Independent agents should soon be getting some help with their personal lines sales— better late than never.
The delayed Consumer Agent Portal — backed by the Independent Insurance Agents & Brokers of America Inc. (IIABA) and six investor insurance companies — promises big changes.
Its backers hope that when it is launched, as is now promised in mid-2013, Project CAP should help the independent agency channel recapture and grow critical market share in personal auto insurance — a world that’s driven substantially by digital marketing and sales.
Direct response carriers grew their share of the personal lines market 10 times faster than independent agency companies from 2010 to 2011, according to the IIABA’s “2011 Property & Casualty Insurance Market: Opportunities & Competitive Challenges For Independent Agents & Brokers” report released in March. Independent agents’ personal lines market share has been on a steady decline for the past 20 years.
That trend could change if Project CAP delivers on its promise to develop an online shopping option for real-time quote comparisons in personal auto insurance available exclusively from IIABA and Trusted Choice members.
In 2011, leaders in the independent insurance agent distribution channel developed the Minneapolis, Minn.-based Consumer Agent Portal LLC as a vehicle to provide digital marketing and media services to agencies, brokerages and carriers in the personal lines insurance market.
Project CAP had financial backing from the IIABA with its Trusted Choice brand, along with investments from six insurance carriers: Central Cos., Safeco Insurance, The Main Street America Group, Selective Insurance Group, State Auto Insurance Cos. and Westfield Insurance.
The consumer web site was supposed to launch in 2012. But as of March 2013, it is still in development; its introduction is still weeks, even months away.
Project CAP has had setbacks, acknowledges Charles “Chip” Bacciocco, the newly appointed CEO of Project CAP. The biggest has been the delayed live launch of the portal on TrustedChoice.com.
Bacciocco would not reveal the total dollars invested by IIABA and its carriers on Project CAP but “a substantial investment has been made,” he told Insurance Journal.
“There was an expectation that that portal would be available in the marketplace much earlier than it in fact has been available,” Bacciocco says. “And so that caused a little bit of disappointment. Probably expectations were set a little bit too high before thorough research was done into just how complicated a project that is.”
Despite the delay, supporters remain committed to the project, he says. “All six founding companies remain strong and active supporters of Project CAP,” he says, and 18 carriers total have signed up to participate in the consumer portal.
Bacciocco took the helm of Project CAP on Dec. 17, 2012, replacing Scott Deetz as the organizations interim CEO and says he’s in the process of developing Project CAP’s permanent ongoing management team.
According to Bacciocco, the organization is now on track to deliver the Consumer Agent Portal in the spring of 2013, a development he believes will make a difference for independent agencies in their fight to win market share in personal lines.
Himself an agent by training, Bacciocco says he understands the needs of the independent agency channel. He began his career with Rollins Burdick Hunter in 1988, which later became Aon. In 1999, he left to run Gallagher’s e-business practice group, before moving to Zywave in 2006, where he held the position of senior vice president of product strategy and development. After that he returned to Aon to run its small commercial and personal lines division, and just prior to joining Project CAP he build a start up called Nickel River.
In this interview with Insurance Journal’s Andrea Wells, Bacciocco discusses why the industry needs Project CAP and what’s to come for the organization and the Consumer Agent Portal in 2013. To listen to the full podcast interview, visit: http://www.insurancejournal.tv/videos/9095/.
IJ: Why does Project CAP exist?
Bacciocco: Project CAP, an independent company formed about two and a half years ago by the IIABA and about six independent agency carriers that all together identified a need. That need was and the purpose for CAP is to help the independent agency channel to recapture and grow in a world where frankly the marketing dynamics have changed substantially. Where they have seen the direct markets and captive agency markets definitely intrude on the traditional space of the independent agent. That market share loss was fairly steady for the last 20 years. That’s pretty evident. You can see on television how much advertising there is by the direct insurance carriers and captive agency markets.
We think and we are certain that the independent agent offers a substantial value to a huge percentage of customers that really aren’t aware quite as much as they should be of the value that the agent adds in terms of offering customers choice. … We want to help agents to reeducate the public about that value proposition that the independent agents offer and make sure that they can in fact represent that to customers.
IJ: What would you consider to be some accomplishments that have happened at Project CAP? And has the organization experienced any failure or hiccup along the way?
