|Recently I’ve gotten to know today’s guest, John Shettle (youtube,mp3), and all along I’ve been trying to figure out how to just hook up the cables and suck as much information out of him as I could. But how do you ask someone: hey can I just pepper you with the most challenging questions I can think of in insurance for an hour or so.. you know, for fun?
I’ll tell you how.. you start a podcast and pretend “it’s all for the audience”.
John Shettle is awesome. He’s currently an operating partner at Stonepoint Capital and grew up at a family-run MGA, running brokerage and underwriting divisions before taking that company public. The breadth and depth of John’s experience is extraordinary. As another highly successful insurance executive put it to me recently, you can never have enough time with John. I’m honored to have the chance to bottle a bit of him up for us all.
Here is the story of him firing a cherished employee for selling insurance on price:
JS: when I was running an Insurance Brokerage, it had a very very what I thought of was a low retention rate and it was an area that certainly needed to improve on… and so when I reorganized the sales function one of the things that I really emphasized was we’re not going to sell on price and when the client comes in and asks for, ah, says you shopping and he wants to get a quote we don’t respond by getting him the quote we begin to go into a process of Engagement and I also said that to the Salesforce that: “we’re all kind of salary plus commission based, if I catch any one of you just selling price and getting quotes you’re going to be instantly fired.”
And to that extent one day a young gentleman named Eric who I love to death like a son I would keep my office right in the in the area of the office where we had all of our sales reps and I would put myself in the loop when I have time to take sales calls and I overheard him on the phone: “sure mr smith, let me go and get you three or four quotes and I’ll call you back in about an hour” and it broke my heart and I fired him on spot in front of the whole sales organization.
David Wright: No kidding. What should he have said?…
John then gives one of the most lucid lectures I’ve ever heard on how to sell. He’s a master. It’s phenomenal.
But that’s not all! John also explains quite clearly how insurers get it wrong, too:
all the myriad examples of when companies got it wrong… it really comes down always to the combination of 3 things.
One is the underwriter didn’t understand the risk.
Secondly, the underwriter mispriced the risk.. sometimes that happens on purpose.
And third is what I would call sloppy underwriting so when you know you should get certain information and you don’t get it. Where the broker says yeah I know but look it’s the same as last year nobody else is asking for a renewal app why are you asking for it, right, if you want all this stuff I’m just going to go take it somewhere else. What I’ve found is that underwriting disasters happen when two of those three things happen.
And of course there is so much more, including that description of how to sell, a deep dive into the difference between specialty and standard lines and John’s first sales experience (because it’s always good to hear how even the legends start out as doe-eyed newbies like the rest of us).
JS: I remember being scared to death
JS: 25 years old.. to a retail customer a policy for $110 and it was like a nothing policy and I just remember
DW: were you kind of surprised that he bought it?
JS: yeah and I remember walking on air the rest of the day. And just the adrenaline rush of selling something and having it accepted by somebody you never met was actually pretty cool
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