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This sorta relates to the separate post "I don't want to tell you my current premiums".

Every year, before my homeowners renewal, I get letters from various local agents with surprisingly low homeowners insurance premiums - usually 40% lower than what I pay. Their letterhead includes the names of well known insurers (Hartford, Travelers, Safeco).

So what's the catch? Oh yeah...the quote is with a carrier that has a rating of NR by A.M. Best. One agent that quoted with a non-rated carrier responded "but they have a good rating with Demotech". I started laughing at that one.

Are agents so desperate that they'll quote with unrated companies and won't tell the client unless forced to?

big dog, it seems that the insurance industry has morphed into a price first game, no doubt the result of consumers paying attention to mainly price. You seem to be the exception since you are concerned with the financial rating of a carrier. Although many of the carriers you mentioned, Travelers, Hartford and Safeco, are "A" rated companies by AM Best.

I don't know what state you are in, but in states that allow "insurance scoring", there is no way these "teaser" rates can be accurate without the prospect providing SS#s and DOBs to the agent for quoting. These unsolicited rate letters are simply lowest possible teaser rates, which might not be anywhere near the true rate a particular prospect would receive. But the goal of these letters is to get the client motivated to call for a quote.

I am sure there are plenty of desperate agents out there, but there is also a larger percentage of the population, right or wrong, that is focusing solely on price, no matter what the coverage is lacking, or what the financial rating of a company might be. I wish there was a way to reverse this thinking. It would be better for consumers, agents, everyone.

In the personal lines arena, it's now a zero sum game. Everyone is chasing the same number of potential prospects and the only way to get attention is to scream price, otherwise why look at switching.

The industry itself has homogenized its product offerings and although subtle differences manifest from carrier to carrier, it usually takes a total loss to see those differences show up in a settlement, and at that point, the policy is coded for non-renewal due to the high loss ratio.

I remain committed to my opinion that the perceived 'need' for a real insurance advisor amongst the population at large is greatly diminished given the sameness in much of what we do and how we're perceived.

Once again I find myself voicing my satisfaction that I'm of the age I am and have limited time left in this buggy whip personal lines business.

D's, we all know too well how competitive it is, even as an IA. Can you imagine trying to start up a brand new agency today, as a newby captive Farmers, Allstate or State Farm agent?

Thanks for the comments. As to the story behind the story, what I didn't tell you is I've worked in the insurance industry for 25+ years. Both on the agency/brokerage and carrier side, and now on the "client" side in the risk management department for a large hospital system in Texas.

It used to be that, quoting any insurance coverage with a B+ (or lower) rated carrier meant the agent would put a disclaimer on the quote.

lonestar wrote:D's, we all know too well how competitive it is, even as an IA. Can you imagine trying to start up a brand new agency today, as a newby captive Farmers, Allstate or State Farm agent?

I cannot imagine what goes through the mind of a new recruit, freshly launched from the training center of any of the captives once they land in their office and begin the journey. Reality has got to be a major disconnect from what was spewed in training about just who will be interested in the product and just what it will take to first find a prospect (who by the way isn't already friend or family), sell the prospect and retain the business, all well servicing the client and asking for referrals and handling marketing (direct mail? SEO web promotion? internet leads? billboard signage? yellow pages? radio? gift card incentives?).

I also recoil in horror at what those who occasionally post here about starting up a scratch IA must think, most often with little or no experience in the biz, let alone business management.

Competition for any crumb of a client is so fierce that I see cries of dismay on agent forum's of company specific websites bemoaning the loss of one policyholder or another, acting as though the whole business is at risk when what I view as normal sloshing around occurs. At my level, if my agency loses one client, frankly, I don't care as there's always one more or a premium increase to replace it and I've just gotten used to the fact there is normal attrition in this business for a variety of reasons. But it's a sad state of affairs when an agency principal is in agony over the departure of a singular client over rates or bad claim handling or no reason at all, and feels helpless due to circumstances beyond their control.

I sound like the old man I'm becoming when I can recall an earlier, kinder, gentler more growth oriented time like it was yesterday...