I’m not defending Progressive’s business model, but my CSR’s tell me their software is extremely easy to use. That’s a big plus in any agent’s office. I only wish some of the other independent agent companies could get this accomplished.
It’s a great concept, it is very efficient, and it saves money. While it may save some trees, that is not the primarly reason for going paperless. Saving money and efficienty is the reason and it is a very good reason.
I don’t think I’m ready to concede that Progressive’s motivation is to become a “green” company – seen all those SUVs running around? With Progressive everything is about the bottom line (as well as it should be in a capitalistic society) – whether it is a “free” promotional piece on the appearance of being tree huggers or the appearance of coddling to the PITA aligned people by providing medical coverage for dogs on auto policies (they’ve probably found a connection with dog ownership and lower claim’s cost)
Ultimately, I think they want to cut out the agent. They hope to reduce their commission cost and save a few dollars. Unfortunately, without agents I think they will find that the mistake their policy holders make will cost them more money in the end.
Peter Lewis, the founder of Progressive Insurance has funded radical liberal groups. This is typical of limosine liberals, it’s okay for them to be capitalist (and eliminate agents and employees to make more money), but how dare anyone else try this thing called “capitalism.” Progressive policies in my opinion are watered down forms that are far from the rich insurance clauses that liberal demand. Sadly, the true liberals who have nothing to their names are fools to the elite left!
What’s the correlation between Progessive going “paperless” and their distribution strategy? Yes, it’s probably true that this article is more about a little positive press and lowering costs than it is saving trees.
Progressive doesn’t want to eliminate agents and anyone who thinks so doesn’t understand product distribution. Progressive’s strategy is extremely simple: appoint more agents than any other carrier, pay the lowest commission that the “agent market” will tolerate, and sell their product in every other availaible channel(phone & internet). Why get rid of agents at the commission rate they pay. They don’t have to value agents to make them part of their business plan.
Ray It’s great your CSR thinks the software is so easy but is it worth a 33% revenue cut (10 Vs 15% on average)? As a former marketing rep it was frustrating to find a half a million dollar Progressive book generating $50,000 in annual income rather than the $75,000 (not including our superior profit sharing plan) they could have received from my company – all because the CSR,not the Agency owner, was making the decision to do business with a personal lines company that competes against them.
‘YOU LAST TWO GUYS DON’T GET IT. YOU MUST BE STUCK IN REVERSE. OPEN YOU EYES TO TODAY’S COMMERCE AND THE UPCOMING GENERATIONS.’
For you concerned, please stick to the computer and the back of matchbooks for interacting with clients. Although I gave you the key, personal service, you don’t seem to be able to comprehend it. And if you cannot understand it, don’t even try it. Your only chance at a livlihood it to SEPARATE YOURSELF from clients and cater to the 50% who identify with your brand of customer service, which is to say no customer service. You obviously do not know where the money is.
Get with the curve. People have tried to achieve understanding of these complicated contracts over the phone, online and from the backs of matchbooks and have come full circle back to those who can effectively teach it. At least, the clients I want have that mindset. The ones who only shop lowest premium, switch every year, don’t follow my advice and then, are you ready CONCERNED, bellyache when things don’t go the way they thought it would because they didnt listen or read the policy? I help them find another company. Not only do I refuse to write them, I won’t subject my staff to them nor any other agent with my company. Concerned, you will never understand, will you? QUALITY NEVER GOES OUT OF STYLE.
The future IS paperless… How many of you opt to receive your phone bill, cable bill, electronic bank & credit card statements and just about every other bill via email? And then pay them using some form of electronic funds transfers? I think the only thing I get via snail-mail is junk mail and credit card offers (but I get those electronically too).
This industry is struggling to keep up with technology and technology touches everything from marketing, distribution, underwriting, claims etc. Improved technology is all about reducing costs and improving service, and when it comes to the customer (be it your agent or your insured) ease of doing business and instant gratification are the key in today’s society. So maybe they are saving a few trees and taking advantage of a little free press, but it seems they see the future and are ahead of the curve on this one.
How many of your new business client’s think waiting weeks to get their policy in the mail superior service? Maybe some of you are whining about Progressive new paperless world because you’re sorry you didn’t think of it first? I frankly don’t see a down side.
