Broker vs. Computer

I am seeing more articles about the rise of the machines in the insurance industry. Every year, someone is introducing the technology that will replace insurance agents. After I am often asked, “what do you provide that a computer (or competitor) does not?” When the personal computer came out, many were suddenly able to produce their own logos, flyers & brochures. Some organizations, however, want more than they (or a secretary) can create. Similarly, in insurance, people are empowered to buy the insurance they feel is appropriate for their own needs. And to a large extent, basic personal coverage is so systematized and regulated, online purchasing works well enough. But who will go to bat for you when you believe a claim should be covered, but is denied by the system?

Factoid:  Many people mistakenly assume that everything will be covered by their insurance company.

The perspective of a professional grows in value as the risk(s) increase. If the purpose of insurance is to fulfill a requirement, the underlying strengths and weaknesses of the policy become irrelevant to the purchaser – and fixing those (perceived as “up-selling”) is undesirable. Many people unknowingly self-insure in many areas. However, If the purpose of insurance is to mitigate risks, the expert human is still necessary. A broker, like myself, works to bring a higher level of expertise/experience from a larger group to benefit their clients. I have acquired many new clients who were unsatisfied by the “surprise” cost of a loss that was not insured. I spend many hours, each week, reviewing the risks and uncovering deficiencies so we can improve our clients’ coverage. Then I spend many hours ensuring that my clients know of (and implement) non-insurance methods to mitigate their risks. Even in personal policies, many individuals have holes they are unaware of… Holes they assume don’t exist. Insurance companies are expert at putting things in boxes – and they put a lot of exclusions in their policies to keep their boxes tidy, predictable and profitable… as required by law and prudence to stay in business. Some people are happy with what they can do themselves. And some of those will be “lucky enough” to never have an uncovered loss. Others want more. Insurance companies are happy to pay us (brokers like me) to provide that expertise. They’re also happy to keep the money when individuals buy direct. Are you satisfied with your own insurance savvy – or are you one of those who want more?

Jon Barron, AAI
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