After reading the comments it seems that the agents are not to happy. They have been building up for this for a long time. Most agents have websites now. If a customer does not want to talk to an agent they can go to the agents website.
For those great Safeco agents … the company had a conference call and announced it everyone for those interested enough to call in and listen. I guess you were too busy writing business with Progressive to notice.
We are a very large Safeco agent (CA)with a very profitable book and this is the first we\’ve heard about this. If Safeco is \”taking their agent\’s feedback into consideration\”, I find it interesting that we had no clue. Wonder how many other agents haven\’t heard this ???
Memo to Safeco: DO NOT, I REPEAT, DO NOT SELL TO CLIENTS DIRECTLY OVER THE INTERNET.
The backbone of your success has always been the independent insurance agent!!
If you want to \”ride the internet wave\”, here\’s what you do: Have a quoting engine on your website, have the prospects fill it out and get a quote and then, send the quote to the closest Safeco agent to write it up. It\’s that simple. Keep the agent in the loop!
I wonder what select group of agents they are talking to. This is my first notice of this as well. Why not just shoot the agents that have stuck with them through thick and thin in the foot?
After pricing themselves out of the market with their rates they can now advertise \”We eliminate the middle man\”
Great to do business with them. You gotta love it.
We Independent Agents are such suckers. We make a company like Safeco what it is and then they cut our throats and compete against us and tell it will not take business from us. Can anyone say Progessive.
Safeco is looking for agents reaction:
here is mine… I sold my safeco stock, and I am approaching other carriers to move my personal and commercial book.
They want to reach customers who don\’t want to deal with a \”middle man\”? It sounds to me as if SAFECO and Paula Reynolds may have just tipped their hand about how they really view (their supposedly valued) Independent Agents. I don\’t really care if they market direct, but let\’s take off the rose colored glasses.
Is the CEO planning to be available to respond to an internet customer when he/she has a question? Or will it be a licensed (or unlicensed) employee of Safeco? I suppose that is somehow not a \”middle man\” and would somehow be better for the customer than dealing with a lowly agent—a trained specialist with knowledge of the local marketplace.
1. Do what you have to do to be profitable(to satisfy shareholders) which enables you to offer a very competitive insurance product and technology platform for your independent agency force.
2. If you structure it in a way that cuts out ihe independent agent you do it at your own peril & aleinate the agent. This is in my opinion would work against your best interest
3.Put your self in the independent agents shoes and do what is right.
Let\’s face it. Not every customer wants to deal with an agent or even call a company for that matter. I hope all remember it is customers that build a company not any single branch, department or distribution system.
Customers want to do business their way and that must be respected by all. Frankly, I don\’t see that the effort will be cost effective for Safeco, but have at it.
I would strongly advise that Safeco not forget who they are and what has proven itself in the past.
They had a phone conference on the 28th of March with agents releasing this news. A lot of people were rather upset. (screaming ensued)
What I don\’t get is how they think they can compete with Geico and Progressive. Those companies spend hundreds of millions on advertising in lieu of commission to agents. I doubt Safeco has the capital to compete on advertising.
They should look at the largest writer of home and auto business in the country, State Farm. Small, relation ship driven agencies. Now that\’s the model they should be adopting.
Oh on a side note Safeco did say in the phone conference the price of auto insurance would be the same online as through an agent TO START WITH. However it would be subject to change depending on the profitability. So it\’s a real possibility that Safeco will be competing for your Safeco book in the future.
THIS DOES NOT SUPRISE ME.WE INDEPENDENT AGENTS HAVE BEEN THERE GUIENA PIGS. WOULD THEY LOOK AT IT DIFFERENTLY OR TAKE NOTICE FOR INSTANCE, IF ALL THE SAFECO AGENTS SELECT A COUPLE DESIGNATED MOS AND DID NOT SEND THEM ONE NEW PIECE OF BUISNESS. THEN THE FOLLOWING 2 MONTHS START TRANSFERING EXISTING BUISNESS AWAY FROM THEM. THE AGENTS BY DOING THIS COULD PUT THEM OUT OF BUSINESS.OH I FORGOT, WE INDEPENDENT AGENTS CANNOT DO AS A LABOR UNION DOES.WE JUST HAVE TO SIT HERE AND LET THEM PUT US OUT OF BUSINESS.I ALSO HEARD NEW PRES. REYNOLDS IS REDUCING WORK FORCE BY 25% AND GOING TO OUTSOURCE THE IT WORK.
Frankly, I\’m a bit less emotional than I thought I would be. I\’ve been waiting for this call from Safeco for sometime. Seems they have forgotten who brought them to the dance.
Now for the good news. There are other companies out there interested in my Safeco book. I suppose the waite and see time may be over with this outfit.
Saving money? How? By hiring more CSU people to handle the internet business they write? By not having a true home office and renting space? Really, how long will they operate? Or do they want to get rid of this business, just like mobilehomeowner policies, changing the life insurance to Symetra? Is this the next book of business to go?
Time will tell if it\’s a mis-step or not. I really don\’t know. State Farm is a captive, direct market and they do fine. I don\’t think Safeco\’s plan is to be a State Farm. I also don\’t think they are going into something lightly. Far be it for me to think I know more about this than their analysts do.
I honestly don\’t believe Safeco will pay a ton of money for the marketing a direct approach will take. If they do any marketing, it could potentially benefit us more than them. In essence, it will not be enough to build their \”direct\” book, but it will get the brand awareness we have been asking for. I will take a wait and see approach to this rather than a knee-jerk response. I can\’t predict futures and I don\’t catastrophize based on company decisions. It isn\’t good business.
Mercury with 1980s policy change procedures, an underwriting \”interview\” where information is miscontrued, exclusions of 5 year old children who are \”great risks\” in the household, and claims staff that gets trained on how to deny a claim instead of investigating? Yeah, you take that 20% commission and watch the customer go down the street.
Before anyone \’moves a book \’ keep in mind, Safeco is the last national carrier to sell direct. Hartford has AARP, Travelers sells direct online (Geico is also their largest indep agent), AIG Direct, Unitrin Direct, and Progressive. There is a group drivers mostly younger that prefer to do business through the internet that would most likely never step foot in our offices and shop at every renewal so personally, they can have them. They don\’t have 300 million to advertise so anything they do would be very minimal.
I\’m not moving anything anywhere. Other carriers can come in begging me for my business. I\’ll ask them where their direct market is. As the last guy said- they all have them. I\’m not that naive to buy into their ploys. I\’m a smart business person and will watch my book with all carriers. My eggs don\’t go to one basket, so this little \”direct\” thing doesn\’t get my pants in a bind.
First, if you do not choose to participate in Safeco\’s conference phone calls, don\’t complain if you\’ve missed the latest information. Next, I have had the opportunity to meet the man who Safeco put in charge of this task. He said that their plan (and yes, plans can change)to go after only the segment of the population who would never darken our doorways and own only a car. They are mostly under 29 years old and single. (Unless you are a non-standard agency, why are you fighting over these folks?) If they come in through our websites, they will still be our clients, period. If they come in through Safeco, the first button will remain \”choose and agent\”. AND unlike ANY of the others, if they do come in to seek our help, we can move them to our agency with an agent of record letter, help them and retain them as ours. Also, as these folks grow up and mature, needing a house and umbrella, they will funnel them back to the agents.