Blondie – thank you. Your comments are the most intelligent and on point I have read here. You obviously “get it”. The upcomig generations are technology savvy and still too many companies don’t get it. Also – the need for “agent” interaction in insurance sales and service is declining.
Trust me, my CSR’s are well aware of commission rates and how overhead gets paid. They have communicated to other company reps many times re: how fast a Progressive quote can be done. It’s a balance between CSR time spent quoting and servicing an account and gross commission to the agency. The frustrating part of the situation is that some carriers NEVER seem to understand the importance of user-friendly automation!
I guess one could pose an interesting question. How much of the gross commission paid by a carrier channels its way to net profit, and how much is wasted dealing with cumbersome software and service problems?
The abolition of the face to face agent is self fulfilling. The more an agent buys into it, the less value he has to his client, and presto the client may as well buy it from someone who doesnt care about them over the phone rather than someone who doesnt care about them in person. The more my company goes away from agents as a part of the equation, the more we insert ourselves into the equation directly with clients. We will have called every household we insure this year and offer them a review. We will do this every year. Every existing client who does come in appreciates it. Don’t believe this crap about agents not having a place – clients say otherwise.
And I think clients are OK with waiting 10 to 14 days to receive and not read their policy, opposed to getting it in real time and not reading it. After all, they don’t read it anyway.
I agree with you Gill. Ultimately, this industry is all about service. If you cut out service, either agency or company, then you don’t even really have a product. Anything attempting to do so is a short term strategy in a difficult market.
Say Blondie, here’s an easy question. How many people have a computer and access it regularly? (less than 35%) Yes there are a lot of people who will want an on-line policy. But for most, after the novelty of the PC wears off people get tired of it or of paying for the high speed connection or just get burned out. As the saying goes many computers eventually become “the most expensive deck of cards I’ve ever owned”. – put me in the burnout category. I work with a computer all day and when I come home in the evening I want to pickup a book, printed on paper, and relax and I’m sorry but I don’t care how many trees gave their lives so I could do this. (Living in Iowa I think most people around here still think of trees as a renewable resource and a source of employment;-)
Note to Gill: The learning curve with some companies may be higher than others but for the majority, once you learn their systems, they are no longer as difficult as they were 10 years ago. I think the majority of CSRs get frustrated early and go back to what they know will be easy. Take away the “P” option and I think you’ll be surprised at how “user friendly” the other systems become.
So your are saying that automating this industry and cutting out the only knowledgeable advisers involved in the process is not going to become a problem for the insured’s?
I have a great idea! We can scan policy pages to pdf format and offer downloads directly from the Agency. Then, when our clients get bored – say, waiting for a delayed flight – they can go online and read their policies.
Stop shouting concerned. You think it’s ok to cut out expertise and advice. We aren’t selling shirts or peaches. This is a product that requires a little explanation. Didn’t all the problems with coverage and forms after Katrina and other hurricanes make any impact on you? This is a complicated product that’s best handled as a complicated product, not just some commodity to sell at the lowest price.
Oh yes, by the way, I think paperless is great. My company is part paperless and is headed further in that direction. We just aren’t selling cut trees, we are selling product and our expertise.
As a former marketing rep, I have visited many, many agents both independents and captives. I think the 80/20 rule applies here too. In 80% of those offices, CSR’s were quoting insurance by phone and in person. Talk to them. There are a few questions asked by policyholders, but very little advise and counsel on this complicated product is going on. It is simple questions about coverage and then it always goes back to price and deductibe. The majority of this can be handled electronically. I do not advocate getting rid of agents. Good ones are rare(that 20%). But future generations are not going to drive to an agents office. They will shop on line. Open your eyes.
I’m an old codger..35yrs in the business. However, I’m not so old that I can’t remember all the sweeping change that this industry was going to embrace over the years and how it would “change” things. Funny thing is, the really important stuff is essentially the same. HOW we communicate with customers is not nearly as important as what we have to say and when we say it. An agent who made a lot of money in the ’70’s, working in a paper environment will also make money using the latest electronics. Its NOT the media…it is the message.
