Why we're dedicated to independent agents
By Mike Martin
Personal Lines Manager - Sun Prairie Region
Have you ever wondered why General Casualty elects to do business only through independent agents? Why not sell through call centers or the Internet?
The reasons are quite clear. The independent agency system has distinct advantages over other distribution systems. We believe our future rests with the success of our agency force, and the future of the independent agency is bright.
Better for policyholders
Your customers see the advantages, and so do we. As an independent agent, you have a unique entrepreneurial nature. You have strong ties to the community and believe in strong relationships.
Unlike some organizations that just sell insurance on the side, insurance is your sole focus and your expertise. You work with several carriers, so you can shop around to find the best products, prices and services to match your customers' needs. Your customers recognize that you'll take the time and energy to do the job right.
Agents constantly tell me that one of their most rewarding experiences is serving generations of families over long periods of time. Although family members may move out of town, they continue to do business with the local agent who dealt with their parents or grandparents. Why? The feeling is one of mutual trust and respect. They know firsthand that their parents were treated fairly. And they know they can rely on the agent to properly evaluate their exposures and provide adequate protection.
Better for agents and carriers
As an independent agent, you're fortunate enough to be able to align yourself with more profitable segments of the market. In Wisconsin, agency writers have a five-year pure loss ratio of 67.2 percent, figuring all lines of business and all Wisconsin independent agency carriers. This is a full three points below direct agency writers' loss ratio average for the last five years in Wisconsin.*
While profitability is up for independent agents, so is market share. Nationwide, independent agents are capturing an increased share of the market in both commercial and personal lines. In contrast, captive agents and direct writers' market share generally went down or stayed flat in the last few years, according to the Independent Insurance Agents & Brokers of America (IIABA) 2001 market share report.**
At GC, our unique partnership with independent agents has also proven valuable. Because 100 percent of our resources are dedicated to the independent agency system, we've been able to turn agent feedback into products and services that make both of us more profitable in the long run.
For example, based on your comments we created the upscale homeowners product, Crowne HomeownersSM, and nonstandard auto product, Generationsâ. These have both proven their worth with significant premium growth and company-wide loss ratios (as of year-end 2002) of 55.6 percent and 54.9 percent, respectively. Before Generations rolled out in Wisconsin in 2001, our nonstandard equivalent, Wilrite, had in-force premium totaling just over $100,000. Last year the Generations program generated $5.2 million of premium in Wisconsin! Company-wide, year-end premium totaled $2.9 million for Crowne Homeowners and $7.3 million for Generations.
Agents also inspired us to implement services like ClaimLine24, Marketplace Online and the Quality Repair Program, which make it easier and more efficient for agents and policyholders to do business with us.
A bright future
Our survival is based on independent agents' success, and we see a bright future ahead. Independent agents dominate the commercial lines market, finishing 2001 with 75 percent of the U.S. market, according to IIABA. And with 35 percent of the personal lines market, there's a strong growth opportunity for independent agents, whereas the IIABA report notes a "period of vulnerability for captive agents" in this area.** In addition, as a company we've seen how our relationships with agents help us provide better, more valuable products and services that benefit us both.
For all these reasons, we are 100 percent invested in independent agencies. While other companies invest their resources in multiple distribution systems, we're in your corner and your corner only.
This article is based on a presentation Mike Martin recently gave for the Independent Agents Association of Dodge County, Wis.
* These numbers reflect statutory annual statement data as reported by the National Association of Insurance Commissioners.
** From the article, "2001 Market Share Numbers Confirm Positive Trend for Independent Agents," by Madelyn Flannagan, IIABA Vice President, Education and Research, and Jeff Yates, Consultant, Nov. 6, 2002.
Crowne Homeowners is a service mark and Generations is a registered service mark of General Casualty Company of Wisconsin..
About the author: Mike Martin, Sun Prairie personal lines manager, has been with GC for 19 years. He has experience in marketing and personal lines, and he's earned CPCU and CIC designations. Personally, Mike has many ties to independent agents, including his father, brother and brother-in-law.
For more information please contact Anne M. Smith.