I just don\’t think this is such a rotten deal. Safeco has always been a good company and I cannot imagine moving my book anywhere else.
Like Beth, I am an intelligent person who knows how to keep my business and grow it. A little change in one company will not hurt my business. I believe in the long run, it will help it.
It\’s not what they are doing that\’s upsetting the the agent corp nearly so much as the way they go about it. I\’m sure we would all argee that most of our carriers are seeking ways to deliver the product without us. It\’s up to us as agents to understand the biz landscape.
HOWEVER! I find it disingenuos for Safeco to tell me. Our plan is to compete with you and you will Like it. quote: This will be good for you, This will help us all. As one agent said during the conference call Q/A Time. \”So much for partnering\”.
Safeco has a couple of ways to kill this bad blood issue thats brewing. Either rename your on line Co. like progessive did with splitting off DRIVE or go for it on line and asign agents at a reduced commission.
Did agents really benefit when Progressive gave agents Drive? I think we would have been better off sharing in those advertising $$. And they also gave us different rates than what was available from them directly. Everybody is shopping online these days, our advantage is building relationships with our clients and advising them correctly.
Safeco has such a weak marketing program as it is, I can only wonder what they are thinking in trying to launch another means of distribution.
In the short run, if they spend millions and millions to build the brand on both sides, direct and independent, it could help the independents.
However, on the long run if they do strengthen the brand and then jerk it away like Progressive did, the independents are once again on the short end of the stick.
With either scenario, it would be nice if Safeco did a better job communicating with their agents. Progressive eroded alot of goodwill with their branding fiasco. Hope Safeco doesn\’t fall prey to the same fate.
After all those years saying they would never do such a thing. Well I\’ll just stick to Mercury and my 20% commission and lower rates. Safeco, good luck, I\’ll continue to give you 10% of my business. It\’s so simple, you can do exactly as you plan and not cut the ind. agent out, like someone else said, just send the business to us at a reduced commission, the customer would still do business over the internet and you wouldn\’t piss the agents off, my costs would be lower because of the reduced expense to market and do the data input. Safeco and the market are changing and our agency has profited greatly from the internet…why not just be partners through the internet. It\’s your company, do as you see fit…just don\’t tell us for as long as you have been in business that you would never do business w/o the agent and you would NEVER compete against the agent…well it looks to me that that is exactly what your doing..good luck. Our relationship has been going down hill for the last 10 years with Safeco….this will just help it go down a little further.
What kills me is the fact that people are replying with \”But Safeco said they are only going to go after xyz customers who wouldn\’t shop from agents anyway\”…This is after they said they would never go direct……..Can we say Naive?
What cracks me up are the people stuck on the \”they said never\”!!! I have said \”I\’ll never….\” to people/my kids/my wife/my boss/etc before. Then things changed. Circumstances changed. Did I have to hold on to that \”never\” forever? Do I know everything that will happen in life and can I predict that now? Are each of you telling me you have \”never\” done that and then things happened that just made sense for yourself or your business? This is about business. It isn\’t personal. Move out of the emotional and into the business.
Beth, It\’s not about us being smart or naive. It\’s not even about Safeco saying never,over and over again. Really to me it all comes down to the silly notion that I heard time and again in the conf call. \”You\’ll like this, it will be good for your agency because it\’s good for us\”.Kind of sounds like the same stuff they fed us when they cut our pay a few years ago.
Sure all of our companies will compete with us sooner or later, NO BIG DEAL! I\’ll happily go toe to toe based on the service we provide. I would just like Safeco to cut the BS about it being good for agent.
Frankly I do not see the upside for the company either. The largest personal lines insurer in the U.S. is State Farm. The model, local agents connected to policy holders. why recreate the wheel?
I\’m sorry to say but this looks like another American States sort of mis-step.
I\’m not happy to hear they\’re going DIRECT, but some of the comments made by my brethren were way out of line. With \”loyal\” partners like this, why wouldn\’t they think \”direct\”?
I moved customers to Safeco in \’03 when the auto rates were good. I moved that same group to Travelers last year. That\’s the benefit of being independent. Remember? We can put them where we have the best price. After losing a customer of fifteen years to Progressive for SIXTY DOLLARS A YEAR, I no longer kid myself that it\’s about relationships. Those days are gone. We share the blame that it\’s all about price.
Okay, so everyone wants to move their books. Where to? Travelers? They have Geico. Hartford? They have AARP. AIG? They have a direct channel. Unitrin/Kemper? They, too, have a direct channel. Allied? Oh, yeah…they are Nationwide. Encompass? Oops…they are Allstate.
So….where are you going to go? It\’s a little comical to read everyone threaten to move their books due to Safeco going direct when all of our other markets are doing it, too. Logistically it makes absolutely NO sense. But, move your book. As it has been said, customers go for price. The agent down the street will probably still sell Safeco and I hope it will be me taking your business from you. After all, if you are not looking out for the best interest of your clients and are only \”getting even\” with a carrier out of spite- it will catch up with you eventually. If it hasn\’t yet- consider yourself lucky….for now.
Since all of their business is produced by the \”middlmen\”, why don\’t we middlemen move our books and put a run on that bank!
This is what happens when you combine a GEICO/Progressive mindset of the COO with a former energy company CEO. They are looking at Berkshire Hathaway and want to be GEICO – a mono-line carrier that raids a portion of a persons financial security portfolio, and leaves the rest to go find a home. Safeco has turned into a peddler\’s company hocking policies as if they were housewares.
Allstate did this exact thing 5 years ago. Their program allows a person who doesn\’t want to talk to an agent, to buy Allstate Auto over the internet. They are then handed to an agent who receives 3% commission on the account. The agent then has the ability to cross sell the customer (home owners, life, umbrella etc.) If they cross sell the account the commission on the auto goes to 7%, they receive regular commission on what they sell. It has worked sparingly. Most people buying insurance on the internet are substandard. They keep their policy for 6 months and move elsewhere. Not your best customers. I wouldn\’t worry about it. Allstate agents went nuts when it happened, and it was much ado about nothing.
Well, let\’s see…94% retention, I\’m not sure what street your talking about, but my customers aint going there. The agent makes a difference…and all those exclusions and other rules you mention, well, you just don\’t get it do ya…my profit on my Mercury book is triple what it is on any other company we represent and I\’ve got em all. Bottom line, it sounds like you just don\’t get it. The Mercury agents I know have agencies that are worth double what a agency w/o Mercury is worth. I\’m whining all the way to the bank. Also, with a good agency mgt. system and good internal rules and Mercury is just as easy to do business with as any other company.
I knew over ten years ago when I moved over a million dollar book away from Safeco that they had internal problems. I have now watched them over the last ten years as they have reduced commissions, not commparitively improved on their customer service and agency service, not become competitive in our market, and have noticed that they still don\’t really listen to their agency force. If Safeco adds to their distribution system without making the agents a vital part of their new distribution system, you wil have to ask yourselves if they are a company you want to continue to build your future around.I do not regret the decision I made over ten years ago.
I think it was back in the late 80\’s…Safeco tried something called DIRECT RESPONSE, as I recall, through a tie-in with First Interstate Bank…it flopped and they lost agents, too.