Almost from Day 1 as a trainee with BEIC (Big Eastern Insurance Company)the death knell of the independent agency system has been sounded. Funny thing, good agents improvise, adapt and overcome (credit to Gunny Highway/Heartbreak Ridge). You guys/gals are still here and still an integral part of the insuring process. Despite what some of our younger, brighter cohorts have posted……the insuring world will never shift entirely to web based buying centers. Why??? Because most purchasers of insurance will ALWAYS need professional guidance that NO web site can deliver. Its the expertise of a good agent that is required….no electronic system can replace that. Electronics can only serve as a distribution method.
Example- 23yr old grad student(my daughter); living away from family for first time; highly computer/electronic literate decides she needs renters insurance (her Dad has drilled this into her head). With all the power of Dell, the Internet and various web sites she finds it necessary to consult with her uncle, the Insurance Man. Her needs were not met by the web.
Result= all her questions are answered; the right insurance is in place and she is now bringing her friends to Uncle Insurance so they can buy insurance for their apartments and autos. So much for the Independent Agent being replaced by a machine. BTW….Daugther and Uncle “talk” by email and IM all the time. Adapt and overcome…………..
1. The founder is a left wing nut who values raising the minimum wage so much that he can’t pay anyone a decent commission.
2. Paper is really used more so to reduce expenses, bring efficiency and less so to save trees unlike the article and progressive presents it as
3. They have a user friendly system
4. Progressive corporation practices every rule of extreme capitalism, yet their hypocrite founder vouchers for socialism (I guess he want to be the master franchisee of all socialist activity)!
As a 21 year old insurance-purchaser, technology extraordinaire, and licensed p/c agent, I completely agree with you, Rick. Today’s market place is streamlined USING technology, not overhauled by it. It seems people are threatened by some hostile computer takeover that is just not going to happen. Instead of resisting it, agents can USE technology to their advantage. People are generally smart enough to know that a computer cannot infer their personal insurance needs. Aren’t those the customers who most agents would like to target for business anyway? If all the unloyal timewasters who hop from agent-to-agent and company-to-company take their business online, doesn’t that free up more time to spend on quality prospective clients?
Good point Becky. I don’t think any of us are implying a hostile computer take over, but I don’t think some of us appreciate companies attempting to do so. I think that all of you have valid points and I would like to say that you are quite an intelligent group of individuals. Computers definitely have a lot of value in the insurance industry and they have, and will continue, to revolutionize it. Thanks to many of your comments, I am not worried that they will take over for people like some horrible sci-fi movie but will just help everyone in the market. I hope the fusion of brains and technology will evolve the new generations of agents to continue to compete with the idea of total automation.
Bob has a good point. A substantial segment of our customer base works with computers at their job/profession all day at the office. When they get home, the last thing they want to do is work with their PC. I didn’t fully realize this until I was helping to organize our high school reunion. We were relying on email to relay information only to find out that many classmates don’t look at their personal email very often.
As agents we must also provide value to our customers. My CSRs are trained to use everyday comparisons such as grocery store shopping when providing quotes – i.e. If you knew that you could get a 2 liter drink for only 5 cents more than a 1 liter would agree that is certainly a better value. True, you save $1 a month with $25K limits when compared to $50K limits but, you save $25K when you have an accident with $50K limits – which is the better value. We also use examples of customers that are paying judgements because they didn’t have enough insurance when they had a bad accident. Our best example is a customer that is a computer programer that bought his insurance online. He is now paying $210 a month to the court for the excess damages over and above his low policy limits from the online policy he purchased. We sell value – not price. If the customer is an idiot and just wants price then, we will write them but, don’t spend lots of time providing them service. If the customer appreciates the value we bring to them then, we provide great service and in return get a loyal customer that also provides referrals. My retention ratio has consistently been over 95% over my 28 years in the business and right now stands at about $97.5%. Unless someone dies or moves out of state we just don’t lose many customers to price. Neither does the delivery method of the policy from the carrier effective our relationship to our customers.
Progressive is providing us valuable services that makes our jobs easier. Progessive isn’t alone but, they do a better job of relaying their message to agents and the public.
Its very much cost effective and efficient solution reacting to changing demographics and step forward to tomorrow’s market demand-dynamics. Unlike Baby-boomers, Millenial / GenY prefers internet shopping, paperless operations because they are raised in world dominated by technology and instant gratification.
