Despite the seemingly difficult times independent insurance agents may be facing today, they will always have a future, according to George Joseph, chairman and founder of Mercury Insurance, considered one of the most innovative underwriters in the country and the largest insurer in California working exclusively with independent agents.
Speaking at the recent Insurance Brokers and Agents of the West (IBA West) annual meeting, Joseph recalled that when he and newly installed IBA West President Rick Dinger began working together in 1972. At that time, Mercury was a very small company with about $20 million dollars in writings, he said. But today, because of the efforts of independent agents, that number is equal to less than two days business at Mercury, the chairman said.
Despite the millions of dollars spent on risk classification technology and innovations to improve underwriting, independent agency companies have a tool that their competitors don’t and cannot duplicate — independent agents who establish and maintain the relationship with the customer, Joseph explained. He cited studies that illustrate how that relationship inspires loyalty to the insurer and the agent, and convinces [the customer] that independent agents add a great deal of value to personal lines products. He said studies show that consumers who shop do so in direct relationship to the amount of attention they receive from their agent or company.
Commenting on the state of the industry, Joseph said there is a great deal of concern about layoffs and job cutting in the news today, and Mercury shares those concerns. He said he was closely watching the investments of the company and even predicted that some companies would continue to report poor results. Nonetheless, Joseph said he is optimistic that prices had bottomed out and that insurers will recover by the end of the year.
“This is my 60th year in the business,” Joseph said, “so I’ve been through cycles. As an agent, I remember when I would go through cycles. If my phone wasn’t ringing, I’d be out of the office.” He told the audience of how years ago he would park his car and cover an entire city block gathering new clients. He is convinced that methodology still works today.
“There are still a lot of people who say their only contact is an e-mail or a piece of paper,” he said, but noted, “Your customers want to talk with you. Take that time to make that contact, and I guarantee whatever percentage of business you are losing, you could cut it in half.”
Joseph stressed the importance of working a little harder than competitors to maintain client relationships. “If you can show an interest in your client, spend a little more time, we’ll do our part,” he said. “We will build facilities for consumers to get more information from their computers. My goal is for consumers to see their car in the garage being repaired,” he concluded.
IBA West’s annual conference was held Jan. 28, 2009 in Glendale, Calif. The association represents more than 1,000 firms in California, Washington and Oregon and more than 14,000 insurance professionals. In California, IBA West is affiliated with the Independent Insurance Agents and Brokers of America.
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