I\’m insured with Safeco. My wife hit a coyote recently and they wasted 11 days before *authorizing* a $2500 repair… great business practice with a $50/day rental car cov. tab. I\’ve been a Safeco agt. since the 60\’s…and their brilliance is best demonstrated by the American States M&A…what\’s a loss of a couple $$$ Billion?? (A disaster caused by beancounters & marketers trying to design contractor\’s liability programs… not underwriters.) Too bad John Phelan retired.
Also, I wouldn\’t malign Mercury if you haven\’t been there. George Joseph is the most Ind. Agt. minded CEO I\’ve known since I started in the 50\’s.
This new Safeco bunch are strictly marketing oriented non-insurance people. I predict they will implode just like almost every other industry that disavows its established marketing base. My Safeco book is 10% of my Mercury book, and I\’ve been a Safeco agent longer. I\’m insured with Safeco until the Mercury HO program\’s coverages and underwriting limits mature closer to my situation. I asked Mcwhatshisname in an open Regional meeting if they were considering Mercury\’s reduced limits endorsement on parent\’s auto policies for new youthful drivers with no assets. (A no-brainer in the right conditions.) He assured me that they were looking into such things that have made Mercury an auto underwriting icon. Looks like the answer is a new computer program.
They want to be the next Progressive. Stay tuned for the m/cycle ta-do on the 14th.
IMHO the marketing solution is do it just like Mercury already is doing. Create a broad scale marketing program… establish a referral procedure…make the agents pay their fair share.
SAFECO, State Farm, Allstate, and others, all started with an idea that succeeded, and all a little different. The most successful grew on person to person contact and quality product with the consumer primary. — Does the key board breath?
jn
I find automation expert to be right on the money. Unfortunately.
As an underwriter at a Safeco competitor (we actually heard this news about Safeco early last week) I find my job in serious peril as more automation comes into play. I am already no longer needed for underwriting our auto product at a policy level; each risk prices itself. My job relies on the homeowners product continuing to remain a bit trickier to meet eligibility at an adequate premium while maintaining acceptable loss ratios. But I expect with time, this will also be highly automated and the only one left standing will be the actuary to fix the product pricing as a whole.
You think Mercury is better with claims than Safeco? That\’s laughable. Mercury\’s claim adjusters are morons, and they take forever to issue and endorsement. They\’re a pain to deal with and there is too much back end work after the policy is written. I wouldn\’t write anything with them. They might be ok in CA, but they\’re terrible in Texas. Their billing plans are bad, customer service is bad, and underwriting is a pain and unflexable.
Travelers spent $150,000,000 putting together a website that sold a lousy 400 policies. Safeco has the so-called \”Virtual Producer\” which has been a big flop. Now they want to continue the VP but service it themselves. We are a VP and all we get out of it is junk customers.
To all you peddlers that hock primarily auto policies for a living, these types of moves are your fault. Live by the price, die by the price. You\’ve trained the public to believe a good price equals good insurance. That\’s dumb.
Finally, the sale of the home office should make every Safeco agent wonder what sort of behind the scenes due diligence is being performed. I smell a sold company.
We beg for a reduction in rates or better commissions from the company for years. So when the CEO makes a wise business decision to obtain space at $25 a square ft rather than $50 or to take advantage of employees telecommuting, we all jump to conclusions and scream the company is for sale. Take a look at the big picture, Safeco\’s expenses are out of line with some of the top dogs in the industry by a couple hundred million and real estate is the one of the more costly and easier expenses to change. They pulled themselves out from the Amer States fiasco and got their expenses back to avg but to really succeed they\’ll need to tighten the belt even more. Quit jumping to conclusions and being so narrow minded.
Hey, Wise up.
Who got them into the Amer states fiasco they had to pull themselves out of?
Answer: Back office smart people, number crunchers who often misjudge real world dinamics. My market savie says they\’re up for sale shortly. But even at that it\’s no time to panic.
Listen up auto-policy sales people. You pick up a ringing phone, identify car type, type the data into your computer, quote insurance, and if it converts, you add the customer to your book. What are you making? $100,000 per year? Even McDonalds is starting to use call centers to take orders from the drive through. You don\’t even know that when you order a Big Mac you\’re possibly talking to someone in North Dakota.
When policy makers go it\’ll be higher tech that does it. There are voice automated systems currently in use by other industries that could do parts of your job with about a 95% success rate. We\’re talking no human involvement. Called UPS lately? You can track, change address, do all kinds of things without even talking to a human. No push buttons, just pure clean technology in action.
You cost too much.
Eliminate 10,000 of you and the parent company saves a $billion a year. Loyalty is to the shareholdsrs, not the wage earners.
Open your eyes.
No problem. When the average insured reads past the name and address of their dec page and your automated systems know how to awnser coverage questions then i\’d be happy to let my staff go and put these systems in place…..Oh wait, that will never happen. Long live the independent agent.
Oh and companies that operate on loyalty to share holders fail eventualy. It\’s the companies that operate on loyalty to \”Stake Holders\” that succeed.
Automation expert?…let me guess. You designed american states \”com-line\” (shudder).
Return to your cubicle and patch my agency management software.
Automation expert.
More proof that my earlier comment is on the mark. \”Back office smart people, number crunchers and now add to that AUTOMATION EXPERTS often mis-judge the real world dynamics involved in delivering product to the market place.
I did enjoy your comment,it was a quick read that made me chuckle.
Crazy talk. Paper will never fly through the air, waaay too complicated, Oh wait. FAX MACHINE.
Every executive needs a secretary, Oh Wait, answering systems and PC\’s.
Every aeroplane trip is sooo complicated we need a travel agent for every little thing, Oh wait, Orbitz.
We will always need cashiers at the supermarket, Oh wait, AUTOMATED CHECKOUT SYSTEMS.
You are well paid so think you earn it. But believe me, you reduce it to the minimum number of questions possible and produce a quote based on the customers answers. Do you really think that would be so difficult to program?
Voice synthesis and speech recognition are here. All that’s left is the logic. You could quote me car insurance with less than ten questions because you’re good at your job. And over 90% of your car policies are probably created the same way. Sure, you can come up with exceptions, and one by one a good programmer can knock them down. But even if I can only automate 90% of the calls, what does that leave you with?
All my above examples have relevance to your industry. Pay attention!
As for answering to the shareholder, companies exist for two reasons only, self sustain and profit. If they can increase competitive edge, or increase profit by cutting you out, believe me, they will. The only company that exists for your personal gain is your own.
Yes, automation expert. I work for, and write software for, and am a shareholder in a company that creates automated checkout systems for a few little chain stores. You may have heard of Walmart, Safeway, Albertsons, and Home depot. By the way, our business is up 1,900 % over the last three years, how are you growing? Next we\’re moving into voice.
Listen, you can ignore it if you want. Write me off as a kook or whatever but we’re in an expanding business and we’re aggressively looking for the low hanging fruit. Right now the insurance business appears quite profitable and very do-able. Dazzle me with all your coverage questions, I’ll need them for our Database.
Wow. That was a great reply. Too bad it has nothing to do with insurance. That works great for selling Twinkies, the latest widget or an airline ticket.
Let me equate it to something that might be closer to your field. The average (95%+) consumer doesn\’t know how to, or even want to write a program to run on their computer. Guess what? Insurance is much the same way. It is an extremely complex and dynamic product which the average consumer couldn\’t care less about.