Insurance market is simply reacting to changing demographics. If that is what GenY wants, all the other insurer will have to transform to ‘e-Policy’ in coming year(s).
Shrinivas, you are correct – I agree! As insurance professionals we must either provide value to customers/prospects or they may seek to purchase their insurance directly with the carrier via the internet. I have a substantial and growing number of customers that are computer technicans – both basic and advanced levels. Many of these formerly had their insurance via internet sales but, have since allowed my agency to handle their insurance because I show that I provide value. The more computer intelligent customers are the easiest to show value as their degree of intelligence results in appreciation of my staff providing them with accurate explanations of coverages and examples how their situation compares – exceeding any advise they can obtain online. We are also already aware of which carriers provide the best rates for their situation – we shop for them. It is the computer shopper of average intelligence that is the biggest challenge. They buy a policy online that doesn’t provide them the same high level of protection they had with my agency. We end up getting their business back in the long run – after they have had a claim that wasn’t adequately covered with their online carrier but, would have been with the policy they had with my agency.
In Texas, Progressive’s rates with agent written policies are the same as online rates. We should be having our annual agent’s meeting in this area (Dallas, Texas) next month. One of Progressive’s chief actuaries is always one of the keynote speakers. Fact is that Progressive has a better profit margin with agent placed policies. Why – simple! One, it cost more to staff and maintain a large building of CSRs that it does to pay an agent a reasonable commission (10% in Texas). Second, most carriers experience higher percentages of fraud claims with online customers because they insure cars without ever seeing them.
I got away from the main subject which is Changing Demographics. Bottom line is that any agency or business can change their marketing strategy to coincide with demographic changes. The key term is to “provide value to your customers”.
I’m not defending Progressive’s business model, but my CSR’s tell me their software is extremely easy to use. That’s a big plus in any agent’s office. I only wish some of the other independent agent companies could get this accomplished.
Commission? That’s another story!
It’s a great concept, it is very efficient, and it saves money. While it may save some trees, that is not the primarly reason for going paperless. Saving money and efficienty is the reason and it is a very good reason.
you don’t say?
resource. Cut one, plant three. Next subject.
What? I don’t get the last comment?
I don’t think I’m ready to concede that Progressive’s motivation is to become a “green” company – seen all those SUVs running around? With Progressive everything is about the bottom line (as well as it should be in a capitalistic society) – whether it is a “free” promotional piece on the appearance of being tree huggers or the appearance of coddling to the PITA aligned people by providing medical coverage for dogs on auto policies (they’ve probably found a connection with dog ownership and lower claim’s cost)
Ultimately, I think they want to cut out the agent. They hope to reduce their commission cost and save a few dollars. Unfortunately, without agents I think they will find that the mistake their policy holders make will cost them more money in the end.
Peter Lewis, the founder of Progressive Insurance has funded radical liberal groups. This is typical of limosine liberals, it’s okay for them to be capitalist (and eliminate agents and employees to make more money), but how dare anyone else try this thing called “capitalism.” Progressive policies in my opinion are watered down forms that are far from the rich insurance clauses that liberal demand. Sadly, the true liberals who have nothing to their names are fools to the elite left!
What’s the correlation between Progessive going “paperless” and their distribution strategy? Yes, it’s probably true that this article is more about a little positive press and lowering costs than it is saving trees.
Progressive doesn’t want to eliminate agents and anyone who thinks so doesn’t understand product distribution. Progressive’s strategy is extremely simple: appoint more agents than any other carrier, pay the lowest commission that the “agent market” will tolerate, and sell their product in every other availaible channel(phone & internet). Why get rid of agents at the commission rate they pay. They don’t have to value agents to make them part of their business plan.
Ray It’s great your CSR thinks the software is so easy but is it worth a 33% revenue cut (10 Vs 15% on average)? As a former marketing rep it was frustrating to find a half a million dollar Progressive book generating $50,000 in annual income rather than the $75,000 (not including our superior profit sharing plan) they could have received from my company – all because the CSR,not the Agency owner, was making the decision to do business with a personal lines company that competes against them.