Bacciocco: Obviously any organization that’s as young as ours is bound to have both. At least we want to definitely have more of the former if we can. The greatest success that we’ve had is generating a large amount of awareness of this issue of how independent agents are going to market themselves in a world that has fundamentally changed in terms of marketing. What do they do in a world where the social web is more important really than any other medium, where digital marketing by far outweighs all of the traditional forms of marketing where most of them were trained just a few short years ago? There are a lot of agents that still have Yellow Page ads and consider that an important part of their advertising campaign. Every year a very large percentage of the potential customers just take those phone books and put them directly into their recycling bins, so I don’t think that’s very good.
That’s a most extreme example, of course, but all forms of print advertising and more traditional forms of marketing are decreasing in their effectiveness, and digital marketing and all of its variations are overwhelmingly increasing. Just creating that awareness and galvanizing an energy within the industry — not only among agents but also among the carriers and among vendors that this is a vital trend that they have to be responsive to immediately and put real energy and thought into that’s been our biggest success. …
The biggest setback or hiccup is without a doubt that there was an expectation that the consumer portal after which Project CAP is named CAP stands for Consumer Agent Portal there was an expectation that that portal would be available in the marketplace much earlier than it in fact has been available. And so that caused a little bit of disappointment probably. Probably expectations were set a little bit too high before thorough research was done into just how complicated a project that is. We are obviously underway now to deliver that in the spring of 2013.
IJ: I believe it was the end of the first quarter that the portal is set to launch. Is that still your time frame?
Bacciocco: We’re saying spring. We like the word spring.
IJ: Do you think independent agents understand why CAP is important and how it might help their agencies sell more business?
Bacciocco: Yes, they do. There’s no doubt of that, especially because of that awareness we’ve generated. There are so many different people now talking about it. Now they may not like it. This is a management challenge for the whole industry. …
The other ironic thing here is that digital marketing represents an opportunity really for agents to do what they’ve always done best which is to leverage personal relationships. So even though they’re doing it in a new medium through slightly new tools, it’s really what they’ve always done best, which is communicate the fact that they have that expertise and that advocacy, that they’ll help customers and building that level of trust and confidence between themselves and a customer. That’s exactly what the social web allows them to do.
We just have to get them over that slight hurdle of, “Come on. It’ll be OK. It’s not as difficult as you think. In fact, it’s really very easy.” … They’re aware. A little bit of trepidation, but the fact is this is naturally where they belong and they’re going to be very successful once they get into it.
IJ: Do you worry that some momentum or support from agents is dwindling because the Consumer Agent Portal has been delayed a bit?
Bacciocco: I don’t think so. It’s really genuinely inevitable, there’s no doubt. Have there been setbacks? Sure. Are they concerned? Sure, absolutely. Once we get the portal launched and once we show them how … and by the way, the portal isn’t the whole solution. That’s just half the strategy. The other half of the strategy is understanding how to leverage your own agency’s branding power on the social web using digital marketing tools, content and tactics. And part of CAP in fact some people would say two-thirds of CAP, but I would say it’s half is devoted to educating agents and putting these other tools in their hands.
If the consumer is coming to them through the portal, that’s great. We want to make sure that they’re available for that kind of an opportunity, but we also want them to be on Facebook, and LinkedIn, and Twitter, and everywhere else that the customers are. We want to teach them how to get referrals through these social networks.
We want to teach them to do all the things they need to do to have a complete branding and marketing strategy on the digital Internet. That’s what it’s about and yes, they will get there. Are they a little disappointed that it didn’t come last year? Sure. Will they adapt as soon as it is here? Yes, they will.
IJ: What is the other half of Project CAP that you were referring to? Is it digital marketing programming you offer?
Bacciocco: I wouldn’t call it programming. We call it products and services. I think of it as a whole host of tools and services — some are software, some are consulting — to get agents to, for example, have a better website that’s integrated with the social web, that’s giving them better email tools, that’s teaching them how to do a Facebook campaign, that’s teaching them how to get referrals through either Facebook or LinkedIn. It’s a whole combination of both software tools, automation tools, and actual learning services and consulting services. Through that they learn this new form of marketing and how to leverage all these various capabilities that are out there.