That\’s why we see many people give the direct writers a chance and then come back to an agent in 6 months with polices written at 25/50/10 when they own a $500,000 home and have a lot of assets. But guess what they just saved 15% or more on their car insurance!
They didn\’t get the policy or coverage they NEEDED from the online wholesalers. Sure you can say \”Well that\’s what the customer wanted\” but that\’s what separates a good insurance agent from a phone jockey, or burn and churn website.
Which brings us back to the whole gist of this article. Safeco used to have the mindset of the agent being THE partner in selling, servicing, explaining insurance to the buying public.
Now it looks like they will be treating the product more like a box of Twinkies instead of the 100+ page legal contract that most auto policies are.
Now I must go. I\’ve got to code a c++ program that auto posts my reply to this thread because it\’s just so easy to do. Why pay a programer?
Thanks for that honest but difficult response.I also believe this is the way things are going and that everyone in the industry will have to recreate themselves to some degree in order to survive the changes. Again my main difficulty with Safeco is them telling us, \”you\’ll like it, \”it will be good for your agency\” WELL B/S. How do you say that sort of thing with a straight face to your so called partner.
And as for techno man automation expert fellow who kicked off this RE: RE: RE: deal, what the heck do you know about insurance. Have you been a Safeco agent from the dawn of time like some of us. I think not! Are you versed in legal contract verbage, I bet you don\’t even know if your health plan is gauranteed renewable or non-cancellable. It\’s all the same until you have a claim. SO go be your own agent see how it works out for you.
In response to BadJuJu, here\’s what I know about insurance, I have some. Quite a lot actually. I let my agent tell me what I need, I trust him to do the homework, and I pay my bills. On the rare occasions I have had a claim I trust him to handle it professionally and accurately. I like the guy, and he makes a lot of money, mostly because he’s good at what he does and he has a pretty big book.
Here’s what else I know, automation will not work for everything. It won’t sell clothes in a high-end boutique; it won’t diagnose a patient based on symptoms, it won’t cook a meal, and it won’t write a complex home owners policy. So if that makes you feel good, it won’t happen. Feel safe now? Don’t.
All the arguments (or Denials) posted here quickly reach for exceptions that are currently difficult or impossible to automate, and cling to them like some kind of proof that no part of it will ever happen. Let me tell you something. We don’t want to handle that stuff. You’re right, it’s too damn complex. What we to go after is the easy stuff. There are tens of millions of people out there who have basic auto policies and nothing more. Any one of you could knock one of these out in your sleep. Those are the ones that’ll go first. It’s an easy foot in the door and won’t break any agency.
But think about my agent, who I started with on simple auto and renters policies, I grew with him. Now he covers my cars, houses, boats, life, etc. What happens when customers start working with a “system” rather than an “agent”? When do you get them? Will you be able to pry them away from the system? Or will the parent company open a call center with dozens or hundreds of call agents who can answer the more complex questions, especially when prompted by superior software.
Don’t kid yourselves, just because a automated system can’t stock the shelves and bag the groceries, that doesn’t mean it cant sell the groceries. Just because it can’t write a complex homeowners policy with second vacation home and part time rental situation, it doesn’t mean it can’t write a simple auto policy.
Frankly, costs of automation have come down so far that it may even begin at your (the agent) level. Some of you have small shops with a couple junior agents on staff to write auto policies. Their primary qualification is whatever training you’ve provided and the ability to fog a mirror. What if you could replace them with a machine that wrote comparable numbers of policies but only cost $20,000 to $30,000 to install and a few hundred a month to maintain? Are your juniors making more than $35,000 a year right now? Of course they are. So something like this could be a money machine. It costs less for full page Yellow Page ads and flooding the airwaves with your phone number then it does to pay the overhead on these agents. It also has a better chance of keeping the customer on your book as they mature into bigger and more complex policies.
So even if the parent company doesn’t try automation, Your competition might.
Listen, embrace this stuff or not. ATM’s didn’t eliminate tellers, but without ATM’s there’d be a hell of a lot more bank tellers today. Automation will not eliminate Insurance Agents, but with automation we may need a hell of a lot fewer agents in the future.
Embrace this stuff or not, but don’t bury your head in the sand and deny it’ll come. That’s just foolish and arrogant.
You raise a valid point about Mercury\’s \”back end work\”. It is what keeps them one of the more profitable higher commission paying auto carriers in the biz. That complete info gets the right premium for the risk. Had you been an underwriter for 10 years, you might better appreciate the necessity of full disclosure. Had you been a Mercury agent for 35 years you might enjoy the benefits of some of the lowest rates at the highest commissions (Merc app discloses that comm/continency avgs. 17.1% on auto in CA.)
We wrote a 1 pt. Geico risk yesterday that was being billed $1350/6 mos. for $505/6 mos. in Mercury…covgs almost identical! We ask about 8-10 underwriting questions, not name address, veh info, limits, etc., but hard ball underwriting questions before we quote Mercury. If you think that the way the questions are answered, the attitude of the caller and the caller\’s evasiveness have nothing to do with placement…you are in the wrong biz. That sense cannot be built into a check box automated program, either. This is a detail oriented career, and if dotting \”i\’s\” is not your thing, neither is being a Mercury agent. Many call…few are chosen. The chosen have little of your petty concerns at the annual October meeting where $$$ millions of profit-sharing checks are distributed. And with over 3000 Merc accounts I can tell you their claims service is no worse than Safeco\’s. I personally handle every claims complaint for 2 offices…about 1 every 3 months. Most all are 1st ever claims where a close friend is their claims advisor. In the past 4+ years we have taken 10,000 pictures of veh. without immediate prior cov. That means \”0\” pre-existing damage, modified vehicles, etc. snuck by us to Mercury\’s detriment. You sound like an order taker…not an insurance professional dedicated to providing the best coverage at the proper premium in a reputable carrier dedicated to protecting your clients…or a case of sour grapes because you didn\’t make the Mercury team.
You could not have said it better. I\’ve been doing this for 25yr\’s and no other company has figured it out like Mercury. Safeco Exec\’s…are you listening???I doubt it, I don\’t think they have ever really listened to their agents. I\’ll take my 20% commission and 94% retention all day long compared to the same retention figures with Safeco at 10% commission…Mark, just so you understand, that\’s not 10% less or 10 pt\’s less…that\’s half or 50% less commission and I\’ll bet we only do abount 15% more work for Mercury…U do the numbers…the few the proud, the Mercury agent. But hey what do we Mercury agents know…we only get paid double of what Safeco pays us..man are we stupid.
Mercury Ins. Co. sounds interesting. Still though, how do you think Safeco will fare through these changes. I\’m not convinced that the fortune they are seeking is within their grasp.
I am certain of one thing with Safeco, it has all been very well planed out. I\’m sure they rehearst the conf. call acrimony before hand and are even monitoring these sites.
If so, all I have to say is Bla, Bla, Bla, because they never have been very good at listing to us agents anyway.
After reading the comments it seems that the agents are not to happy. They have been building up for this for a long time. Most agents have websites now. If a customer does not want to talk to an agent they can go to the agents website.
For those great Safeco agents … the company had a conference call and announced it everyone for those interested enough to call in and listen. I guess you were too busy writing business with Progressive to notice.