Concerned shouted:
‘YOU LAST TWO GUYS DON’T GET IT. YOU MUST BE STUCK IN REVERSE. OPEN YOU EYES TO TODAY’S COMMERCE AND THE UPCOMING GENERATIONS.’
For you concerned, please stick to the computer and the back of matchbooks for interacting with clients. Although I gave you the key, personal service, you don’t seem to be able to comprehend it. And if you cannot understand it, don’t even try it. Your only chance at a livlihood it to SEPARATE YOURSELF from clients and cater to the 50% who identify with your brand of customer service, which is to say no customer service. You obviously do not know where the money is.
Get with the curve. People have tried to achieve understanding of these complicated contracts over the phone, online and from the backs of matchbooks and have come full circle back to those who can effectively teach it. At least, the clients I want have that mindset. The ones who only shop lowest premium, switch every year, don’t follow my advice and then, are you ready CONCERNED, bellyache when things don’t go the way they thought it would because they didnt listen or read the policy? I help them find another company. Not only do I refuse to write them, I won’t subject my staff to them nor any other agent with my company. Concerned, you will never understand, will you? QUALITY NEVER GOES OUT OF STYLE.
The future IS paperless… How many of you opt to receive your phone bill, cable bill, electronic bank & credit card statements and just about every other bill via email? And then pay them using some form of electronic funds transfers? I think the only thing I get via snail-mail is junk mail and credit card offers (but I get those electronically too).
This industry is struggling to keep up with technology and technology touches everything from marketing, distribution, underwriting, claims etc. Improved technology is all about reducing costs and improving service, and when it comes to the customer (be it your agent or your insured) ease of doing business and instant gratification are the key in today’s society. So maybe they are saving a few trees and taking advantage of a little free press, but it seems they see the future and are ahead of the curve on this one.
How many of your new business client’s think waiting weeks to get their policy in the mail superior service? Maybe some of you are whining about Progressive new paperless world because you’re sorry you didn’t think of it first? I frankly don’t see a down side.
Blondie – thank you. Your comments are the most intelligent and on point I have read here. You obviously “get it”. The upcomig generations are technology savvy and still too many companies don’t get it. Also – the need for “agent” interaction in insurance sales and service is declining.
Note to Bob –
Trust me, my CSR’s are well aware of commission rates and how overhead gets paid. They have communicated to other company reps many times re: how fast a Progressive quote can be done. It’s a balance between CSR time spent quoting and servicing an account and gross commission to the agency. The frustrating part of the situation is that some carriers NEVER seem to understand the importance of user-friendly automation!
I guess one could pose an interesting question. How much of the gross commission paid by a carrier channels its way to net profit, and how much is wasted dealing with cumbersome software and service problems?
The abolition of the face to face agent is self fulfilling. The more an agent buys into it, the less value he has to his client, and presto the client may as well buy it from someone who doesnt care about them over the phone rather than someone who doesnt care about them in person. The more my company goes away from agents as a part of the equation, the more we insert ourselves into the equation directly with clients. We will have called every household we insure this year and offer them a review. We will do this every year. Every existing client who does come in appreciates it. Don’t believe this crap about agents not having a place – clients say otherwise.
And I think clients are OK with waiting 10 to 14 days to receive and not read their policy, opposed to getting it in real time and not reading it. After all, they don’t read it anyway.
I agree with you Gill. Ultimately, this industry is all about service. If you cut out service, either agency or company, then you don’t even really have a product. Anything attempting to do so is a short term strategy in a difficult market.
YOU LAST TWO GUYS DON’T GET IT. YOU MUST BE STUCK IN REVERSE. OPEN YOU EYES TO TODAY’S COMMERCE AND THE UPCOMING GENERATIONS.
