Web Site, Ads to Help Agents Keep Mass. Auto Market Share

Massachusetts independent insurance agents, who now write more than 80 percent of the auto insurance market in the state, are getting some marketing help to protect that market share as they enter a new competitive rating era.

The Massachusetts Association of Insurance Agents has launched a consumer Web site (www.massauto.com) and a $1 million radio and billboard advertising campaign designed to steer the public toward its 1,600 member independent agencies.

The campaign is in part a pre-emptive strike against the potential entry into the state of direct writers like GEICO with their giant ad budgets that could lure customers from independent agents.

The state is now in transition from a system under which the state set uniform rates for all auto insurance companies and there was little incentive for drivers to shop around to a system where insurers are permitted to file and use their own rates and consumers are being encouraged to shop. The competitive rates go into effect April 1.

According to MAIA Chairman Rich Jones of the Leslie S. Ray Insurance Agency in Beverly, the radio campaign will have two stages.

“The first segment of the campaign, running from January to April, is designed to advise consumers of the importance of doing business with an independent insurance agent in order to better understand the changes in the auto insurance system and to have more choices in prices and products,” Jones said. “The second segment of the campaign, running from June to September, will integrate homeowners and business insurance ads with the auto insurance spots.”

Along with the ads, MAIA also went public on Jan. 7 with a consumer website that offers consumer tips for shopping around for auto coverage, explanations of coverages, a comparison chart of special discounts and coverage features being offered by agency companies, and a way to find a local independent insurance agent. The radio ads and billboards will include the massauto.com web address.

“Our massauto.com website is designed to assist consumers to better understand the new competitive rating system, help them to make their insurance-buying experience easier, respond to frequently asked questions about coverages, rates, discounts, surcharges and more and, finally, how to locate an Independent Insurance Agent in their community,” said MAIA President and CEO Francis A. Mancini.

The radio ads feature a street-smart cab driver, Jimmy Rizzo, advising the public of the advantages of doing business with an independent agent who can offer personal service and explain all the changes taking place in the auto insurance market. In one ad, Rizzo advises consumers against relying upon “cartoon characters” on television for their insurance— an apparent swipe at direct writer GEICO’s gecko mascot. GEICO, State Farm and several other national direct writers do not now write insurance in the state but could enter under the new rules.

“Certainly that’s always on our minds,” said Mancini of the potential for new competitors into the marketplace.

Thus far, only one additional insurer, Peerless Insurance, which is part of Liberty Mutual Group, has said it will come into the market, although it has not yet made a rate filing. But Mancini notes that new players including GEICO waited awhile before entering New Jersey after that state deregulated its market several years ago and the same waiting game could play out in the Bay State.

The radio ads have been scheduled during four flights of three weeks each on 26 stations across the state. The four flights will be heard during January, March-April, June and September. More than 4,300 radio ads will be heard over the course of the 2008 campaign. Each will highlight the advantages of doing business with an independent insurance agent and feature MAIA’s agency company partners on a rotating basis. The ad taglines will direct consumers to massauto.com.

MAIA’s billboards will be featured during the periods January to March and June to September on major highways in the Boston, Worcester and Springfield areas.

MAIA has budgeted $500,000 toward the 2008 campaign, with the remaining $500,000 expected to come from insurance companies that use independent agents. Mancini said the group is still in the process of signing up insurers to join the campaign so no final list is yet available.

This is the ninth year that MAIA’s has sponsored an Agent Awareness Campaign. The projected $1 million campaign more than doubles last year’s MAIA’s Agents Awareness Campaign. Over the first eight years of the campaign, the association says it has spent more than $3.8 million in agent advertising.

The agents’ group initiated its ad campaigns back in 2000, in part to combat insurance sales by banks and sales over the Internet. Have the ads helped? Mancini thinks so.

“Our market share has stayed about the same,” he said.