According to the most recent Independent Insurance Agents and Brokers of America market share report, independent agents wrote 80% of the commercial lines premium in 2007. The numbers, however, are not so rosy for personal lines. Direct writers and other types of non-independent agent distribution models accounted for just over 65% of the personal lines premium written that year.
Independent agents gave up on the personal lines market a number of years ago. We need to start working on taking it back.
Cindy Donaldson is the new marketing director for Founders Insurance Group in Torrington, Conn. She joined the agency just a few months ago from outside the insurance industry. She highlights her personal experience in a recent blog post about the issues facing independent insurance agencies and personal lines.
In the post she tells the story about a tradition in her town where the local paper publishes comments from graduating seniors. Her son’s comment? “You can save a bunch of money off your car insurance by switching to GEICO.”
Donaldson goes on to explain her view on how agents need to respond:
“In all fairness, Max wasn’t trying to be obnoxious or hurtful—he, like most Americans, has been overrun with images of talking money, geckos, and cavemen. He hears the gecko’s advertising lingo several times a day—and as he put it, “Mom, it was just a joke—it doesn’t mean anything.” GEICO, whether we like it or not, has become a part of pop culture in our society and that does mean a lot. They have mastered the art of inbound marketing—they have people like my son chanting their mantra constantly.
Heck—I’ve done it here in this blog. When a company’s logo, saying, or name becomes a part of pop culture, their Chief Marketing Officer gets a big, big bonus. It truly is the holy grail of the marketing department to reach that status.
So why is my son’s comment to freshman so important that I’m writing about it? Max’s generation will soon be the generation with the buying power, and how they receive information—including advertising—will determine what and how they buy. If I wasn’t the one purchasing my children’s car insurance and advising them on the importance of having an advisor look at their individual risks—my children would probably be wooed by the influence of advertising and assume that everyone is buying from the gecko and ergo they should too.
Independent insurance agents need to take notice. No longer can we sit back and wait for the phones to ring, or assume that the children of our clients will automatically become our clients. We can’t compete with a multi-million dollar advertising budget—so we need to connect with our clients in other ways, by creating our own inbound marketing strategies.”
I couldn’t agree with Cindy more.
Steve, and Cindy,
I think you have hit on a very critical point which has been plaguing independent agencies for a while, and something which has been exemplified by the recent adoption of managed competition in MA auto insurance and subsequent decision by several direct writers to enter (or reenter) the market in MA. How can independents compete with the big companies that have, for all practical purposes, unlimited resources to spend on marketing?
Well, I think we have part of the answer staring us in the face (and by the way, how I came across this article). As we all know, social media is an inexpensive (read: free) way to market your agencies that can counterbalance the detached marketing that faces consumers every day on what some would consider to be mainstream media. I truly believe that social media and the relationships built there can effectively counteract the continual presence of large company advertising because it offers so much more – the human side of insurance. When the sense of connectivity and local presence meets a higher level of customer service, it can really push things to the next level. As noted in Cindy’s blog, the upcoming generation will soon have the buying power – the great news is that they are more connected than ever, and most likely already on several social media platforms.
Several agencies we work with are already tackling the social media channel, and I am sure that time will show that is has worked rather well for them.
Jason
Steve,
Thanks for the plug!
CD