Say Blondie, here’s an easy question. How many people have a computer and access it regularly? (less than 35%) Yes there are a lot of people who will want an on-line policy. But for most, after the novelty of the PC wears off people get tired of it or of paying for the high speed connection or just get burned out. As the saying goes many computers eventually become “the most expensive deck of cards I’ve ever owned”. – put me in the burnout category. I work with a computer all day and when I come home in the evening I want to pickup a book, printed on paper, and relax and I’m sorry but I don’t care how many trees gave their lives so I could do this. (Living in Iowa I think most people around here still think of trees as a renewable resource and a source of employment;-)
Note to Gill: The learning curve with some companies may be higher than others but for the majority, once you learn their systems, they are no longer as difficult as they were 10 years ago. I think the majority of CSRs get frustrated early and go back to what they know will be easy. Take away the “P” option and I think you’ll be surprised at how “user friendly” the other systems become.
note to concerned
So your are saying that automating this industry and cutting out the only knowledgeable advisers involved in the process is not going to become a problem for the insured’s?
I have a great idea! We can scan policy pages to pdf format and offer downloads directly from the Agency. Then, when our clients get bored – say, waiting for a delayed flight – they can go online and read their policies.
Now, THAT’s customer service!
Stop shouting concerned. You think it’s ok to cut out expertise and advice. We aren’t selling shirts or peaches. This is a product that requires a little explanation. Didn’t all the problems with coverage and forms after Katrina and other hurricanes make any impact on you? This is a complicated product that’s best handled as a complicated product, not just some commodity to sell at the lowest price.
Oh yes, by the way, I think paperless is great. My company is part paperless and is headed further in that direction. We just aren’t selling cut trees, we are selling product and our expertise.
Well said “nobody important.” You hit this one right on the nose.
As a former marketing rep, I have visited many, many agents both independents and captives. I think the 80/20 rule applies here too. In 80% of those offices, CSR’s were quoting insurance by phone and in person. Talk to them. There are a few questions asked by policyholders, but very little advise and counsel on this complicated product is going on. It is simple questions about coverage and then it always goes back to price and deductibe. The majority of this can be handled electronically. I do not advocate getting rid of agents. Good ones are rare(that 20%). But future generations are not going to drive to an agents office. They will shop on line. Open your eyes.
Note to Marketing Rep –
Yep – and this was the same prediction in the early ’80’s when the Commodore 64 was hot. It’s all gonna’ be on line!
I’m an old codger..35yrs in the business. However, I’m not so old that I can’t remember all the sweeping change that this industry was going to embrace over the years and how it would “change” things. Funny thing is, the really important stuff is essentially the same. HOW we communicate with customers is not nearly as important as what we have to say and when we say it. An agent who made a lot of money in the ’70’s, working in a paper environment will also make money using the latest electronics. Its NOT the media…it is the message.
Almost from Day 1 as a trainee with BEIC (Big Eastern Insurance Company)the death knell of the independent agency system has been sounded. Funny thing, good agents improvise, adapt and overcome (credit to Gunny Highway/Heartbreak Ridge). You guys/gals are still here and still an integral part of the insuring process. Despite what some of our younger, brighter cohorts have posted……the insuring world will never shift entirely to web based buying centers. Why??? Because most purchasers of insurance will ALWAYS need professional guidance that NO web site can deliver. Its the expertise of a good agent that is required….no electronic system can replace that. Electronics can only serve as a distribution method.
Example- 23yr old grad student(my daughter); living away from family for first time; highly computer/electronic literate decides she needs renters insurance (her Dad has drilled this into her head). With all the power of Dell, the Internet and various web sites she finds it necessary to consult with her uncle, the Insurance Man. Her needs were not met by the web.
Result= all her questions are answered; the right insurance is in place and she is now bringing her friends to Uncle Insurance so they can buy insurance for their apartments and autos. So much for the Independent Agent being replaced by a machine. BTW….Daugther and Uncle “talk” by email and IM all the time. Adapt and overcome…………..
1. The founder is a left wing nut who values raising the minimum wage so much that he can’t pay anyone a decent commission.
2. Paper is really used more so to reduce expenses, bring efficiency and less so to save trees unlike the article and progressive presents it as
3. They have a user friendly system
4. Progressive corporation practices every rule of extreme capitalism, yet their hypocrite founder vouchers for socialism (I guess he want to be the master franchisee of all socialist activity)!
As a 21 year old insurance-purchaser, technology extraordinaire, and licensed p/c agent, I completely agree with you, Rick. Today’s market place is streamlined USING technology, not overhauled by it. It seems people are threatened by some hostile computer takeover that is just not going to happen. Instead of resisting it, agents can USE technology to their advantage. People are generally smart enough to know that a computer cannot infer their personal insurance needs. Aren’t those the customers who most agents would like to target for business anyway? If all the unloyal timewasters who hop from agent-to-agent and company-to-company take their business online, doesn’t that free up more time to spend on quality prospective clients?