We are a very large Safeco agent (CA)with a very profitable book and this is the first we\’ve heard about this. If Safeco is \”taking their agent\’s feedback into consideration\”, I find it interesting that we had no clue. Wonder how many other agents haven\’t heard this ???
We heard about it last week from our AIG marketing rep!! I guess \”the wife\” is always the last to know …
Memo to Safeco: DO NOT, I REPEAT, DO NOT SELL TO CLIENTS DIRECTLY OVER THE INTERNET.
The backbone of your success has always been the independent insurance agent!!
If you want to \”ride the internet wave\”, here\’s what you do: Have a quoting engine on your website, have the prospects fill it out and get a quote and then, send the quote to the closest Safeco agent to write it up. It\’s that simple. Keep the agent in the loop!
I wonder what select group of agents they are talking to. This is my first notice of this as well. Why not just shoot the agents that have stuck with them through thick and thin in the foot?
After pricing themselves out of the market with their rates they can now advertise \”We eliminate the middle man\”
Great to do business with them. You gotta love it.
We Independent Agents are such suckers. We make a company like Safeco what it is and then they cut our throats and compete against us and tell it will not take business from us. Can anyone say Progessive.
Safeco is looking for agents reaction:
here is mine… I sold my safeco stock, and I am approaching other carriers to move my personal and commercial book.
They want to reach customers who don\’t want to deal with a \”middle man\”? It sounds to me as if SAFECO and Paula Reynolds may have just tipped their hand about how they really view (their supposedly valued) Independent Agents. I don\’t really care if they market direct, but let\’s take off the rose colored glasses.
Is the CEO planning to be available to respond to an internet customer when he/she has a question? Or will it be a licensed (or unlicensed) employee of Safeco? I suppose that is somehow not a \”middle man\” and would somehow be better for the customer than dealing with a lowly agent—a trained specialist with knowledge of the local marketplace.
\”Middle man\”!!! I can\’t help but laugh!!
MEMO TO SAFECO MANAGEMENT:
1. Do what you have to do to be profitable(to satisfy shareholders) which enables you to offer a very competitive insurance product and technology platform for your independent agency force.
2. If you structure it in a way that cuts out ihe independent agent you do it at your own peril & aleinate the agent. This is in my opinion would work against your best interest
3.Put your self in the independent agents shoes and do what is right.
best regards,
jay odom
Let\’s face it. Not every customer wants to deal with an agent or even call a company for that matter. I hope all remember it is customers that build a company not any single branch, department or distribution system.
Customers want to do business their way and that must be respected by all. Frankly, I don\’t see that the effort will be cost effective for Safeco, but have at it.
I would strongly advise that Safeco not forget who they are and what has proven itself in the past.
Best of luck.
They had a phone conference on the 28th of March with agents releasing this news. A lot of people were rather upset. (screaming ensued)
What I don\’t get is how they think they can compete with Geico and Progressive. Those companies spend hundreds of millions on advertising in lieu of commission to agents. I doubt Safeco has the capital to compete on advertising.
They should look at the largest writer of home and auto business in the country, State Farm. Small, relation ship driven agencies. Now that\’s the model they should be adopting.
Oh on a side note Safeco did say in the phone conference the price of auto insurance would be the same online as through an agent TO START WITH. However it would be subject to change depending on the profitability. So it\’s a real possibility that Safeco will be competing for your Safeco book in the future.
THIS DOES NOT SUPRISE ME.WE INDEPENDENT AGENTS HAVE BEEN THERE GUIENA PIGS. WOULD THEY LOOK AT IT DIFFERENTLY OR TAKE NOTICE FOR INSTANCE, IF ALL THE SAFECO AGENTS SELECT A COUPLE DESIGNATED MOS AND DID NOT SEND THEM ONE NEW PIECE OF BUISNESS. THEN THE FOLLOWING 2 MONTHS START TRANSFERING EXISTING BUISNESS AWAY FROM THEM. THE AGENTS BY DOING THIS COULD PUT THEM OUT OF BUSINESS.OH I FORGOT, WE INDEPENDENT AGENTS CANNOT DO AS A LABOR UNION DOES.WE JUST HAVE TO SIT HERE AND LET THEM PUT US OUT OF BUSINESS.I ALSO HEARD NEW PRES. REYNOLDS IS REDUCING WORK FORCE BY 25% AND GOING TO OUTSOURCE THE IT WORK.
Frankly, I\’m a bit less emotional than I thought I would be. I\’ve been waiting for this call from Safeco for sometime. Seems they have forgotten who brought them to the dance.
Now for the good news. There are other companies out there interested in my Safeco book. I suppose the waite and see time may be over with this outfit.
Saving money? How? By hiring more CSU people to handle the internet business they write? By not having a true home office and renting space? Really, how long will they operate? Or do they want to get rid of this business, just like mobilehomeowner policies, changing the life insurance to Symetra? Is this the next book of business to go?
Time will tell if it\’s a mis-step or not. I really don\’t know. State Farm is a captive, direct market and they do fine. I don\’t think Safeco\’s plan is to be a State Farm. I also don\’t think they are going into something lightly. Far be it for me to think I know more about this than their analysts do.
I honestly don\’t believe Safeco will pay a ton of money for the marketing a direct approach will take. If they do any marketing, it could potentially benefit us more than them. In essence, it will not be enough to build their \”direct\” book, but it will get the brand awareness we have been asking for. I will take a wait and see approach to this rather than a knee-jerk response. I can\’t predict futures and I don\’t catastrophize based on company decisions. It isn\’t good business.
Mercury with 1980s policy change procedures, an underwriting \”interview\” where information is miscontrued, exclusions of 5 year old children who are \”great risks\” in the household, and claims staff that gets trained on how to deny a claim instead of investigating? Yeah, you take that 20% commission and watch the customer go down the street.
Before anyone \’moves a book \’ keep in mind, Safeco is the last national carrier to sell direct. Hartford has AARP, Travelers sells direct online (Geico is also their largest indep agent), AIG Direct, Unitrin Direct, and Progressive. There is a group drivers mostly younger that prefer to do business through the internet that would most likely never step foot in our offices and shop at every renewal so personally, they can have them. They don\’t have 300 million to advertise so anything they do would be very minimal.
I\’m not moving anything anywhere. Other carriers can come in begging me for my business. I\’ll ask them where their direct market is. As the last guy said- they all have them. I\’m not that naive to buy into their ploys. I\’m a smart business person and will watch my book with all carriers. My eggs don\’t go to one basket, so this little \”direct\” thing doesn\’t get my pants in a bind.
First, if you do not choose to participate in Safeco\’s conference phone calls, don\’t complain if you\’ve missed the latest information. Next, I have had the opportunity to meet the man who Safeco put in charge of this task. He said that their plan (and yes, plans can change)to go after only the segment of the population who would never darken our doorways and own only a car. They are mostly under 29 years old and single. (Unless you are a non-standard agency, why are you fighting over these folks?) If they come in through our websites, they will still be our clients, period. If they come in through Safeco, the first button will remain \”choose and agent\”. AND unlike ANY of the others, if they do come in to seek our help, we can move them to our agency with an agent of record letter, help them and retain them as ours. Also, as these folks grow up and mature, needing a house and umbrella, they will funnel them back to the agents.
