Can Too Much Success Lead to Business Loss? Solving an Industry-Wide Dilemma in This Week's ITB InsuRant with Rick Fox

The world of insurance is facing a once in a generation dilemma. Today on Insurance The Brightway (ITB), Rick Fox sheds light on the realities of this volatile new era of the industry. See how you can breakdown this economy that has some saying being TOO SUCCESSFUL could cause you to LOSE BUSINESS! Join Rick on today's ITB "InsuRant." 

ITB is a weekly podcast brought to you by Brightway Insurance, the insurance franchising leader coast-to-coast."

Transcript

Rick:
Welcome back to the ITB podcast, Insurance The BrightWay. I'm the host, Rick Fox, and today, you guessed it, an insurant. Hey, I want to level set with everybody. I have had some really good feedback. And by the way, make sure you're connected with me on LinkedIn and send me direct messages, let me know, let us know what we can be doing better on this show. What guests you might think, what topics we might cover. A lot of the topics for the rants come from conversations I'm having with agents and carriers and, uh, you know, friends in the industry, tech people, insure tech people. Um, but my point I wanted to make was, Hey, this is just, um, this is one guy's opinion and kind of the goal of the podcast is to give you something to take back that you can use. instantaneously to help you in your day. So this isn't the gospel. And if you find one or two things out of here, and what I'm really trying to do is generate thought, like think about it through a different lens, look at it through a different perspective, and then put it into your world and apply it to how you're kind of getting through tough times, getting through good times, getting through all of the different things going on in the world as it relates to the way you run your business, the way you work in your business, the way it all works. So again, just wanted to say thank you to all of those out there that are sending me notes, great feedback. Make sure you please, if you could, make sure you are subscribed to this, the Insurance, the Brightway podcast, wherever you get your podcasts. And if you like it, please, please give us a review because we could use that as well. Uh, and share it on social. If you, uh, if you see my note in LinkedIn and I'm, I'll put it out there, share it in yours. Let your, let your universe know if you like what we're doing. All right. So enough of that. I want to, I wanted to level set and make sure people.

