The State of Insurance Industry Education

When I entered the industry, the holy grail was attaining a CPCU designation and getting a company-paid trip to an exotic destination to receive a well-earned award. And all education was voluntary.

Then, some ivory tower regulator and/or politician, perhaps lobbied by parties standing to make money off mandated education, entered the picture. This is when mandatory continuing education was enacted. On paper, mandatory professional education makes sense until applied to a real-world setting. If a person is mandated to educate themselves, how motivated are they to actually learn? How motivated are they to provide quality advice to clients? I’ll put a gun to your head so you take these classes and get educated, or else I’ll pull the license you need to make a living! Awesome approach.

This is a direct contradiction with many states’ standard of care for agents. Many states’ standard of care for agents is that they don’t have any duty whatsoever to advise clients on the coverages they need. We have attorneys and E&O experts advising agents never to claim they are professional or advisors or anything that would increase their standard of care to a point of advising clients on the need for this or that coverage.

If I don’t have a duty to explain and advise on coverages, I don’t need any knowledge of coverages.

Outside of autocracies, the market always wins. The insurance education market quickly realized that the solution to forcing people with little desire to learn coverages and with absolutely zero commitment to learn coverages was to offer junk education for a low price that met the low standards for CE. (A low standard for CE is oxymoronic because what is the point of forcing CE if the standard is minimal?) Now we have hours of CE offered for $99 that only require an hour, at most.

The proof is how the formerly prestigious and even new quality education programs are struggling to attract participants. Their programs, in the opinion of many, have been significantly diluted. Some might chalk this up to the need to go online, but that is a cover for the real problem. The industry has some great educators. IRMI, RIMS, and the Insurance Academy offer great courses at high levels. The Captive Insurance industry offers phenomenal courses on alternative risk transfer. However, only a tiny portion of the industry takes these classes.

What does all this say about an industry with a lousy public image? It says that few in this industry, including regulators and carriers, care about improving the image of taking care of consumers. It says that almost no one really cares enough about offering the right coverages to clients to take the time and spend the money for quality education. Dispute this if you will, but the proof is evident and solid. The standards of care would be higher if regulators cared. The best classes would be full if the industry cared.

This means it is up to the individual to make a difference. This is a hard road, full of frustration, especially if an account is lost to an imposter selling snake oil solutions. I saw an example very recently, and it collectively cost a handful of commercial clients approximately $500,000 a year over the last five years. It cost the clients, but it also cost the conscientious agent a good commission. The poser wasn’t sued, and honestly, was probably so incompetent they still don’t know what they did wrong.

The solution for all who want to make a difference and truly help your clients is a professional, advisory approach. This may involve a different way of selling insurance. Or it may involve creating an advisory company. Or it may involve quitting insurance sales and diving fully into advising clients.

For those interested in enhancing their offerings and making a positive impact in the world, contact me to learn more.

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NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand Insurance Education, Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.

None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.