Thats news to me, I didn’t realize they provided service to begin with.
I can’t count how many times I have rewritten policies to provide 5x the amount of coverage for half the premium. Is there a direct writer out there that has competitive pricing for a great risk (no accidents, great credit score, etc..).
I quote my own personal auto once a month, and the closest a direct writer has ever got to what I pay with a mutual company is $400 more.
I got the Costco/Ameriprise solicitation today, gave it a run and they are $686 more a year. Does anyone policy their advertisements of saving $400+ when customers switched to them?
This is just speculation on my behalf since I am not an acuary, but I think there are a few reasons why it seems as though direct tends to be higher then going thru an independant.
1. The insurer doesn’t have to higher as many employees to service the policies, the independant agents tend to handle the easy stuff on their own. So the independant has to take on a lot of the overhead.
2. Its easier for an independant to catch potential fraud since with most agents, the majorty of the business is walk in. They can catch if that Ecoline has a latter rack with PVC piping and an large advertising stickers on the side (this happened to me two months ago, and the client still denied that it was being used for business and demanded I write a PAP for them instead of a BAP).
Millions of dollars are spent each year to persuade consumers to buy Company ABC bacause my policy is “cheaper”. Cheap has never translated well into value. J. D. Power measures “value”, of which price is only one component. The YUGO was cheap, but it did not perform, it did not deliver value. Insurance is no different. Value is established during the policy period, in service and advice and advocacy delivered to the consumer; and especially at claim time. The dissatisfaction is that the “cheap” piece of paper (policy)customers are being sold, is not delivering the “value” that was promised along with the cheapest price. People still want, desire and deserve “value” for the insurance dollars they spend, and they absolutely will not find it by swallowing what the millions in advertising dollars are feeding them. The policy is only as good as the Company, and the people, that service it. Service begins with a committed, local agent, who is invested in the buyer for his/her own survival. If you find someone like that, you will get the best of price, product and service.
I can’t stand the Safeauto commericals where they bash the independant agent. I feel its just preying on insureds lack of knowledge. When an insured finds a good agent, they will find an agent that will explain to them the ins and outs of insurance and help alleviate the insureds lack of knowledge.
I’m confused again, most states require renewals be out 30 to 60 days ahead of the anniversary date – so who’s not getting advanced notice of a rate increase?
They want the company CEO to personally come to their house (or trailer) to tell them their rate is going up! That is because either they can’t read, or they don’t open their mail! They want advance notice so they can complain to Barry or Nancy!
The people who claim they didn’t get advance notice are the ones who got the renewal, saw it said “This is not a bill” on the envelope, and promptly deposited it in the trash.
Your reasoning makes sense but unfortunately it doesn’t seem to be panning out that way. I would agree that the local agent can underwrite better (look out the window at the vehicle, what is the person wearing, etc) and thus should have better loss results but the marketshare for Direct carriers is growing. Partly because of advertising and partly because of pricing. The pricing advantage is coming through an initial acquistion cost that diminishs over the policy period and through pricing models that aren’t offered to an agent.
Some of what NO NAME said is correct, but we are an independent agent in a large Metro area and never have walk-in business. If we have 2 clients a month come in, it’s a busy month here. Most of our PL business is handled by phone or email. CL is handled face to face for the most part.
What the survey says more than anything else is this: If price is what matters most to consumers; and price is what the industry is selling in its advertising to hold or grow marketshare; then when price is cut to the bone, what else is there?! There can never be a value proposition perceived by the customer, as long as “value” is equated to the lowest price. Service comes at a price, and is reflected in the service and products you purchase – no matter who delivers the product or service. We are “getting what we are paying for.”
Thats news to me, I didn’t realize they provided service to begin with.
I can’t count how many times I have rewritten policies to provide 5x the amount of coverage for half the premium. Is there a direct writer out there that has competitive pricing for a great risk (no accidents, great credit score, etc..).
I quote my own personal auto once a month, and the closest a direct writer has ever got to what I pay with a mutual company is $400 more.
I got the Costco/Ameriprise solicitation today, gave it a run and they are $686 more a year. Does anyone policy their advertisements of saving $400+ when customers switched to them?
/end rant.
*Does anyone POLICE their advertisements
Must be a slow news day! We have been rewriting customers for two years and companies have been increasing their rates for two years!
This is just speculation on my behalf since I am not an acuary, but I think there are a few reasons why it seems as though direct tends to be higher then going thru an independant.
1. The insurer doesn’t have to higher as many employees to service the policies, the independant agents tend to handle the easy stuff on their own. So the independant has to take on a lot of the overhead.
2. Its easier for an independant to catch potential fraud since with most agents, the majorty of the business is walk in. They can catch if that Ecoline has a latter rack with PVC piping and an large advertising stickers on the side (this happened to me two months ago, and the client still denied that it was being used for business and demanded I write a PAP for them instead of a BAP).
Millions of dollars are spent each year to persuade consumers to buy Company ABC bacause my policy is “cheaper”. Cheap has never translated well into value. J. D. Power measures “value”, of which price is only one component. The YUGO was cheap, but it did not perform, it did not deliver value. Insurance is no different. Value is established during the policy period, in service and advice and advocacy delivered to the consumer; and especially at claim time. The dissatisfaction is that the “cheap” piece of paper (policy)customers are being sold, is not delivering the “value” that was promised along with the cheapest price. People still want, desire and deserve “value” for the insurance dollars they spend, and they absolutely will not find it by swallowing what the millions in advertising dollars are feeding them. The policy is only as good as the Company, and the people, that service it. Service begins with a committed, local agent, who is invested in the buyer for his/her own survival. If you find someone like that, you will get the best of price, product and service.
Ahem, ahem, ahem Bill.
I can’t stand the Safeauto commericals where they bash the independant agent. I feel its just preying on insureds lack of knowledge. When an insured finds a good agent, they will find an agent that will explain to them the ins and outs of insurance and help alleviate the insureds lack of knowledge.
Way to go Erie and AutoOwners! Nice to see some regionals at the top. Not surprised with my experience with these 2 companies.
I’m confused again, most states require renewals be out 30 to 60 days ahead of the anniversary date – so who’s not getting advanced notice of a rate increase?
The ones who are too busy shopping rates on the internet.
They want the company CEO to personally come to their house (or trailer) to tell them their rate is going up! That is because either they can’t read, or they don’t open their mail! They want advance notice so they can complain to Barry or Nancy!
The people who claim they didn’t get advance notice are the ones who got the renewal, saw it said “This is not a bill” on the envelope, and promptly deposited it in the trash.
Your reasoning makes sense but unfortunately it doesn’t seem to be panning out that way. I would agree that the local agent can underwrite better (look out the window at the vehicle, what is the person wearing, etc) and thus should have better loss results but the marketshare for Direct carriers is growing. Partly because of advertising and partly because of pricing. The pricing advantage is coming through an initial acquistion cost that diminishs over the policy period and through pricing models that aren’t offered to an agent.
Some of what NO NAME said is correct, but we are an independent agent in a large Metro area and never have walk-in business. If we have 2 clients a month come in, it’s a busy month here. Most of our PL business is handled by phone or email. CL is handled face to face for the most part.
What the survey says more than anything else is this: If price is what matters most to consumers; and price is what the industry is selling in its advertising to hold or grow marketshare; then when price is cut to the bone, what else is there?! There can never be a value proposition perceived by the customer, as long as “value” is equated to the lowest price. Service comes at a price, and is reflected in the service and products you purchase – no matter who delivers the product or service. We are “getting what we are paying for.”