Professionalism

Classically, there were only three professions: ministry, medicine, and law. These three professions each hold to a specific code of ethics, and members are almost universally required to swear some form of oath to uphold those ethics, thereby “professing” to a higher standard of accountability.

Today, the term “professional” has expanded outside its classical boundaries to encompass those engaged in accounting, education, architecture, military, nursing, engineering, and financial services. What separates these from other occupations is their “profession” of an ethical standard.

This code is what governs professional actions and against which they are measured — just as compliance requirements and our own code of ethics govern ours in the financial services business.

The mantle of professional in the eyes of the client comes at a price. The consequence of being considered a professional as opposed to a seller of insurance policies or securities is the greater potential liability imposed by the courts. If we recognize that achieving the status of professional results in our greater liability, we need to ask whether it is worth it.

There is no question that competition is an economic fact of life. Although we often hear about the increased competition for the insurance dollar from banks, brokerage companies, and other financial institutions, we hear much less about the competition from a far more difficult source: the alternative distribution systems that insurers are experimenting with.

Insurers have determined that the agency system is an expensive way to sell insurance, regardless of whether it is life, health, or property & casualty insurance. However, the agency system continues to exist because it is also the most effective system. But what happens when the public no longer feels the need for an insurance agent?