I just don\’t think this is such a rotten deal. Safeco has always been a good company and I cannot imagine moving my book anywhere else.
Like Beth, I am an intelligent person who knows how to keep my business and grow it. A little change in one company will not hurt my business. I believe in the long run, it will help it.
It\’s not what they are doing that\’s upsetting the the agent corp nearly so much as the way they go about it. I\’m sure we would all argee that most of our carriers are seeking ways to deliver the product without us. It\’s up to us as agents to understand the biz landscape.
HOWEVER! I find it disingenuos for Safeco to tell me. Our plan is to compete with you and you will Like it. quote: This will be good for you, This will help us all. As one agent said during the conference call Q/A Time. \”So much for partnering\”.
Safeco has a couple of ways to kill this bad blood issue thats brewing. Either rename your on line Co. like progessive did with splitting off DRIVE or go for it on line and asign agents at a reduced commission.
Did agents really benefit when Progressive gave agents Drive? I think we would have been better off sharing in those advertising $$. And they also gave us different rates than what was available from them directly. Everybody is shopping online these days, our advantage is building relationships with our clients and advising them correctly.
Safeco has such a weak marketing program as it is, I can only wonder what they are thinking in trying to launch another means of distribution.
In the short run, if they spend millions and millions to build the brand on both sides, direct and independent, it could help the independents.
However, on the long run if they do strengthen the brand and then jerk it away like Progressive did, the independents are once again on the short end of the stick.
With either scenario, it would be nice if Safeco did a better job communicating with their agents. Progressive eroded alot of goodwill with their branding fiasco. Hope Safeco doesn\’t fall prey to the same fate.
After all those years saying they would never do such a thing. Well I\’ll just stick to Mercury and my 20% commission and lower rates. Safeco, good luck, I\’ll continue to give you 10% of my business. It\’s so simple, you can do exactly as you plan and not cut the ind. agent out, like someone else said, just send the business to us at a reduced commission, the customer would still do business over the internet and you wouldn\’t piss the agents off, my costs would be lower because of the reduced expense to market and do the data input. Safeco and the market are changing and our agency has profited greatly from the internet…why not just be partners through the internet. It\’s your company, do as you see fit…just don\’t tell us for as long as you have been in business that you would never do business w/o the agent and you would NEVER compete against the agent…well it looks to me that that is exactly what your doing..good luck. Our relationship has been going down hill for the last 10 years with Safeco….this will just help it go down a little further.
What kills me is the fact that people are replying with \”But Safeco said they are only going to go after xyz customers who wouldn\’t shop from agents anyway\”…This is after they said they would never go direct……..Can we say Naive?
What cracks me up are the people stuck on the \”they said never\”!!! I have said \”I\’ll never….\” to people/my kids/my wife/my boss/etc before. Then things changed. Circumstances changed. Did I have to hold on to that \”never\” forever? Do I know everything that will happen in life and can I predict that now? Are each of you telling me you have \”never\” done that and then things happened that just made sense for yourself or your business? This is about business. It isn\’t personal. Move out of the emotional and into the business.
Beth, It\’s not about us being smart or naive. It\’s not even about Safeco saying never,over and over again. Really to me it all comes down to the silly notion that I heard time and again in the conf call. \”You\’ll like this, it will be good for your agency because it\’s good for us\”.Kind of sounds like the same stuff they fed us when they cut our pay a few years ago.
Sure all of our companies will compete with us sooner or later, NO BIG DEAL! I\’ll happily go toe to toe based on the service we provide. I would just like Safeco to cut the BS about it being good for agent.
Frankly I do not see the upside for the company either. The largest personal lines insurer in the U.S. is State Farm. The model, local agents connected to policy holders. why recreate the wheel?
I\’m sorry to say but this looks like another American States sort of mis-step.
I\’m not happy to hear they\’re going DIRECT, but some of the comments made by my brethren were way out of line. With \”loyal\” partners like this, why wouldn\’t they think \”direct\”?
I moved customers to Safeco in \’03 when the auto rates were good. I moved that same group to Travelers last year. That\’s the benefit of being independent. Remember? We can put them where we have the best price. After losing a customer of fifteen years to Progressive for SIXTY DOLLARS A YEAR, I no longer kid myself that it\’s about relationships. Those days are gone. We share the blame that it\’s all about price.
I agree with saddened agent. This is ridiculous.
Okay, so everyone wants to move their books. Where to? Travelers? They have Geico. Hartford? They have AARP. AIG? They have a direct channel. Unitrin/Kemper? They, too, have a direct channel. Allied? Oh, yeah…they are Nationwide. Encompass? Oops…they are Allstate.
So….where are you going to go? It\’s a little comical to read everyone threaten to move their books due to Safeco going direct when all of our other markets are doing it, too. Logistically it makes absolutely NO sense. But, move your book. As it has been said, customers go for price. The agent down the street will probably still sell Safeco and I hope it will be me taking your business from you. After all, if you are not looking out for the best interest of your clients and are only \”getting even\” with a carrier out of spite- it will catch up with you eventually. If it hasn\’t yet- consider yourself lucky….for now.
Another Progressive move. How pathetic.
Since all of their business is produced by the \”middlmen\”, why don\’t we middlemen move our books and put a run on that bank!
This is what happens when you combine a GEICO/Progressive mindset of the COO with a former energy company CEO. They are looking at Berkshire Hathaway and want to be GEICO – a mono-line carrier that raids a portion of a persons financial security portfolio, and leaves the rest to go find a home. Safeco has turned into a peddler\’s company hocking policies as if they were housewares.
Allstate did this exact thing 5 years ago. Their program allows a person who doesn\’t want to talk to an agent, to buy Allstate Auto over the internet. They are then handed to an agent who receives 3% commission on the account. The agent then has the ability to cross sell the customer (home owners, life, umbrella etc.) If they cross sell the account the commission on the auto goes to 7%, they receive regular commission on what they sell. It has worked sparingly. Most people buying insurance on the internet are substandard. They keep their policy for 6 months and move elsewhere. Not your best customers. I wouldn\’t worry about it. Allstate agents went nuts when it happened, and it was much ado about nothing.
Well, let\’s see…94% retention, I\’m not sure what street your talking about, but my customers aint going there. The agent makes a difference…and all those exclusions and other rules you mention, well, you just don\’t get it do ya…my profit on my Mercury book is triple what it is on any other company we represent and I\’ve got em all. Bottom line, it sounds like you just don\’t get it. The Mercury agents I know have agencies that are worth double what a agency w/o Mercury is worth. I\’m whining all the way to the bank. Also, with a good agency mgt. system and good internal rules and Mercury is just as easy to do business with as any other company.
I knew over ten years ago when I moved over a million dollar book away from Safeco that they had internal problems. I have now watched them over the last ten years as they have reduced commissions, not commparitively improved on their customer service and agency service, not become competitive in our market, and have noticed that they still don\’t really listen to their agency force. If Safeco adds to their distribution system without making the agents a vital part of their new distribution system, you wil have to ask yourselves if they are a company you want to continue to build your future around.I do not regret the decision I made over ten years ago.
I think it was back in the late 80\’s…Safeco tried something called DIRECT RESPONSE, as I recall, through a tie-in with First Interstate Bank…it flopped and they lost agents, too.
