Geico or Elephant

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randrew54
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Geico or Elephant

Post by randrew54 »

I'm curious to know out how Geico and Elephant are filed with the insurance bureau.

Both companies have a practice similar to Verizon or Comcast. If a customer calls to cancel they will transfer them to a specialist who is able to lower their rate. This practice is common with cable companies or cell phone providers but I'm not sure how an insurance company is able to do it.

Have you heard of this practice? If this practice is acceptable why haven't other insurance adopted this practice?
sankykid
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Re: Geico or Elephant

Post by sankykid »

How does the practice you describe work? An insured calls Geico to cancel and gets transferred to Elephant?

Elephant Insurance Company is owned by Admiral Group Plc out of the UK so the cable company retention analogy isn't applicable because the business is going to another company.
randrew54
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Re: Geico or Elephant

Post by randrew54 »

No. Geico and Elephant have the same practice cutting rates when a client calls to cancel. Cable companies have been doing this for years. I just don't know how the insurance companies are filed to be able to do this or are they doing something they shouldn't be doing?
sankykid
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Re: Geico or Elephant

Post by sankykid »

Got it. They probably have different underwriting companies with different rates. This practice is prohibited in some but not all states.
Insurance2015
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Re: Geico or Elephant

Post by Insurance2015 »

Elephant doesn't "cut rates." They usually accomplish the cheaper premium by having the customer request to be sent back to sales to receive a rewrite under the current new business rates, versus their renewal rates. Sometimes customers will go online and requote themselves under new business rates and call in asking why the new business quote is so much lower than their renewal premium, so the CSR can then transfer them to sales to have that conversation.
This is a controversial action, however, as the agent can't really suggest the customer do it under current regulations, because they lose the protections of being an existing policy holder and are again subject to underwriting, and some customers even end up inadvertently getting AUDs and cancelled in that process.
sankykid
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Re: Geico or Elephant

Post by sankykid »

Insurance2015 wrote:Elephant doesn't "cut rates." They usually accomplish the cheaper premium by having the customer request to be sent back to sales to receive a rewrite under the current new business rates, versus their renewal rates. Sometimes customers will go online and requote themselves under new business rates and call in asking why the new business quote is so much lower than their renewal premium, so the CSR can then transfer them to sales to have that conversation.
This is a controversial action, however, as the agent can't really suggest the customer do it under current regulations, because they lose the protections of being an existing policy holder and are again subject to underwriting, and some customers even end up inadvertently getting AUDs and cancelled in that process.
Does this mean they have separate rates for new and renewal business or is it just a difference of effective dates i.e. new and renewal rates are the same but become effective on different dates? If it's the former how is that not discriminatory? Is it a new customer or similar type of credit?
Insurance2015
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Re: Geico or Elephant

Post by Insurance2015 »

sankykid wrote: Does this mean they have separate rates for new and renewal business or is it just a difference of effective dates i.e. new and renewal rates are the same but become effective on different dates? If it's the former how is that not discriminatory? Is it a new customer or similar type of credit?
When insurance companies file rates, they have an effective date, and there are usually different rate tables for new business and renewal business. It is not unusual for companies to have different rate structures for new and renewal business. Usually, the new rates are meant to bring in business, so they can sometimes be more favorable to the customer than the rate they are renewing under. It isn't discriminatory because they are approved rates being applies to all business, new or renewal, at that time. Occasionally, a current customer might re-quote and get a higher rate under new business rates. It just depends on how all their factors equate into the algorithm. Since Elephant sells a lot of high risk customers minimum limit policies, most customers are very price sensitive, and they quickly learn how to skirt the insurance system on rate increases. Most will subject themselves to underwriting again from the protection of renewing simply to save some money. It's not technically unallowed by regulation or the Bureau as long as the customer is the one asking to be issued a new business policy and not vice versa.
OldIndyAgent
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Re: Geico or Elephant

Post by OldIndyAgent »

Georgia POUNDED Progressive for this in the late 90's. Since then, large companies operate an umbrella of companies, each with different rates/rules. This accomplishes the same thing, allowing them to cancel/rewrite at different rates. I don't know of any state that has stopped this practice.

In reality, I think State Farm, Progressive, Farmers, etc are soooo freaking complicated that most states look at the base loss cost and any multipiers that change and don't even bother with rates, because they don't have the skills to build them.

But hey, you can always make a complaint to your local DOI and state legislator. It would be nice if the NAIC would take this up, because it is obviously a form of consumer/agent gouging.
pageltd
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Re: Geico or Elephant

Post by pageltd »

How does favoring new business make any sense?
Is the old adage that it cost less to keep an existing client than acquire a new one, dead?
George Page
www.pageins.com
pageltd
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Re: Geico or Elephant

Post by pageltd »

Not sure how to post something to a 'forum'. I've been on this board plenty of times, but right now I'm lost. So...I've like to start a conversation. It's a large topic. Maybe no one cares anymore...but here goes nothing.

"How to generate personal lines leads"
OR
"How do you generate quality personal lines leads"
OR
"How do you generate quality, organic, package personal lines leads?

Any ideas?
George Page
www.pageins.com
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