Stockholm Syndrome in Captive Agents
I have recently realized something about a captive agent friend of mine in the life insurance and financial planning business. Over the 10 years I have known him, I have heard him complain about how some of his clients and even friends of many years have been taken away from him by independent agents. Some of these times were when he was expecting a six figure premium case from wealthy clients and because he did not have the best product or quote, his long time clients went with the other guy. He thinks it’s the clients’ fault or they were misled by a polished salesman. Of course, neither of these assumptions are true. But I think I know what’s going on….
He has Stockholm Syndrome! Stockholm syndrome is the psychological condition in which hostages form a positive bond with their captors. Those being held captive empathize and sympathize with their captors to the point that they even defend their motives.
Many insurance companies such as Mass Mutual, MetLife, Nationwide, American General, AXA, Lincoln, etc., have captive agents. These agents are not allowed or are highly discouraged from doing business with other companies. But here’s the rub, there is a double standard. The companies above and many more are available for independent agents to use. The carriers have support teams just for the brokerage channels who compete with the agents on the captive side. So what would motivate a prospective insurance buyer to work with a Lincoln or Nationwide captive agent, when that consumer could have access to those companies and more through an independent? A relationship, Maybe, but when you’re talking about 10’s or 100’s of thousands of premium dollars over the life of the insurance contract, the smartest shoppers use independent agents.