I\’m insured with Safeco. My wife hit a coyote recently and they wasted 11 days before *authorizing* a $2500 repair… great business practice with a $50/day rental car cov. tab. I\’ve been a Safeco agt. since the 60\’s…and their brilliance is best demonstrated by the American States M&A…what\’s a loss of a couple $$$ Billion?? (A disaster caused by beancounters & marketers trying to design contractor\’s liability programs… not underwriters.) Too bad John Phelan retired.
Also, I wouldn\’t malign Mercury if you haven\’t been there. George Joseph is the most Ind. Agt. minded CEO I\’ve known since I started in the 50\’s.
This new Safeco bunch are strictly marketing oriented non-insurance people. I predict they will implode just like almost every other industry that disavows its established marketing base. My Safeco book is 10% of my Mercury book, and I\’ve been a Safeco agent longer. I\’m insured with Safeco until the Mercury HO program\’s coverages and underwriting limits mature closer to my situation. I asked Mcwhatshisname in an open Regional meeting if they were considering Mercury\’s reduced limits endorsement on parent\’s auto policies for new youthful drivers with no assets. (A no-brainer in the right conditions.) He assured me that they were looking into such things that have made Mercury an auto underwriting icon. Looks like the answer is a new computer program.
They want to be the next Progressive. Stay tuned for the m/cycle ta-do on the 14th.
IMHO the marketing solution is do it just like Mercury already is doing. Create a broad scale marketing program… establish a referral procedure…make the agents pay their fair share.
Sorry for the length…
SAFECO, State Farm, Allstate, and others, all started with an idea that succeeded, and all a little different. The most successful grew on person to person contact and quality product with the consumer primary. — Does the key board breath?
jn
I find automation expert to be right on the money. Unfortunately.
As an underwriter at a Safeco competitor (we actually heard this news about Safeco early last week) I find my job in serious peril as more automation comes into play. I am already no longer needed for underwriting our auto product at a policy level; each risk prices itself. My job relies on the homeowners product continuing to remain a bit trickier to meet eligibility at an adequate premium while maintaining acceptable loss ratios. But I expect with time, this will also be highly automated and the only one left standing will be the actuary to fix the product pricing as a whole.
You think Mercury is better with claims than Safeco? That\’s laughable. Mercury\’s claim adjusters are morons, and they take forever to issue and endorsement. They\’re a pain to deal with and there is too much back end work after the policy is written. I wouldn\’t write anything with them. They might be ok in CA, but they\’re terrible in Texas. Their billing plans are bad, customer service is bad, and underwriting is a pain and unflexable.
Travelers spent $150,000,000 putting together a website that sold a lousy 400 policies. Safeco has the so-called \”Virtual Producer\” which has been a big flop. Now they want to continue the VP but service it themselves. We are a VP and all we get out of it is junk customers.
To all you peddlers that hock primarily auto policies for a living, these types of moves are your fault. Live by the price, die by the price. You\’ve trained the public to believe a good price equals good insurance. That\’s dumb.
Finally, the sale of the home office should make every Safeco agent wonder what sort of behind the scenes due diligence is being performed. I smell a sold company.
We beg for a reduction in rates or better commissions from the company for years. So when the CEO makes a wise business decision to obtain space at $25 a square ft rather than $50 or to take advantage of employees telecommuting, we all jump to conclusions and scream the company is for sale. Take a look at the big picture, Safeco\’s expenses are out of line with some of the top dogs in the industry by a couple hundred million and real estate is the one of the more costly and easier expenses to change. They pulled themselves out from the Amer States fiasco and got their expenses back to avg but to really succeed they\’ll need to tighten the belt even more. Quit jumping to conclusions and being so narrow minded.
Hey, Wise up.
Who got them into the Amer states fiasco they had to pull themselves out of?
Answer: Back office smart people, number crunchers who often misjudge real world dinamics. My market savie says they\’re up for sale shortly. But even at that it\’s no time to panic.
Listen up auto-policy sales people. You pick up a ringing phone, identify car type, type the data into your computer, quote insurance, and if it converts, you add the customer to your book. What are you making? $100,000 per year? Even McDonalds is starting to use call centers to take orders from the drive through. You don\’t even know that when you order a Big Mac you\’re possibly talking to someone in North Dakota.
When policy makers go it\’ll be higher tech that does it. There are voice automated systems currently in use by other industries that could do parts of your job with about a 95% success rate. We\’re talking no human involvement. Called UPS lately? You can track, change address, do all kinds of things without even talking to a human. No push buttons, just pure clean technology in action.
You cost too much.
Eliminate 10,000 of you and the parent company saves a $billion a year. Loyalty is to the shareholdsrs, not the wage earners.
Open your eyes.
No problem. When the average insured reads past the name and address of their dec page and your automated systems know how to awnser coverage questions then i\’d be happy to let my staff go and put these systems in place…..Oh wait, that will never happen. Long live the independent agent.
Oh and companies that operate on loyalty to share holders fail eventualy. It\’s the companies that operate on loyalty to \”Stake Holders\” that succeed.
Automation expert?…let me guess. You designed american states \”com-line\” (shudder).
Return to your cubicle and patch my agency management software.
Automation expert.
More proof that my earlier comment is on the mark. \”Back office smart people, number crunchers and now add to that AUTOMATION EXPERTS often mis-judge the real world dynamics involved in delivering product to the market place.
I did enjoy your comment,it was a quick read that made me chuckle.
Oh yes, you are so right Mr. Independant agent.
Crazy talk. Paper will never fly through the air, waaay too complicated, Oh wait. FAX MACHINE.
Every executive needs a secretary, Oh Wait, answering systems and PC\’s.
Every aeroplane trip is sooo complicated we need a travel agent for every little thing, Oh wait, Orbitz.
We will always need cashiers at the supermarket, Oh wait, AUTOMATED CHECKOUT SYSTEMS.
You are well paid so think you earn it. But believe me, you reduce it to the minimum number of questions possible and produce a quote based on the customers answers. Do you really think that would be so difficult to program?
Voice synthesis and speech recognition are here. All that’s left is the logic. You could quote me car insurance with less than ten questions because you’re good at your job. And over 90% of your car policies are probably created the same way. Sure, you can come up with exceptions, and one by one a good programmer can knock them down. But even if I can only automate 90% of the calls, what does that leave you with?
All my above examples have relevance to your industry. Pay attention!
As for answering to the shareholder, companies exist for two reasons only, self sustain and profit. If they can increase competitive edge, or increase profit by cutting you out, believe me, they will. The only company that exists for your personal gain is your own.
Yes, automation expert. I work for, and write software for, and am a shareholder in a company that creates automated checkout systems for a few little chain stores. You may have heard of Walmart, Safeway, Albertsons, and Home depot. By the way, our business is up 1,900 % over the last three years, how are you growing? Next we\’re moving into voice.
Listen, you can ignore it if you want. Write me off as a kook or whatever but we’re in an expanding business and we’re aggressively looking for the low hanging fruit. Right now the insurance business appears quite profitable and very do-able. Dazzle me with all your coverage questions, I’ll need them for our Database.
Wow. That was a great reply. Too bad it has nothing to do with insurance. That works great for selling Twinkies, the latest widget or an airline ticket.
