Reacting To Bobo Column On Institutional Neglect

To The Editor:

After reading Jack Bobos column, “We Cannot Afford Institutional Neglect,” in the Sept. 23 issue, here are some observations on institutional neglect after 35 years as an insurance agent.

  1. Many insurance company executives have been caught up in corporate greed, exorbitant salaries, demutualizations, and stock options rather than spending time on industry development.
  2. Insurance companies management has become controlled by actuaries and CFOs rather than sales and marketing people. They dont understand the entrepreneurial spirit of the agency system.
  3. Name changes and marketing strategies of insurance associations are subtly changing from promoting the sale of insurance products by agents to the concept of financial advisors and planners.

It is interesting that associations like the National Association of Health Underwriters and “the Big I” that promote the sale of a product by an insurance agent have grown in membership. Like it or not you still have to “sell the stuff.” Unfortunately, many of our companies and associations have come to view “selling” and “agent” as bad words.

Jon L. Rabus, CLU, RHU
Security Planning
Carmel, Ind.

To The Editor:

For many years I have read Jack Bobos columns in the National Underwriter. However, I dont remember ever having written even though there have been times he deserved a letter thanking him for his words of wisdom and commitment to our great industry.

It seems prophetic that I chose this evening to write to you about an issue or cause that I have pondered over for several years. When I sought out the Sept. 23 issue to get your address I read his column before starting this letter. It seems to me the message conveyed in his column reveals the thoughts or feelings of a person who would be willing to consider my idea or thought and provide me some feedback or guidance.

My idea is that insurance (health and property and casualty) rates should no longer be determined by companies using experience in a specific state, county, city or zip code. Insurance 101 from my CLU studies, a couple of decades ago, taught me that the principle of insurance is to spread the possibility of a loss across many people so the cost/loss would be small to any one person or entity. If the principle still holds true today, then state insurance departments and insurance companies need to think on a larger scale and spread the cost of senior citizens retiring in Florida, Texas, Arizona and elsewhere across the United States rather than on small populations.

I cite seniors (and I am 63) only as an example. The same principals apply to hurricanes, floods, tornadoes, etc.

I believe setting rates nationally would be fairer for all insureds and could make it possible for more insurance companies to offer affordable plans in all states. Also it could be a giant step toward heading off a national government health care program.

Any thoughts or suggestions regarding this proposal will be greatly appreciated. Is this an issue worthy of promoting? If so, how might I be a part of promoting or pushing such an issue?

Clarence B. Johnson, CLU, ChFC
Clare Johnson & Associates, Inc.
Lake Mary, Fla.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 14, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.