When I think of insurance I think of middle-aged white guys in off-the-rack suits that have consumed too many Rotary luncheons. Their necks bulge over the collars of their crisp white shirts. Their wrists puff out from beneath their cuffs.
Toss that image away. Twenty-first century insurance men for Neitclem, a wholesale broker that offers insurance services online, aren’t middle-aged, don’t wear suits, or eat Rotary lunches. They’re not necessarily even men. I met Betty, Jose, Sean, and Gary for lunch at Dave’s Chillin’n’Grillin sandwich shop in Eagle Rock. They all showed up in Neitclem polos (company policy allows you can wear jeans if you sport the company logo) and ordered bodacious sandwiches all around.
The 20- and 30-somethings assured me that traditional salespeople, who sell policies to individuals, still dress conservatively. But underwriters, people who assess risk and determine rates, don’t need to be so formal. These folks enjoyed the laid-back banter and casualness often associated with start-ups. Though in this case there’s nothing new about the product line. Insurance has been part of our economic landscape for hundreds of years.
There is no one path to being an insurance broker. Jose came to the US from Mexico in 1991 and became legal a few years later. He’s been at Neitclem over ten years and worked his way up through several positions. Gary wanted to be an actuary but the registration and testing process was too cumbersome. Sean did a part-time telemarketing stint for an insurance company, which led him to Neitclem. Betty worked at Starbucks. “It’s rare to find anyone who studies this in school; brokers come from all paths of life.” Most underwriters have college degrees, though it’s not required. Gary added, “You just need people skills.”
Liability in commercial insurance is spread among the client base. A kitchen fire in a restaurant may trigger a big claim, but it’s unlikely that there will be multiple kitchen fires. Damage insurance for floods or earthquakes is an entirely different matter. There will be no claims at all, until there are many at the same time.
Successful insurance brokers set rates that a client can afford, but high enough to cover damages made by claims. There are rate guides, frequently updated. Sean described a new rate for food trucks. “It’s less liability than a restaurant, but more than a concession stand.”
Still, there are quirky conditions that require underwriters to finesse book rates. Betty had to figure a rate to insure goats that ate grass on Malibu hillsides. Sean had to determine how to insure a new product, eavesdrop, that retracted holiday lights through the warm weather so people didn’t have to restring their Christmas lights every year.
Commercial insurance is commodity. People are always looking for the lowest premium, in amounts that are often required by their mortgagor or a regulatory agency. There are some creative aspects to setting policies, and lots of nerdy number crunching. But mostly, these four like the job because they’re working with such a good group of people – each other.
How will we live tomorrow?
“The question makes me think of climate change. The future is going to be very hot. This is the hottest year ever. The second hottest was last year. There’s a trend.” – Sean
“Living here in LA, housing keeps getting worse. Santa Monica has some form of rent control. We are going to need to expand that idea. The only places people can own have terrible commutes.” – Jose
“People know much more now. Everything is out there; it’s all available. We know more about conditions abroad. Our youth are more aware of conditions elsewhere. This will help bring us together.” – Betsy
“I am interested in the $15 minimum wage in LA Country by 2020. How will that affect other wages and jobs? Will it raise salaries of other jobs as well? It might decrease incentives to get higher education. On the other hand, a higher minimum wage will allow folks to go to school and make more money. But there will be more outsourcing and more automated transactions.
“Underwriting will remain, at least in terms of what we do. It has already disappeared from car insurance, which is now fully automated.” – Gary