The insurance industry and brokers sometimes get a bad rep. Critics claim it tries to pull wool over customers’ eyes and scam them.
Now, we don’t deny that some brokers act unethically. Ethics in general seem to be glossed over, with people treating them as another box to tick on a checklist, instead of making it an integral part of their way of being.
Over the years, we have see brokers engaging in distasteful conduct. They lie, over promise, withhold information and dupe customers. For instance, some brokers pressure customers to sign Broker of Record, or BoR, agreements which limits them to sourcing products from that broker alone.
We have interacted with these customers and they often tell us their previous broker didn’t inform they didn’t need to sign a BoR agreement. Their broker misled them to believe that the BoR was necessary to provide them with a quote.
Other brokers get intoxicated with the idea of growing their business and chasing sales to the point where they cut corners and neglect integrity. They trash talk their competitors in order to get a leg up, instead of communicating the advantages of doing business with them.
And if slandering their competition and duping customers is not enough to make the sale, some brokers have gone on to record fake sales to pad their books.
All of this is disgusting and disheartening, creating the perception of insurance as a scam.
So what can brokers do to transform perceptions? The first step is to adopt ethics as their way of being and to bring integrity to everything they do.
A big part of this transformation is clear and open communication. Full disclosure must become the default way of being for brokers. Brokers must be upfront about what they can and cannot provide. They must get accurate information from customers in order to properly price products and assess risks.
Otherwise, brokers sabotage themselves. Because brokers are licensed service providers, they are vying with lawyers and accountants for legitimacy in the public’s eye. That means a broker’s conduct and everything that comes out their mouth must be professional.
Besides, the costs of unethical conduct are sky high: potential lawsuits, toxic reputation and lack of trust. In the long term, brokers are not actually winning by skimping on ethics.
Strong values and continuing education will also play a part in transforming the industry. The right values will guide brokers through ethical dilemmas (and allow us to proactively avoid them in the first place).
Meanwhile, continuous learning and training will keep us on our toes and abreast of all the latest developments.
We need your feedback in order to transform. What has been your perception of the insurance industry and its brokers? Drop us a comment below or tweet us @TheShepherdGroup