Perhaps the reason for the large non standard market being in Texas, Florida and California is because of the huge Hispanic population, much of it illegal aliens who often don’t have legitimate licenses and can’t get insurance in the standard market.
That’s likely true for those states but most low income people don’t qualify for the standard markets because of no prior coverage or a lapse. Some standard carriers won’t accept a 1 day lapse. In the case of poor credit, most standard markets come in at twice the premium due to credit scoring.
Confi has had a huge impact on the NS business. As much as Mr. Rothberg talks about service. In this part of the country, his agencies are considered bucket shops. They are more interested in accidental death and add on’s than servicing the client. As a large NS shop, more than $5 million I understand this market. I also have more than $5 million in preferred risk. The market share is flat from our numbers. The retention is a problem, and always will be. The cash flow to these larger agencies as dropped 15 to 20% as a result of the last 4 year economy. The only way the large NS agencies were able to survive is to add broker fees and other add on’s. I re-invested in standard and preferred.
Want to hear a good joke for the day CAWA? I attended a meeting last week with Kemper Group. They rebranded a while back and now call themselves Kemper Preferred. The meeting was making a big push for non-standard Auto and they want to compete with the Progressives of the world. Perhaps they should change their name to Kemper Non-Preferred if that is the direction they want to take. It doesn’t fit our plans since we like the standard preferred business and Kemper is not competitive on that market.
Several companies have tried to compete with Progressive on NSA (even Safeco tried the “rate for every risk” concept) and most have failed. I don’t see Kemper being successful. They were slow to react when the market turned in Fla a few years back and they’re still licking their wounds.
SW, I was just reading an article about our favorite captive competitors, the now infamous Allstate. It was in the Insurance Record. It seems the algorithms Allstate has been using in 31 states which penalizes long time customers and other good drivers. It is called Price Optimization and introducing a new rating factor called Group Rating and rates customers based on undefined Marketplace Considerations. These considerations focus on customers shopping behavior and other non-risk related characteristics than on traditional auto insurance rating factors such as driving safety record or the number of miles a policyholder drives in a year.
The bottom line is that if you are a loyal longtime customer of Allstate who doesn’t shop your insurance around, you are likely to get a rate increase. How wonderful is that?
In addition to the large populations of illegals in those states, those are also states where populations of transient citizens might go for better job prospects and a fresh start over the lives they were living before. So for instance, NY has a large population of various illegals but doesn’t have a large residual market poulation-the population isn’t growing very fast if at all in places like that, hence less of a need for non standard products.
blu, I saw an article on Google that several cities in NY state are actually losing population including Buffalo and Syracuse. Perhaps NY is doing things to run people off like excessive taxation, cost of living and over regulation. That is a sure formula to cause people to leave.
Perhaps the reason for the large non standard market being in Texas, Florida and California is because of the huge Hispanic population, much of it illegal aliens who often don’t have legitimate licenses and can’t get insurance in the standard market.
That’s likely true for those states but most low income people don’t qualify for the standard markets because of no prior coverage or a lapse. Some standard carriers won’t accept a 1 day lapse. In the case of poor credit, most standard markets come in at twice the premium due to credit scoring.
Confi has had a huge impact on the NS business. As much as Mr. Rothberg talks about service. In this part of the country, his agencies are considered bucket shops. They are more interested in accidental death and add on’s than servicing the client. As a large NS shop, more than $5 million I understand this market. I also have more than $5 million in preferred risk. The market share is flat from our numbers. The retention is a problem, and always will be. The cash flow to these larger agencies as dropped 15 to 20% as a result of the last 4 year economy. The only way the large NS agencies were able to survive is to add broker fees and other add on’s. I re-invested in standard and preferred.
Want to hear a good joke for the day CAWA? I attended a meeting last week with Kemper Group. They rebranded a while back and now call themselves Kemper Preferred. The meeting was making a big push for non-standard Auto and they want to compete with the Progressives of the world. Perhaps they should change their name to Kemper Non-Preferred if that is the direction they want to take. It doesn’t fit our plans since we like the standard preferred business and Kemper is not competitive on that market.
Several companies have tried to compete with Progressive on NSA (even Safeco tried the “rate for every risk” concept) and most have failed. I don’t see Kemper being successful. They were slow to react when the market turned in Fla a few years back and they’re still licking their wounds.
SW, I was just reading an article about our favorite captive competitors, the now infamous Allstate. It was in the Insurance Record. It seems the algorithms Allstate has been using in 31 states which penalizes long time customers and other good drivers. It is called Price Optimization and introducing a new rating factor called Group Rating and rates customers based on undefined Marketplace Considerations. These considerations focus on customers shopping behavior and other non-risk related characteristics than on traditional auto insurance rating factors such as driving safety record or the number of miles a policyholder drives in a year.
The bottom line is that if you are a loyal longtime customer of Allstate who doesn’t shop your insurance around, you are likely to get a rate increase. How wonderful is that?
In addition to the large populations of illegals in those states, those are also states where populations of transient citizens might go for better job prospects and a fresh start over the lives they were living before. So for instance, NY has a large population of various illegals but doesn’t have a large residual market poulation-the population isn’t growing very fast if at all in places like that, hence less of a need for non standard products.
blu, I saw an article on Google that several cities in NY state are actually losing population including Buffalo and Syracuse. Perhaps NY is doing things to run people off like excessive taxation, cost of living and over regulation. That is a sure formula to cause people to leave.
Those states just happen to have the lowest liability requirements.