Let me equate it to something that might be closer to your field. The average (95%+) consumer doesn\’t know how to, or even want to write a program to run on their computer. Guess what? Insurance is much the same way. It is an extremely complex and dynamic product which the average consumer couldn\’t care less about.
That\’s why we see many people give the direct writers a chance and then come back to an agent in 6 months with polices written at 25/50/10 when they own a $500,000 home and have a lot of assets. But guess what they just saved 15% or more on their car insurance!
They didn\’t get the policy or coverage they NEEDED from the online wholesalers. Sure you can say \”Well that\’s what the customer wanted\” but that\’s what separates a good insurance agent from a phone jockey, or burn and churn website.
Which brings us back to the whole gist of this article. Safeco used to have the mindset of the agent being THE partner in selling, servicing, explaining insurance to the buying public.
Now it looks like they will be treating the product more like a box of Twinkies instead of the 100+ page legal contract that most auto policies are.
Now I must go. I\’ve got to code a c++ program that auto posts my reply to this thread because it\’s just so easy to do. Why pay a programer?
Gherie
Cherie,
Thanks for that honest but difficult response.I also believe this is the way things are going and that everyone in the industry will have to recreate themselves to some degree in order to survive the changes. Again my main difficulty with Safeco is them telling us, \”you\’ll like it, \”it will be good for your agency\” WELL B/S. How do you say that sort of thing with a straight face to your so called partner.
And as for techno man automation expert fellow who kicked off this RE: RE: RE: deal, what the heck do you know about insurance. Have you been a Safeco agent from the dawn of time like some of us. I think not! Are you versed in legal contract verbage, I bet you don\’t even know if your health plan is gauranteed renewable or non-cancellable. It\’s all the same until you have a claim. SO go be your own agent see how it works out for you.
In response to BadJuJu, here\’s what I know about insurance, I have some. Quite a lot actually. I let my agent tell me what I need, I trust him to do the homework, and I pay my bills. On the rare occasions I have had a claim I trust him to handle it professionally and accurately. I like the guy, and he makes a lot of money, mostly because he’s good at what he does and he has a pretty big book.
Here’s what else I know, automation will not work for everything. It won’t sell clothes in a high-end boutique; it won’t diagnose a patient based on symptoms, it won’t cook a meal, and it won’t write a complex home owners policy. So if that makes you feel good, it won’t happen. Feel safe now? Don’t.
All the arguments (or Denials) posted here quickly reach for exceptions that are currently difficult or impossible to automate, and cling to them like some kind of proof that no part of it will ever happen. Let me tell you something. We don’t want to handle that stuff. You’re right, it’s too damn complex. What we to go after is the easy stuff. There are tens of millions of people out there who have basic auto policies and nothing more. Any one of you could knock one of these out in your sleep. Those are the ones that’ll go first. It’s an easy foot in the door and won’t break any agency.
But think about my agent, who I started with on simple auto and renters policies, I grew with him. Now he covers my cars, houses, boats, life, etc. What happens when customers start working with a “system” rather than an “agent”? When do you get them? Will you be able to pry them away from the system? Or will the parent company open a call center with dozens or hundreds of call agents who can answer the more complex questions, especially when prompted by superior software.
Don’t kid yourselves, just because a automated system can’t stock the shelves and bag the groceries, that doesn’t mean it cant sell the groceries. Just because it can’t write a complex homeowners policy with second vacation home and part time rental situation, it doesn’t mean it can’t write a simple auto policy.
Frankly, costs of automation have come down so far that it may even begin at your (the agent) level. Some of you have small shops with a couple junior agents on staff to write auto policies. Their primary qualification is whatever training you’ve provided and the ability to fog a mirror. What if you could replace them with a machine that wrote comparable numbers of policies but only cost $20,000 to $30,000 to install and a few hundred a month to maintain? Are your juniors making more than $35,000 a year right now? Of course they are. So something like this could be a money machine. It costs less for full page Yellow Page ads and flooding the airwaves with your phone number then it does to pay the overhead on these agents. It also has a better chance of keeping the customer on your book as they mature into bigger and more complex policies.
So even if the parent company doesn’t try automation, Your competition might.
Listen, embrace this stuff or not. ATM’s didn’t eliminate tellers, but without ATM’s there’d be a hell of a lot more bank tellers today. Automation will not eliminate Insurance Agents, but with automation we may need a hell of a lot fewer agents in the future.
Embrace this stuff or not, but don’t bury your head in the sand and deny it’ll come. That’s just foolish and arrogant.
You raise a valid point about Mercury\’s \”back end work\”. It is what keeps them one of the more profitable higher commission paying auto carriers in the biz. That complete info gets the right premium for the risk. Had you been an underwriter for 10 years, you might better appreciate the necessity of full disclosure. Had you been a Mercury agent for 35 years you might enjoy the benefits of some of the lowest rates at the highest commissions (Merc app discloses that comm/continency avgs. 17.1% on auto in CA.)
We wrote a 1 pt. Geico risk yesterday that was being billed $1350/6 mos. for $505/6 mos. in Mercury…covgs almost identical! We ask about 8-10 underwriting questions, not name address, veh info, limits, etc., but hard ball underwriting questions before we quote Mercury. If you think that the way the questions are answered, the attitude of the caller and the caller\’s evasiveness have nothing to do with placement…you are in the wrong biz. That sense cannot be built into a check box automated program, either. This is a detail oriented career, and if dotting \”i\’s\” is not your thing, neither is being a Mercury agent. Many call…few are chosen. The chosen have little of your petty concerns at the annual October meeting where $$$ millions of profit-sharing checks are distributed. And with over 3000 Merc accounts I can tell you their claims service is no worse than Safeco\’s. I personally handle every claims complaint for 2 offices…about 1 every 3 months. Most all are 1st ever claims where a close friend is their claims advisor. In the past 4+ years we have taken 10,000 pictures of veh. without immediate prior cov. That means \”0\” pre-existing damage, modified vehicles, etc. snuck by us to Mercury\’s detriment. You sound like an order taker…not an insurance professional dedicated to providing the best coverage at the proper premium in a reputable carrier dedicated to protecting your clients…or a case of sour grapes because you didn\’t make the Mercury team.
You could not have said it better. I\’ve been doing this for 25yr\’s and no other company has figured it out like Mercury. Safeco Exec\’s…are you listening???I doubt it, I don\’t think they have ever really listened to their agents. I\’ll take my 20% commission and 94% retention all day long compared to the same retention figures with Safeco at 10% commission…Mark, just so you understand, that\’s not 10% less or 10 pt\’s less…that\’s half or 50% less commission and I\’ll bet we only do abount 15% more work for Mercury…U do the numbers…the few the proud, the Mercury agent. But hey what do we Mercury agents know…we only get paid double of what Safeco pays us..man are we stupid.
Mercury Ins. Co. sounds interesting. Still though, how do you think Safeco will fare through these changes. I\’m not convinced that the fortune they are seeking is within their grasp.
I am certain of one thing with Safeco, it has all been very well planed out. I\’m sure they rehearst the conf. call acrimony before hand and are even monitoring these sites.
If so, all I have to say is Bla, Bla, Bla, because they never have been very good at listing to us agents anyway.
Safeco\’s all abuzz about consolidation and re-thinking core processes, selling direct and being lean and mean.
Why don\’t they learn from their mistakes of years past of closing offices only to re-open them when they realize their mistake?