4 Independent Insurance Issues to Ponder for 2016

It’s amazing to think we’ve officially entered the year 2016. Weren’t we supposed to be driving flying cars like George Jetson? Instead, we have drones and a fair amount of global anxiety. As we head into 2016, what should independent agents ponder for the coming year?

Driverless cars. If your agency has a personal auto book, how will driverless cars impact your business model? At the end of 2015, the United Kingdom government announced it will allow driverless cars on some public roads starting in 2017. And concerns already abound that driverless buses will eventually displace 10,000 public transit workers in the U.K.

In a CNBC interview last fall, XL CEO Mike McGavick shared his opinion that driverless cars might be covered under a product warranty that the vehicle, not the driver. If that’s the case, will agents still sell that coverage, or will the manufacturer or dealer provide it? While driverless cars are not an immediate threat, over time it’s possible that new vehicle auto insurance may not be a viable avenue for most agencies.

‘Fiduciary’ standard. If you—or your agency through a broker/dealer—offers mutual funds, retirement plans or IRAs, how will the Department of Labor’s (DOL) long-anticipated rules pertaining to the “fiduciary” standard impact your business?

The DOL’s Secretary Perez expects its rule to significantly expand the number of advisers and brokers who will be considered fiduciaries in the context of investment advice. For example, Perez highlights part of the rulemaking language that will establish a new type of contract for advisers/brokers and their clients that can apply when an adviser wants to recommend a type of product or type of investment maneuver they feel is in the client’s best interest but which also could result in additional compensation for the adviser. The adviser and the client will then have to execute a contract.

The DOL outlines this new rule language is outlined in a fact sheet and will soon publish it in full in the Federal Register. According to the DOL fact sheet, the new rule language is built on “a very simple principle: You want to give financial advice, you’ve got to put your client’s interests first.”

Online sales. The most recent holiday season makes it clear that consumer adoption of online sales is increasing exponentially. Brick-and-mortar store sales experienced a double-digit decline in November-December 2015—and while insurance is not the same type of transaction, these statistics lay bare the fact that most consumers begin their buying process online.

Independent agents need to harness the Internet to drive consumers to their websites, engage potential clients online and build a relationship from there, whether it ends up being online, at the agency or both. Are you devoting enough of your agency’s resources to digital marketing? Head to TrustedChoice.com to learn how you can propel your digital presence and drive more business to your agency.

Work/life balance. One of my personal favorite aspects of the holiday season is the opportunity to do some pleasure reading. I heartily recommend Gordie Howe’s “Mr. Hockey: My Story”—and you don’t have to be a hockey fan to enjoy it. Gordie Howe, six-time NHL MVP and six-time scoring leader, grew up during the depression outside Saskatoon, Saskatchewan as one of nine children in a house with a dirt wall and no indoor plumbing or heat. The family used to heat bricks in the fireplace, wrapping towels around them and the warm towels around their feet in the winter.

As a young teenager, Howe lifted 90-pound bags of cement in each hand when he could help his dad on construction sites. It’s no surprise that when he played 32 seasons of professional hockey, he was his own enforcer. But Howe was also devoted to his wife Colleen and family. If you’re looking for a good story that will motivate you professionally and personally, I encourage you to pick this one up.

Dave Evans is a certified financial planner and an IA contributor.