People ask me all the time what I do, and when I answer “I’m an insurance agent” the invariable response is: “So what kind do you sell?” This has always bothered me, because I have always believed that insurance should never be discussed in terms of “bought” and “sold”. Insurance is intangible. It is not an item you buy in a store, as certain advertisements would lead you to believe. It’s simply a promise by the insurance company to be there when you need them.
Just like a sports agent negotiates a contract with team ownership to reflect the best interests of the athlete he or she is representing, an insurance agent negotiates a contract (insurance policy) with an insurance company to reflect the best interests of his or her customer. In order to negotiate that contract, an insurance agent must understand all the terms, conditions, and coverage that make up insurance policies, and also possess positive working relationships with insurance companies, who ultimately make the decisions on pricing and whether or not to accept certain risks. The agent must also understand the claims process so they can be an advocate for their clients, as well as be able to handle such policy mechanisms as audits and experience modifications.
So as you can see, an insurance agent provides a service, the same as a doctor, lawyer, or accountant provides a service. People don’t “buy” medical treatment. Accountants don’t “sell” tax preparation services. No one approaches an attorney to “purchase legal products”. And just like doctors, lawyers, and accountants, insurance agents must be licensed and must also carry their own insurance for professional liability (also known as malpractice liability). The insurance profession should therefore be viewed in the same light as these other professions.
Many people feel they know all about insurance, but in my 15 years in the field I have discovered that most people know very little about it. Their knowledge is based primarily on perception, which is perpetuated significantly through marketing by the insurance industry itself. Insurance is in fact something that truly requires a professional to determine specific exposures to risk and recommend solutions to addressing that risk.
Nick Chapekis, CIC, CRM
