After the real estate earthquake last week . Is insurance next ?

[DonP]

I'm sure thoughts ran thru agents minds seeing the big real estate commission potential collapse last week . Insurance commissions are really a monopoly with no rebating allowed . The consumer can't negotiate the commissions . Will insurance be the next shoe to drop ?

 

[Newby]

It's definitely something that could happen. A lot of us are old enough to remember when it happened to travel agents.

 

[Yagents]

Big difference.

Insurance commissions are built into the premium and client doesn't pay a dime.

Not the same in real estate where consumer pays every penny.

 

[DonP]

Big difference.

Insurance commissions are built into the premium and client doesn't pay a dime.

Not the same in real estate where consumer pays every penny.

It's still a cost to the consumer in the total pricing of the plan . Let's say a fe product at 150% first yr and 10% renewals . $100 a month premium is about $1800 of total comp first yr . The consumer could say I want $500 of that back in rebate . That lowers there cost not the first yr . But I admit it's different than real estate in that's a lump sum up front . Why it's much different in insurance is that lump sum an agent gets is an advancement and it's unearned till it's earned . So if you gave 30% of your advancement away and the client nsf's the first or second payment you have a lose . Not only did you lose the 30% you paid the client you got to pay the full advancement back .

Think about it . Every business wether a paint contractor or car mechanic can give part of their profit ( like ins commissions) back . I can't think of any other industry were profits ( ins commissions) regulated .

 

[Bevo]

Always good to ask questions and plan, even with a sprinkle of speculation. But as the old Chinese proverb states:

The best time to plant a tree was 20 years ago. The second best time is right now.

Hammer down and take advantage of every opportunity we have now in this industry while the sun is shining. Save and invest wisely for any rainy days. While we don't exactly know what the full impact will be of Ai over the next 5 years, there's one thing for certain: It's here to stay, and it's multiplying rapidly.

 

[DonP]

Always good to ask questions and plan, even with a sprinkle of speculation. But as the old Chinese proverb states:

The best time to plant a tree was 20 years ago. The second best time is right now.

Hammer down and take advantage of every opportunity we have now in this industry while the sun is shining. Save and invest wisely for any rainy days. While we don't exactly know what the full impact will be of Ai over the next 5 years, there's one thing for certain: It's here to stay, and it's multiplying rapidly.

I 100% agree with this . None of us know the future . Just like many real estate agents are about to feel the pain in the yrs to come the same could happen to ins agents .Even in real estate the top agents will thrive . Obviously the biggest threat at the moment is mapd and aca due to being heavily gov't subsidized . But as you said hopefully people i n the industry awhile saved their money and invested it . Everything looks ok for at least 1-2 yrs . If you haven't saved your money start saving now !!!

 

[Bevo]

Everything looks ok for at least 1-2 yrs .

Agent #1 - "Only 1-2 years? We're screwed!"
Agent #2 - "1-2 years? Hell yeah, LFG, and kill it!"

Be agent #2.

 

[Yagents]

The only way to disrupt this market is for insurance companies to offer cheaper direct to consumer premiums. (Ex: Med Supp market)

If that happens, there will still be plenty of people willing to pay the extra amount for professional guidance, whether it's in the form of higher premiums or a "fee" charged by the agent (if the MC laws change)

ACA in some states allow you to charge a fee if receiving $0 commission, that happened after ACA carriers went to $0 commission in 2017.

You can buy travel or car insurance direct, or use an agent with built in fees. There are still travel agents and P&C agents that exist by the way.

Advice on complicated products will always be needed, question will be how you are paid, commissions or fees.

Same will happen in real estate, either it's FSBO format, or paying an agent a straight fee, which has already been a trend.

 

[Rick Lee]

I still run into debit agents once in a while. As long as they're still around, I think the in-home-appointment-running field agent will be just fine.

 

[tikibarrister]

It's definitely something that could happen. A lot of us are old enough to remember when it happened to travel agents.

That was due to technology (Expedia, etc.)

Real estate was due somewhat to technology but more to the courts. And the NAR was setup to be a monopoly.

Insurance companies are not monopolies. Would you say technology has affected agent commissions? It's certainly amped up competition and taken away a lot of low-hanging fruit, but has the overall commission percentage on a life policy has been reduced over time?

Will it in the future because of law or regulation? I don't think the courts are going to find anything illegal (monopolies, etc.) going on. Always possible one of the People's Blue State Democratic Republics will put limits in place.