No. 44: Insurance From an Agent's View
September 11th 2009 21:31
Not to crash
The American president appears to be driving a deeper wedge between the public consumers and their private insurance protection companies. Many people already have a sordid view of all persons associated with insurance because of negative personal experience with questioned or denied claims, and rising premiums. Some may also have had poor encounters with office personnel or agent misbehaviors—whether real or perceived. For every one negative encounter, however, there are many more who boast of their service, and happily recount the times when having insurance coverage “saved the day” for them. So, in fairness, let us take a look at the other side—the insurance side—while deciding if the president is correct in his accusations or not…
Insurance comes in many forms: Auto, homeowners, renters, flooding, personal possessions, contractual, creditors’, malpractice, errors and omissions, travel, mortgage protection, annuities, investment, etc. Without possessing proper coverage, our assets are always at risk from catastrophic attack.
Originally, some intrepid individual, or group, asked: “Do I/we really want to start up an insurance company?” Not only is the start up capital huge, but the risks of failure are forever looming. Once the commitment is made, contractual obligations MUST be met. If not followed through properly, then fines and jail sentences are possible. For society’s sake, regulations have been created, and laws enacted, intended to protect the public from mismanagement, malfeasance or fraud. One must be brave to enter this regulatory forest. The bureaucrats, and lawyers, stand ready at their posts, to attack any perceived wrong. Their enforcement can be crippling, and their checkbooks are gigantic!
The appeal for operating an insurance firm comes from the very reason it can and does work—the law of large numbers. For example, not all people are going to have their houses burn, car mishaps, or sickness or death all at once. Statistically, enumerators can apply a number to the mathematical risks, spelling out just how many people owning defined policies will experience claims. Working from a large enough client base, there is capital generated for holding reserves, claims payments, expenses, reinsurance, and, a bit for profit. Albeit the profit should be reasonable, if too much, then the premiums should be lowered. But, considering stockholders, who is to say what is “reasonable.” This is part of the problem.
Since the Administration is criticizing profits, we need to take a moment to look at them too. PROFIT! Now, this is a word that is currently misused by the U.S. Administration and the U.S. main stream media (MSM). Without profit, one is only a slave to any system. Psychologists use the term “positive reinforcement.” They are usually the same.
As I have said in earlier posts, without “incentive and motivation,” animals in general, and humans specifically, will NOT keep working diligently. Negative reinforcement, in the forms of too little compensation, or too little profit, will work to discourage workers. Not to mention that too much negative reinforcement in the form of punishments seldom achieves the desired goals over time. Profits, in the forms of Incentive and motivation, are what lifts all of us above common indentured enslavements. It is why too much socialism and communism have proven unworkable if applied on too large a scale. Just ask the Chinese government why it has been moving toward more capitalism? They will not tell you, but take a look at the true reasons for their growth in individual and collective advancements over the last two decades for the answer.
Without the option for choosing private insurance, we are forced to have our governments make the decisions for us through bureaucratic management and going the socialistic route. Does history reveal how well this works for Americans?
Far too many medical professionals also work under the fear of impending frivolous lawsuits. To protect themselves from looking negligent or ignorant in court, they may order many tests for their own personal protection. This raises medical costs and thus raises insurance premiums.
No doubt there needs to be some reforms since premiums are rising much too fast and this growth cannot be sustained. If the U.S. Administration truly wants to help in these areas, without removing the incentive and motivational factors, it should look first to tort reform. In genuine cases of neglect , or abuse, compensation for loses is in order, of course. America has a huge excess of attorneys in some fields. Many of them can be identified as “ambulance chasing” in order to keep up their own expected lifestyles.
I hope this helps some to see, from an insurance agent’s eyes, why he wonders if it is necessary for a full government takeover of the entire health insurance industry, either now or bit by bit. Also, maybe it will help you wonder why B.O. continues to divide us using one industry vs. the people, and another industry vs. the people and so forth. I love America and I do not like this. It is bad business.
Please keep it between the lines.
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Comment by S.L.
The Political Brief
B.O. (B.S.) just wants to socialize everything and doesn't care at all about the people he damages in the process.