IJ: You have the six carriers that you initially started with that have supported you. Have other carriers been receptive to what you’re trying to accomplish?
Bacciocco: Absolutely. They realize this is their marketing channel too. They understand every bit as much and maybe more so. They’re a little bit more analytical and they understand that this channel is their lifeline to revenue growth in the future. They’re very interested in helping agents to understand what these opportunities are, making sure that they have the tools that they need, and they are very supportive. We have 18 carriers at present signed up to participate on the portal, and we will be adding many more in the coming weeks and months. In fact I’m on a trip right now to talk to insurance companies about just that. I can’t think of one that has told me no, they would not be interested in participating.
IJ: What does it take to participate from a carrier level?
Bacciocco: It’s completely up to the carrier. You can be all in and be joined. If you’re interested, there’s a process whereby you could potentially join the investor carriers and actually sit on our board and help us make decisions and lead this initiative. You can sponsor individual products and services through our digital marketing packages for your favorite agents in targeted states or across the country. You can participate on the portal. You can participate in all the states. You can participate in a limited number of states. We literally let each carrier craft their own plan. The idea is that they would evolve and as they see success, they can participate to a greater degree.
IJ: After the Consumer Agent Portal goes live how will it get into the hands of consumers?
Bacciocco: We’re going to do all the things that all the traditional other entry points for insurance or personal lines of insurance comparative quotes use. But, to be fair, we’re not going to outspend the GEICO’s and Allstates of the world. That’s not possible and we have no intention and we’re not even sorry about that. But we will be using very targeted paid advertising.
We have a very robust search engine optimization plan. We’re actually going to leverage the fact that we have this network of thousands of agencies that will be participating. We have a huge SEO or search engine optimization advantage because of that, due to the fact that the way the Google algorithms and the other search engine algorithms work is they favor a lot of geographical spread and a lot of links. And essentially, if we get all these agencies to reference the consumer agent TrustedChoice.com, if they reference that from their web pages, the mass effect on the search engines is actually very positive.
We’re also going to leverage, to a very large extent, social media. We have a lot of plans around incentivizing users to share their experiences on the portal with their friends through social media. So there’s going to be a lot of buzz on Facebook and other places.
When people have success on TrustedChoice.com we’re going to find ways to help them inform their friends of that success on Facebook and Twitter and LinkedIn. And that should generate, not only a lot of search engine traffic, but a lot of referral traffic.
We don’t expect a giant boom on day one but we have a great strategy for generating a nice solid momentum of traffic, and that traffic’s going to lean towards organic and creative social network driven traffic, which is the best kind and fits our intended audience perfectly.
IJ: Will it be rolled out on a state-by-state basis?
Bacciocco: As far as the portal turning on, it being a website, it’s going to be on everywhere at once. But we will be rolling out the comparative rating functionality on a state-by-state basis, simply because we want to take the time to get the individual agents in each of those states integrated, trained in how to use it, ready to use it, informed and so forth. And we also may need, although this may not be true, but we may also think about which states we have carrier participation, make sure we have critical mass in terms of carrier participation.
We do have a roll out plan. It does anticipate basically getting to all 50 states over the course of about a year, year and a half at the most. Obviously, as we roll out in those first few states, we’ll learn a few things. There is bound to be something that we learn that we could do a little bit better. We’ll be improving the user experience and the agent experience as we go.
IJ: Independent agencies vary significantly when it comes to technology. Will it be available to every kind of agency, regardless of their technological sophistication?
Bacciocco: Absolutely. One of the other great things about what’s happening with the social web and digital marketing is that it’s a great leveler of the playing field. This really will allow agencies of any size to compete. There are several examples of these. If you look at the deals that are having the most success and having the most dramatic results growing their businesses, they are not agencies with big IT budgets. They’re not agencies with a huge amount of sophistication. They are agencies that have individuals that have really embraced this and dove in and are learning how to use the tools. So yes, absolutely, there is room for everyone. No one is too small. No one is too unsophisticated. If you can get to the Internet at all, then we have some form of solution for you and it will be a full range of different packages so agents can choose how they want to participate.
IJ: Are the agents that participate members of Trusted Choice and IIABA exclusively?
Bacciocco: Yes, they are.