The internal ethics battle for insurance unit managers is intense. Although they can give results to the general insurance agency manager, the methods are not in line with their personal ethics. The explosive conflicts of interest that threatens insurance unit managers in an agency are illustrated.
The life and health agency operations are managed by the insurance general agent manager. His primary focus is to maximize insurance production. He named his lieutenants insurance unit managers. A manager of an insurance unit has to manage conflicting figures within his head. These figures can be described as an angel and devil who constantly try to get their point across. Managers have a responsibility to properly train agents in writing quality cases. Their agency general manager, on the other hand is not judging them by their training and constantly referring back to the amount of premiums written.
Many insurance companies offer a reward system to the top training manager who assists the insurance general manager. The unit manager and his or her agents must demonstrate significant, steady, exceptional production growth. The general manager may then offer a generous compensation incentive. The insurance company would then take the recommendation of the “best” unit manager and assign him to lead a new office. The unit manager and the agency manager are both rewarded. This golden carrot is an enormous ego boost that few unit managers would resist trying to grasp.
Two to four training managers are common. Their mindsets are not always the same. Of course, one will often follow the general manager of the agency with the desire to please him. As a former unit manager, I have seen firsthand the arduous efforts of some to acquire new business. These are not the same practices that I would follow.
Managers had to teach agents how to write successful insurance plans. The trainer made suggestions on how to make a sale. The aggressive manager, on the other hand would do the presentation in their own way or take over when there was a problem. This method resulted in more sales. The agent did not receive any training but the general manager was very happy with the premiums.
Applications made with agents are cosigned by the unit manager. These policies are usually issued by a home office underwriter, who may not inspect them as closely as an agent. The training manager should be aware of acceptable risks. Many times, applicants had health conditions that required additional explanations or honest reporting. An aggressive manager would intervene and inform the applicant that the question was not relevant. A policy was quickly issued at standard rates and rated higher premiums.
Why should this manager be so concerned? This “writing agent” would likely be gone long before any claim was submitted for this condition. There were also more premiums piling up for a case that could not be placed if the underwriter had been closely reviewing the application. Again, the general manager of the agency was pleased with the additional premiums collected.
An aggressive manager can arrange a life insurance review appointment for clients if it becomes difficult to find leads. The manager can cherry-pick a juicy policy by having access to agency records. He would then arrange for a rookie training agent to make the appointment. The training manager already had a difficult goal in mind. The goal was to replace. The client was informed by him that the company would be ending its current coverage. He presented the plan, which included a slight increase of premiums, as the official policy. The policyholder was told not to renew the policy after it became due.
An incorrect information was given to the agency manager that the client had agreed to purchase additional life insurance coverage. This team scored another sale. The scheme to rewrite insurance meant that the home office of the insurance company was unaware of it. They would have to again pay the first year commissions. This was cash that was desperately needed. The agent wasn’t about to make a fuss. This was the perfect crime the devil made the unit manger do, and it was a career booster.
Combining these three devious tactics, it was impossible for another training manager to come close to this combination. It is not enough to be smart or qualified just by doing the right thing.
The unit manager was promoted in this instance. He was promoted to general manager of the agency soon after the opening of a new office at the home office, just a few hundred kilometers away.
A few years later, I was an independent managing general agent and no longer worked for the company. I did however receive some very interesting news. The big insurer had a new strategy. Many of the less established offices were being closed down immediately instead of being expanded. One of these offices was the one that this once-aggressive unit manager supervised.
Sometimes, good ethics don’t get rewarded quickly. But with time, they pay dividends.
Don Yerke is a published author who likes to focus on the things you don’t know and what no one else dares print. It’s okay to tell it as it is.
His new paperback book will be available on Amazon in the summer. This book is packed with valuable information about insurance brokerage, sales, and recruitment.