Okay, so got the housekeeping out of the way. Now let's dive into this thing. Today's topic, insurance 2023, the state of our industry. That's where I'm headed. So literally every conversation I'm having these days has to do with one or another part of what's going on in our industry. We've said it, everybody's saying it. We all know there is a hard market right now. Okay. I get it. It's, it's, it is, and some would say, in fact, I've had multiple people and I'm using air quotes right now say this, I've never seen anything like this. People that have been in this business for 20, 30 years. So what I thought I would do really quick, just from my seat and from my perspective is kind of go through where I think we're at in the industry and, you know, kind of look at it and give you perspective from maybe a couple of different lenses you might not be thinking about. And then, um, kind of work through, you know, what do we do about it? And, and how can we, how can we still impact in a positive way, what we're doing on a daily basis and to drive toward our goals. So I kind of broke it down into categories. I'm starting at the macro of macro levels, which is our economy. So when the economy changes, that's what usually triggers the hard market. Everyone's like, no duh, Rick, we know that. But I think it's worth digging into just a little deeper than that. So think about it in terms of The economy affects everything. It affects the ability to invest and make money. It invests our interest rates on homes. It invests all kinds of things. It affects people and how they can spend money because everything else costs more as we look at inflation as it relates to economy. So one of the things I just said, which is very important, is what it does to interest rates for homes. Homes being a very large part of what we do as an industry for insurance. We write homeowners insurance. As the economy changes, less people buying homes means more activity for those real estate agents, mortgage brokers, who could be your top, top affiliate partners in your agency, or people that refer business in, and they're just not as active. They're not as busy. People are not moving. People are staying put. So the economy is driving less activity. That activity is causing less, and I'm again, air quoting new business, even though some of it's not new, it's just somebody buying a new home. Maybe it could be new to our agency. And the trickle down of that in the, because of the economy is that it's also causing these, these crazy and I'll combine now economy with our insurance market, crazy rate increases. crazy, especially in coastal states. I live in Florida, Texas. California is an absolute mess right now as it relates to whether they can get rate, whether the carriers will do things and I'll get to the carriers in a minute. But that affects our market. So not only now, look at the trickle down here. I'm not getting as many referrals, so not as much new business. My existing book of homeowners insurance. is more volatile because the carriers are putting more rate and the rate is causing people to be frustrated with that and making calls. So either I'm losing business because they're going elsewhere or I'm having to do two, three, six X more work to keep that business with these rate increases. Okay. Not telling you guys anything you don't know. Auto insurance rates continue to trend up. I will say this about our economy and our market. Cars, actual car sales are up 5% over last year, which means we should have more opportunities to either add more cars to our existing books or add new business through that car. Again, looking for the positives and negatives and let's figure out what to do. Okay, so if I look at that market, this craziest market we've ever seen, I will tell you, I was on with an unnamed carrier on a call last night, and this carrier said, you guys are killing it. In fact, you're killing it so much that we're going to shut you down. And then this person said, and I've never had to say that in almost 30 years. So think about that dynamic. My agency is crushing numbers, new business. the product that the carrier has put out there for us to sell, and we don't get to sell it anymore because we're selling too much of it. Now, who's ever said that and thought that was actually reality? And when I look at this from a carrier perspective, I get it. They can't get right through fast enough. They're completely under... charging, for lack of a better term, in a lot of states that they haven't been able to get rate. So, the next move is slow down the agents. What the agents want to do, the agents want to sell, and the carriers want to go hold on timeout. We're in a, I mean, the carriers are hemorrhaging money right now. They really are. Like it is a, it's Armageddon out there, especially books of business for carriers. in like a Florida or a Texas or New York City, if they have a large book in that. Like there are areas in the country right now that are sitting at ungodly loss ratios with lower than they should be rates because it can't get rate approved fast enough. California, another probably the worst example, Colorado, which you wouldn't even expect, but is now bright red for most carriers because of the wildfires and things like that. And I get it. It is unbelievable, but it is real. As an agency owner, you're trying to make money. As a carrier, you're trying to make money and the carriers are not. They're not making money. So that means, and even more so you have like carriers just going out of business, going into receivership and the turmoil and volatility that causes in any given market, losing money. And then reacting by with trying to move rate or by shutting down a particular geographic or just flat out saying, we're not going to take any business. I have a friend. He's also an agent who works with us. He just got his wrist slapped by a carrier for writing nine new pieces of business in a month in California. Like that was too much. And you're like, which, what, what dimension am I in right here? Where that, where we're supposed to write less. but it's real. And that's why these are the conversations I'm having on the daily. And I wanted to have it with all of you because while we are all caught in our own day-to-day and we're all caught in making sure that we are taking care of number one, taking care of us, taking care of our employees, trying to grow our business. This is a global insurance problem that we are in the middle of. And I'm not trying to paint a dire picture. I'm just trying to paint a real picture, and we'll get to how I think you can work through this. But that carrier element is very real. Now, do I think they are a little too reactive in most cases to this? Yes. Do I wish that the commissioner's offices were faster to approve rate, even though that would cause more volatility in our customer base? but we could ride the rate wave during a hard market? Yes, but that's the reality of what's happening. And the numbers are real, folks. Carriers are getting their butts kicked right now. Okay, full stop on that. Let me move into the other side of the house, which is our customers. What is this impact on our customers? Our customers are in the middle of an economy which is stressing them out. dealing with an insurance market, which is probably for no fault of theirs, personally, our customers, showing anywhere from 20, 50, 200% rate increases on certain lines of business in certain geographics. So how do I deal with that as an agent or how do I deal with that in this industry to share that with customers? Because like, again, I