Liberty Mutual Drops Direct Sales to Middle Market Businesses; Puts Faith in Independent Agents

By | January 22, 2009

  • January 22, 2009 at 7:19 am
    scottie says:
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    Take it from the inside of WSA. Might be smart in the long run. but just burned the people who worked there.. You will not be able to BOR or AOR any of the business in transition from Wausau or Liberty for two years.. Have fun competing.

  • January 22, 2009 at 11:50 am
    JohnDoe says:
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    Michelle is dead on here regarding the percentage of the direct sales force being picked up. The 75% is very inflated. The vast majority of the reps in this department (80-90%)have been shown the door. I’m sure it is a good move for Liberty, but they have left some loyal EE’s out in the cold.

  • January 22, 2009 at 12:31 pm
    Bill says:
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    Our insurance industry takes so long to figure out things, we are in a relationship business. Maybe Hartford, Zurich and other conglomo’s will start to understand they cannot be successful going direct and going around the relationship with agents and insureds. They are creating service centers, 1-800 numbers and other mechanisms to avoid the agents relationships with their insureds. They forget or dont seem to care what the insureds want. Its so simple its funny. People want to deal with people and we all have an inate desire to form relationships with one another. Hurray for Liberty!

  • January 22, 2009 at 12:42 pm
    Theresa says:
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    I agree! So much of my new business and renewals depend on the relationship I build and maintain. People want to feel “special”. Independent Agents accomplish this one client at a time!

  • January 22, 2009 at 12:46 pm
    WiFrosty says:
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    I agree with the posting by “Bill”. However, I started in the business with Wausau, received excellent training, and have had a great career in the business. It is a shame to see a wonderful name like “Wausau” disappearing from the scene.

  • January 22, 2009 at 3:33 am
    Indy Agent says:
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    YEAH!

  • January 22, 2009 at 5:49 am
    Michele says:
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    The article fails to mention that 6 offices were told today they DO NOT have jobs and need to be out anywhere from 2 weeks to less than 2 months from now. Few were offered jobs (certainly not the “75%” this article claims as far as I’m aware) and now these people either have to uproot their lives to get a job in a new division or tough it out in the worst job market in decades. But by all means lets celebrate and cheer on the independent agent angle.

  • January 22, 2009 at 5:56 am
    Howdy Doody says:
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    So, let me get this straight, AJG/HUB/USI paid for renewals, will hire the direct agents, and then pay more if they have nice revenues from that business over two years. Geez no conflict there.. I wonder how foggy their transparency will be, and how many declined BOR’s will go over well with their soon to be Ex clients.

  • January 23, 2009 at 9:30 am
    Liberty Observer says:
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    Any company or person for that matter that is self-proclaimed hero of the downtrodden is usually just looking for a way to get close to them so they can exploit them. Gaining market share, eliminating jobs, branches, and brands so that they can raise prices in the face of less competition is hardly “Responsible”

  • January 23, 2009 at 9:38 am
    Indy Agent says:
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    Michele et al: I’m wondering where the crying is when independent agents lose their employees because of the competition from direct writers in a soft market? This is capitalism and there are winners and losers, some things go up while others go down. It’s not personal or otherwise and my agency will be delighted to hire some of these enterprising producers, especially if they have relationships and talent they can bring.

  • January 23, 2009 at 9:40 am
    tim54301 says:
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    your comments are not true.

  • January 23, 2009 at 10:49 am
    Howdy Doody says:
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    As I said, either declined BOR’s, or the policy of no BOR’s will lead to a perception by the client that their direct agent turned “independent” is not so much independent or a trustable advisor. Some of or maybe many of Direct agents brought not much more than the low bidder price, so if they are not low bidder they will be put out with the trash.

  • January 23, 2009 at 11:06 am
    Paul says:
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    This article left out an important piece of information. In order for an agency to get a middle markets contract they must have at least $50 million written premium or $5 million in commercial lines revenue. Our agency has an appointment with one of Liberty’s agency markets companies. This was in the letter that they sent out to the agencies. Those requirements will eliminate most agencies from getting an appointment. I know of some large agencies that don’t have that kind of premium volume.

  • January 23, 2009 at 11:07 am
    gf clock says:
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    First of all, no business model built for success can guarantee job security in a healthy marketplace, much less a poor one. Job cuts don’t suddenly make an organization heartless; similarly, favorable compensation in the good times doesn’t come from altruism.
    Secondly, most sales reps with experience retained positions with Liberty or with the brokers. Reps who are relatively new or haven’t proven themselves aren’t as lucky. There are some unfortunate redundancies on the service side and perhaps with underwriting (much of which has yet to be seen) but in the big picture, Liberty’s reorg is more benign than what’s going on in the rest of the economy.
    Finally, talk is cheap. It’s a competitive marketplace and people will say what they must, but serious players know that Liberty is a solid, formidable carrier. The rest is just details.

  • January 23, 2009 at 5:19 am
    Laughing all day long...... says:
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    HA! IT IS LIBERTY…. PEOPLE !! HA, HA, I’ll say it again: IT….. IS…. LIBERTY !!!

    You expect them to have a conscience?!?!?! For all of you that have been thinking they are Santa Claus, enjoy your lump of coal !!!

