I Think all this is nice and all, but the main reason why independent agents are strugling day in and day out is because companies like Mercury, Foremost, Infinity, Gmac, Allied, and all other companies that independent agents use, DON’T EVER TAKE A RATE DECREASE OR STAY THE SAME, they are always going up and up and up and agents are spinning their wheels trying to re-write the same people over and over, so is very hard to grow and have that marketing capital to do creative stuff.
What a lame excuse! That’s why you’re independent. If company A isn’t doing the right thing you have company B to fall back on. I don’t know about for you but I’ve had 2 majors take substantial decreases for preferred auto.
Fact Allstate, State Farm and Farmers have all taken significant rate increases around the country and will continue to do so as this year results have been terrible yet they still retain over 90% of thier clients. Carriers are going to take rate as they need to be profitable. If you are constantly remarketing you are spending your time in the wrong place. Premium matters but value is more important. Focus on customers that value what you bring to the table and for god sakes cross sell them as it is a proven fact the more lines of business you have the better retention.
Think of it this way how can a direct writer take rate and keep thier clients without the opportunity to remarket and your wasting all your time remarketing to cheaper rates. (and less revenue)
We have written a lot of new business from many folks that have had All State and State Farm because of the high rate increases they have recently been subjected to. We represent other carriers that are all A+ rated. Some have very familiar names and one isn’t that well known, but still is A+ rated by JD Powers. Just because you have a Brand name doesn’t mean that the loyalty is there when you raise your rates by 30%. Having more options to offer customers is certainly a plus in this business.
There’s certainly a reason that I’m independent. My point is simply that captive agents’ customers will take a lot of abuse before they shop. In my area one of the majors non-renewed a lot of clients and tripled the rates of those they kept. The ones that were kept were substantially more irritated than the ones they dropped.
November 30, 2011 at 10:40 am
David B says:
Like or Dislike:
0
0
Wow, they’re experts on insurance marketing? Their hubspot website grade is a 63%. Who’s their web developer? My agency’s website grade is a 97%. Maybe I should start writing for the insurance journal.
In my opinion, this article misses the point entirely. You’ll never beat GEICO or Allstate at their game. As an agency owner, your competition is against other local agents. I could go on forever.
I guess I’ll start my own website and call it the “Insurance Marketing Engine”. That has a ring to it. If you want practical application of how to properly market on the web and make it to page 1 for your insurance keywords, visit: http://www.txinsurancepro.com
Having available markets to move your clients to when rate increases hit is part of why being independent is great. It does cause some concern when your companies take double digit rate increases and you need to move large amounts of business as it does take away from your time to do other things. It is a reality though. We have one taking 19.4% increases on their auto book. We will be proactive and send out letters, quotes with other carriers, etc. but the time could be spent with new business and account rounding. I think there is more to it than the excuse it is all due to fraud in Florida but it doesn’t really matter at this point as the work needs to be done. In a perfect world rate stability would there but it isn’t. Be thankful when you can move the business and retain the client. Rates are going to continue to rise in Florida.
Being proactive in the Florida auto market is smart. I’d use caution in being proactive on the home side of things. If someone is with a stable carrier I like to review the file and see where we may be able to find savings. Rarely will I offer to switch them to a less tried and true carrier.
Alan;
Many “Captive” or “Exclusive” agents would take exception to you calling them “Direct”. A clearer distinction would be to compare those companies that do not provide agent representation versus those that do. http://www.itaamerica.com
I Think all this is nice and all, but the main reason why independent agents are strugling day in and day out is because companies like Mercury, Foremost, Infinity, Gmac, Allied, and all other companies that independent agents use, DON’T EVER TAKE A RATE DECREASE OR STAY THE SAME, they are always going up and up and up and agents are spinning their wheels trying to re-write the same people over and over, so is very hard to grow and have that marketing capital to do creative stuff.
What a lame excuse! That’s why you’re independent. If company A isn’t doing the right thing you have company B to fall back on. I don’t know about for you but I’ve had 2 majors take substantial decreases for preferred auto.
I agree. We have no problem writing new business, it is retaining the existing renewals that is tough. Too many rate increases right off the bat.
“death knell” …
Not “knoll” which is a small hill.
Fact Allstate, State Farm and Farmers have all taken significant rate increases around the country and will continue to do so as this year results have been terrible yet they still retain over 90% of thier clients. Carriers are going to take rate as they need to be profitable. If you are constantly remarketing you are spending your time in the wrong place. Premium matters but value is more important. Focus on customers that value what you bring to the table and for god sakes cross sell them as it is a proven fact the more lines of business you have the better retention.
Think of it this way how can a direct writer take rate and keep thier clients without the opportunity to remarket and your wasting all your time remarketing to cheaper rates. (and less revenue)
det3636 is that true? I’m pretty sure that the big carriers’ retention is less than 90%. I was thinking that around 84% is more likely.
If your numbers are correct, then that is surprising.
I can’t speak for all agencies but I can say that when I worked in the captive world 90% was pretty typical. Brand recognition goes a long way.
We have written a lot of new business from many folks that have had All State and State Farm because of the high rate increases they have recently been subjected to. We represent other carriers that are all A+ rated. Some have very familiar names and one isn’t that well known, but still is A+ rated by JD Powers. Just because you have a Brand name doesn’t mean that the loyalty is there when you raise your rates by 30%. Having more options to offer customers is certainly a plus in this business.
There’s certainly a reason that I’m independent. My point is simply that captive agents’ customers will take a lot of abuse before they shop. In my area one of the majors non-renewed a lot of clients and tripled the rates of those they kept. The ones that were kept were substantially more irritated than the ones they dropped.
Wow, they’re experts on insurance marketing? Their hubspot website grade is a 63%. Who’s their web developer? My agency’s website grade is a 97%. Maybe I should start writing for the insurance journal.
In my opinion, this article misses the point entirely. You’ll never beat GEICO or Allstate at their game. As an agency owner, your competition is against other local agents. I could go on forever.
I guess I’ll start my own website and call it the “Insurance Marketing Engine”. That has a ring to it. If you want practical application of how to properly market on the web and make it to page 1 for your insurance keywords, visit: http://www.txinsurancepro.com
David B
Having available markets to move your clients to when rate increases hit is part of why being independent is great. It does cause some concern when your companies take double digit rate increases and you need to move large amounts of business as it does take away from your time to do other things. It is a reality though. We have one taking 19.4% increases on their auto book. We will be proactive and send out letters, quotes with other carriers, etc. but the time could be spent with new business and account rounding. I think there is more to it than the excuse it is all due to fraud in Florida but it doesn’t really matter at this point as the work needs to be done. In a perfect world rate stability would there but it isn’t. Be thankful when you can move the business and retain the client. Rates are going to continue to rise in Florida.
Being proactive in the Florida auto market is smart. I’d use caution in being proactive on the home side of things. If someone is with a stable carrier I like to review the file and see where we may be able to find savings. Rarely will I offer to switch them to a less tried and true carrier.
Alan;
Many “Captive” or “Exclusive” agents would take exception to you calling them “Direct”. A clearer distinction would be to compare those companies that do not provide agent representation versus those that do.
http://www.itaamerica.com