live in Florida, my business is in Florida. We have an absurd amount of agents that are in Florida. And the comedy of it is right now, if one of our customers gets a renewal for their homeowners policy and their rate increases 30%, they should be dancing a jig. That's how bad it is right now. That's a good thing at 30%. They don't know that. And our customers don't. They're not educated enough globally or nationally to understand that that's the way of the world right now, which I think is partly on us, us as a, as an industry, and what I'm trying to do is educate this so we can take, we can stack hands on this and all try to move towards solutions, all being us as agents, carriers, um, the States themselves. If we can get something put together and we can all work in the same direction instead of, you know, kind of like ramming our heads against each other. Um, man, we can get through this a lot better. So the customer impact is real. They don't know why they don't want to spend more. They're already in an economy that's stretching their wallets. And now they're getting rates, more higher rates and, and what's happening in some areas, not only are they either getting an exorbitant rate increase. A lot of them are getting non-renewed because of the carrier going out or deciding they're not going to write that kind of business. And it is hard for them to find even fine coverage. All right. So let me move to the agency side and what do we do? So let me just, first, let me, let me preface with the agency side is it's on us, right? It is hard work. And I have talked to plenty of agents who want to play the blame game and they want to put it on the carrier or the economy or. their customers who are undereducated. I want that to stop if possible. I want us to take responsibility at the agent level. I want every agent out there to say, I know it's hard. I know the carriers are struggling. I know we're struggling, but let's work toward getting this the right way. You guys know, any of you that listened to my podcast in the past, you know, I love to use movie quotes. And my quote today is, we fight the fights that need fighting. It's from a silly little movie called The American President, Kirk Douglas, Martin Sheen, actually not silly. It was good movie. Um, but he's deciding what, if he wants to get into a debate with this guy that's running against him and his, and his chief of staff says we fight the fights that need fighting. This to me is the fight that needs fighting at the agency level. We've got to roll up our sleeves. We've got to. Dig in our heels. I'm going to use every silly analogy. We got to get into a bare-knuckle brawl here with the world and go win. We've got to understand the carrier mix and understand the plight of the carrier. We have to over-index toward our customers and the under-educated position they sit in worrying about the rest of their world and not wanting to worry about this, let's take that worry for them. Let's educate our customers. Let's get to a point where there are, if you have a customer that gets a 20% rate increase on homeowners during this market, they're thanking you. novel idea, right? Think about it. Let's control what we can control. What we can control is our output. We need to be proactive. We need to be in a place where we're looking at this through the lens of it's tough. All right. Fight or flight. Am I ready to get in there, mix it up, do what needs to be done, control what I can control, or am I going to fall back, sit on my hands, blame the carriers or the economy or whatever, and be in this place? All right. My answer is fight, not flight. And I'm saying find the path to success and let's go. So that starts with figuring, like doing a real soul search, look in the mirror, look at your agency and your book of business. Part of that's your geography. Where do you live? How's the market? How's your carrier mix? Are you, are you able to sell new business? Cause here's what I hear. You know what? I've got a bunch of quotes, but I'm struggling to place business because The carriers I'm working with are some of the carriers that are struggling and closing down business hubs and not giving me access or making it impossible to write business. Okay. I'm not saying to stop writing new business at all. You should keep fighting the good fight, but you know what customers are already out there, the ones you already have. Look at retention. Look at keeping what you've got as more of an impact point. during a hard market, during this crazy market where again, stack hands with the rest of our industry and we'll get through it. And find your sweet spot. If you're just taking, let's say you get 10 quotes and they're 10 completely different, unorganized, not in a characteristic or a niche that you're good at. That's not the best way to be out marketing yourself. You should be laser focused on what you know you can write. Laser focused on keeping that business on the books that fits into what you know you can write. These are proactive ways. to control what we can control. I used to coach basketball for a really long time. I can't control the refs. I can't control if the shots are missing on a certain day. The two things you could control on the basketball court is your effort and your attitude. And I'm saying that applies to what we're doing here. Your effort toward how you're going to do this in conjunction with the attitude that it takes to understand and look at it through these other lenses, have some empathy for others. while still understanding that you aren't in a great place either, man, that's going to be the secret to success. And I'm telling you, there is light at the end of the tunnel. This won't last forever. And if you can do all of these things and work in this direction and work with your carrier partners, start to work with your tech partners and see what you could be doing differently to make it easier for your staff during these times. You're going to come out of this thing like not walk into jog into sprint, but full blown Usain Bolt speed out of the gates when the market starts to turn back. So I want to, that's my, I don't know, two cents, three cents, how many cents that is of where this industry is and what that looks like and where I think we are. I want to say this, you're not in this alone. Our industry is, everyone is feeling it. And if we can work together, if we can stack hands and go forward and control what we can control. and not dwell and blame the things we can't. That is a big step in the right direction today. So if all you wrote down from this was control what I can control, and you're willing to go back to your agency, go back to your carrier, go back to your whatever business, because this is affecting everyone, and say, let's work on this. I think that's a W for the week. I think that's a W for you for the next few months longer than that, as this hard market continues. And I don't want this to have a negative connotation because I want this to be a positive. There is a way out. There's a way up and I want you to take it. Okay. That's it. That's all I got. 

I'm really, as you know, passionate about this stuff. I really want to see everybody out there succeeding. And that's just, again, one guy's opinion. I hope you liked it. I hope you come back and listen to more of like I've mentioned before. Make sure to subscribe to this podcast. This is another one of your insurrants. Glad to do it. Keep the notes coming in LinkedIn. Let me know what guests you want to talk to, who you want me to talk to. And we'll see you next week. Thanks, everybody.