, mortgage impairment, forced placed property, liability, and e-banking. I include sections on selecting agents, the bid process, and a glossary. This is a practical and useful reference for bankers who manage their bank's insurance program.

Go To My Bookshop For Information.

Workers Comp Tool - Understand Your Experience Mod - Learn the details of your experience mod. Go to www.ModManager.com

Work Comp Experience Mod Video Explanation - Learn to understand the mod worksheet - www.ScottSimmonds.com/wc_modsheetvideo.html.

Maine and Other Stuff

I've written over the past few months about the publication of my bank insurance book. What a learning experience that has been! After weeks of promises I received the first copy of the book last week for final approval before printing. They printed the wrong draft! I was promised a revised version this week.

I bought my third apple computer a few weeks ago. My first was an Apple 2+ in 1983. I then bought a 2C and a 2E in 1986 or so. Since then, I've owned at least 8 PCs. I needed a laptop for some upcoming travel and decided on the MacBook. Great machine. No technical problems. It has taken some getting used to the differences in functionality - user issues, not machine issues.

My wife has just started a new job where she works out of the house. We quickly decided we couldn't share an office. We took over one of the guest rooms and now she is building her own workspace. Well, she tells me what to build and I get to do it. Interesting, she gets a new job and I get more work!

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business, or service associations about insurance topics. See my speaker's page.

Please Forward This Newsletter To Your Business Associates

Scott Simmonds, CPCU, ARM
Insurance Consulting
Phone 207-284-0085
Fax 802-992-4027
Scott@ScottSimmonds.com
www.ScottSimmonds.com

See My Insurance Blog - www.InsuranceBuzzer.com

Comments regarding insurance policies or products in this newsletter do not constitute an endorsement. I accept no fees of any kind from any company mentioned in this newsletter.