Sacred Insurance Cow Gored

I’m goring insurance agent’s sacred cow, commissions.

In an insurance industry discussion group I am asking insurance agents to consider changing the way they get paid, from commissions to a fee basis.

The response has been interesting. This morning I was branded a heretic of sorts. They accused me of working for an insurance company!

My point was merely that insurance agents who receive commissions on the policies they sell are seen, by some clients, as having a conflict of interests. Some insurance buyers see the fact that increasing premiums mean increases in commissions as tainting the recommendations agents make.

I proposed that agents consider working on a fee basis. In such a system agents would charge their client’s a fee based on the client’s perception of value to be delivered.

Some agents thought I was advocating reducing their income. Actually, I think insurance buyers would consider unbiased advice from their agents as a positive and valuable addition to service. If agents provide more value to their clients they should receive more income.

In my consulting practice I have found that a great number of insurance buyers value the fact that I don’t accept commissions or fees from insurance agents or insurance companies. That value has translated into fees for me. After I finish my work for clients I ask if they received great value for the fee they paid me. I have always received resoundingly positive replies.

I think agents who don’t look at moving to a fee model are missing the boat.

In the mean time I’m glad to help their clients.