    Walks like a skunk, looks like a skunk, smells like a skunk….. IT IS LIBERTY !!!

    And for all of you Independent Agent SUCKERS who have been jumping in bed with Peerless, Indiana, Hawkeye, and all of the other LIBERTY REGIONAL MARKETS, you are about to get yours handed to you to !!!! (it is coming)

    HAVE FUN !!!!

    What makes me the most happy is that our agency saw it coming and refused to take the contract from Liberty. And we’re waiting to scoop up the cream as the market shifts!!

  • January 24, 2009 at 4:36 am
    Paul says:
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    Tim, the information in my response was taken from a letter that our agency received from Montgomery. How can it not be true?

  • January 25, 2009 at 9:50 am
    Insurance Girl says:
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    I made the jump into the insurance world and specifically to Liberty Mutual upon a referral from a very good friend. While Liberty’s training is outstanding I soon started to feel a shift in their appetite making it increasingly difficult to win business (which looking back were obvious signs of what was to come). Many of the clients I worked with worked with Liberty because they liked having the option of a direct writer. While I believe this is just another casualty of a poor economy it’s a shame and leaves a bad taste that they continued to hire while they were making a decision to change a 100 year model nearly a year ago. While they have treated the employees they are letting go well given the economy there was no where near 75% of the reps or underwriters retained. 3 out of the 15 reps in my office remained (2 of which were in a different unit) and none of the underwriters. One of our office managers 5 years from retirement was let go and my good friend who had been with Liberty for 17 years as well. Such a shame. Word travels fast and will make it difficult for brokers to want to work with them I would assume. Such a shame I really thought I had a good thing going.

  • January 26, 2009 at 7:12 am
    And you would be right.... says:
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    I think it was said in an earlier e-mail. Whether you are an agent for Liberty, for one of their regional markets, or an employee….. If it looks like a skunk, walks like a skunk, and smells like a skunk – then it must be LIBERTY!!!

    If you fear that Liberty will do something to screw you over, then take a closer look. They’ve probably already started the ball rolling in that direction!!

    WAKE UP PEOPLE – IT IS LIBERTY !!!!

  • January 26, 2009 at 9:24 am
    Safety Guy says:
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    People to people, eh? Well Liberty got rid of most of the loss control service staff that serviced this class of business, creating an ‘electronic’ service division to fill the void. So instead of real people showing up, you can go on line and listen to a webcast or get a document for your ‘service’. That’s what I call relationship building.

  • January 26, 2009 at 9:46 am
    Insurance Guru says:
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    I agree with Indy Agent and GF Clock. Also, unfortunately, staff from direct writers may experience difficulty finding work because the direct writers generally only educate their staff on the products & coverages they sell. They (direct writers) don’t benefit from a well rounded general knowledge of insurance, so they don’t push it. They also tend to develop their own proprietary designations that mean virtually nothing when you leave that particular company.

    Whoever you are, wherever you work don’t depend on a company to look out for your educational needs beyond what they want from you. Negotiate or pay for what you truly need to be valuable and marketable in the industry as a whole.

    You will serve your clients better and have more to show on your resume should you need to look for work elsewhere. Good luck.

  • January 26, 2009 at 10:37 am
    thenatural says:
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    So…does how will this directly affect the small independent with a 1m book with liberty agency markets,,,? My main concern is that if they continue to buy other insurance co’s they will eventually pull the plug on all of the small to mid size indies and then these small indies will scramble to the other carriers with no chance of beating liberty rates…

  • January 28, 2009 at 2:57 am
    dirtdevil says:
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    I’m a current Liberty Mutual Business Market Direct customer and, as a former independent agent/broker, I was very pleased with the personal relationships that our firm developed with Liberty Mutual staff members over the past six years that they’ve insured our worker’s comp and business auto. They have provided us with excellent loss control, claims, and service. There is no “value added” which an independent agent can add to that relationship, so I’m very disappointed in Liberty Mutual’s decision.

    But here’s the “trick” being played on independent agents: Liberty Mutual will not accept any broker of record/agent of record letters on the affected business until June, 2010. So, rather than allowing customers to put their “faith in independent agents,” Liberty Mutual is forcing a relationship between their customers and one particular agency/brokerage to which Liberty has sold the renewal rights. This is the very antithesis of the independent agency system and I’m amazed that a hue-and-cry has not already been raised.

    Good luck, independent agents!

  • January 29, 2009 at 3:24 am
    Smarter than the rest..... says:
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    It was written and repeated here a couple of times…..

    If it looks like a skunk, walks like a skunk, and smells like a skunk – then it must be LIBERTY!!!

    If you fear that Liberty will do something to screw you over, then take a closer look. They’ve probably already started the ball rolling in that direction!!

    How do I know this?? IT IS LIBERTY !!!!

  • November 10, 2009 at 8:57 am
    Anonymous says:
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    Liberty is a big company, as such some people are going to get hurt during economic downturns in effort to streamline their balance sheets. I feel for people who lose their jobs in this, but let’s remember it’s Corporate America…we are all independent agents when it comes to employment. Let’s get ahead of the curve by managing our own careers and not letting a company dictate how we (and our families) survive and get paid. This is a good company.



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