Good point Becky. I don’t think any of us are implying a hostile computer take over, but I don’t think some of us appreciate companies attempting to do so. I think that all of you have valid points and I would like to say that you are quite an intelligent group of individuals. Computers definitely have a lot of value in the insurance industry and they have, and will continue, to revolutionize it. Thanks to many of your comments, I am not worried that they will take over for people like some horrible sci-fi movie but will just help everyone in the market. I hope the fusion of brains and technology will evolve the new generations of agents to continue to compete with the idea of total automation.
Bob has a good point. A substantial segment of our customer base works with computers at their job/profession all day at the office. When they get home, the last thing they want to do is work with their PC. I didn’t fully realize this until I was helping to organize our high school reunion. We were relying on email to relay information only to find out that many classmates don’t look at their personal email very often.
As agents we must also provide value to our customers. My CSRs are trained to use everyday comparisons such as grocery store shopping when providing quotes – i.e. If you knew that you could get a 2 liter drink for only 5 cents more than a 1 liter would agree that is certainly a better value. True, you save $1 a month with $25K limits when compared to $50K limits but, you save $25K when you have an accident with $50K limits – which is the better value. We also use examples of customers that are paying judgements because they didn’t have enough insurance when they had a bad accident. Our best example is a customer that is a computer programer that bought his insurance online. He is now paying $210 a month to the court for the excess damages over and above his low policy limits from the online policy he purchased. We sell value – not price. If the customer is an idiot and just wants price then, we will write them but, don’t spend lots of time providing them service. If the customer appreciates the value we bring to them then, we provide great service and in return get a loyal customer that also provides referrals. My retention ratio has consistently been over 95% over my 28 years in the business and right now stands at about $97.5%. Unless someone dies or moves out of state we just don’t lose many customers to price. Neither does the delivery method of the policy from the carrier effective our relationship to our customers.
Progressive is providing us valuable services that makes our jobs easier. Progessive isn’t alone but, they do a better job of relaying their message to agents and the public.
Its very much cost effective and efficient solution reacting to changing demographics and step forward to tomorrow’s market demand-dynamics. Unlike Baby-boomers, Millenial / GenY prefers internet shopping, paperless operations because they are raised in world dominated by technology and instant gratification.
Insurance market is simply reacting to changing demographics. If that is what GenY wants, all the other insurer will have to transform to ‘e-Policy’ in coming year(s).
Shrinivas, you are correct – I agree! As insurance professionals we must either provide value to customers/prospects or they may seek to purchase their insurance directly with the carrier via the internet. I have a substantial and growing number of customers that are computer technicans – both basic and advanced levels. Many of these formerly had their insurance via internet sales but, have since allowed my agency to handle their insurance because I show that I provide value. The more computer intelligent customers are the easiest to show value as their degree of intelligence results in appreciation of my staff providing them with accurate explanations of coverages and examples how their situation compares – exceeding any advise they can obtain online. We are also already aware of which carriers provide the best rates for their situation – we shop for them. It is the computer shopper of average intelligence that is the biggest challenge. They buy a policy online that doesn’t provide them the same high level of protection they had with my agency. We end up getting their business back in the long run – after they have had a claim that wasn’t adequately covered with their online carrier but, would have been with the policy they had with my agency.
In Texas, Progressive’s rates with agent written policies are the same as online rates. We should be having our annual agent’s meeting in this area (Dallas, Texas) next month. One of Progressive’s chief actuaries is always one of the keynote speakers. Fact is that Progressive has a better profit margin with agent placed policies. Why – simple! One, it cost more to staff and maintain a large building of CSRs that it does to pay an agent a reasonable commission (10% in Texas). Second, most carriers experience higher percentages of fraud claims with online customers because they insure cars without ever seeing them.
I got away from the main subject which is Changing Demographics. Bottom line is that any agency or business can change their marketing strategy to coincide with demographic changes. The key term is to “provide value to your customers”.