Profit from Change. Troy Korsgaden

      ISBN-13: 978-1-4566-0894-1

      Published in eBook format by eBookIt.com

       http://www.eBookIt.com

      Acknowledgments

      Profit From Change could not have been completed without the help of family members, friends, and professional associates, all of whom helped to shape my work into a book I hope readers will find compelling and immediately useful.

      Among those whose contributions I would specifically like to acknowledge are: BJ Anderson, who has been my discussion partner, daily editor, and all-around good friend; Laura Belgrave, for her creative input and final edit; Jim Pietras, for his graphic design work; the staff at Troy Korsgaden Insurance in Visalia, California- the "Ultimate High-Performance Team"; Sharon Jansma, my office director and "leader of the band"; Iva Korsgaden and Janette Somera at TKSystems, for all their hard work; my family- especially Michael and Emily, who unconditionally love their dad; and finally, all the agents, their staff, managers and company executives who have supported me in my effort to provide systems and information to the insurance industry.

      Thank you, one and all. Your help and encouragement have meant more than you can know.

      — Troy Korsgaden

      FOREWORD

      Change Ripples through Our Industry

      Over the last couple of years I’ve enjoyed the opportunity of meeting thousands of managers and agents, and I’ve had intense discussions with them about the continued viability of the agent-based distribution model. What is the value proposition of doing business with an insurance agent, and how many agents provide full value? Does the customer perceive any difference in value between insurance companies that work directly with customers and those that use agents? Ask insurance agents these questions and most get defensive. Ask company executives and, off the record, most express frustration in dealing with agents, specifically with the agent’s inability to adapt to a changing environment. Talk about tension!

      Of even greater significance, however, is a revolution going on at the customer level. With 24/7 access to the Internet, customers are more informed than ever in their dealings with insurance agents. More importantly, after being burned repeatedly by companies in all industries that over-promise but under-deliver, customers today are more wary—even cynical. Their skepticism has been fueled by the accounting scandals that engulfed some of the largest companies in America. You don’t need a Ouija Board to spell out the crisis of trust that surrounds not only those companies, but by now has leached into a lot of our biggest institutions. Fair or not, that’s just the way it is.

      Ironically, though, customers need more help today than ever before. Never mind great new technology and instant access to information. Today’s reality is that people’s lives are more stressful than ever, and as a result, time has surpassed money as their most precious commodity. It’s a new dynamic altogether. But pair that dynamic with the prevailing atmosphere of distrust, and you quickly see how the combination has thrown existing customer relationships with any business into jeopardy.

      Regrettably, our own industry isn’t immune. In fact, our industry has been altogether too slow to respond to the changing perceptions of customers. It’s even evident in the vocabulary we use. Think about the word “claim,” for instance. We use it to describe an event that triggers the fulfillment of the promise we made to our customers when they established a contractual relationship with us. Add to that what we call the people we’ve assigned to help customers resolve their problems: claims adjusters. Talk about adversarial signals! We’re off to a bad start even before we get out of the chute.

      We can also see the industry’s need for change in how agents evaluate their own success. Agents are ranked by PIF (policies-in-force) or total premium, not by customers. The life insurance commission structure frontloads commissions, encouraging agents to ignore their customers once the sale is made. Is it any wonder that the growth rate of insurance companies is consistently in the single digits? Imagine what would happen to our industry if a customer-focused company entered the marketplace.

      As these changes in consumer perception ripple through our industry, we all seem to blame each other for their cumulative effect instead of working together to adapt to new challenges. This disconnect is why I decided to write this book. I believe that agents are uniquely positioned to capitalize on the changing nature of the customer because the customer is looking for a relationship with someone he or she can trust. In the new environment, the power of the individual relationship will separate the winners from the losers. Agents have a huge head start in this environment because they are local and trusted.

      The agency-distribution system, with all its flaws, is not going away anytime soon, primarily because agents continue to deliver what insurance companies want and need—product sales. More importantly, agents are local, accessible, and can offer the human touch while giving customers what they want—peace of mind when it comes to asset protection and accumulation. Can agents do a better job of interacting with their customers? Yes, and I’ll show you how.

      Meanwhile, many companies are exploring direct-selling approaches to keep costs down and try new avenues of product distribution. Given their mandate to deliver the best possible bottom-line results to their shareholders, it’s not hard to understand their strategy. And, in fact, the direct-selling approach, which typically relies on call centers, may result in the short term with new product sales. That’s especially true if sales are based on the lowest prices. But have these companies really satisfied their goal of gaining long-term business? No.

      I believe that after reading this

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