Ideas for dealing with a competitive market directed toward Mass. Insurance Agents
The state of Massachusetts is set to install a competitive auto insurance system that is designed to create data regarding the activities of auto insurance agents. This represents a challenge for the state’s independent agents if they want to maintain the extraordinary 86 percent market share that they now hold for personal lines.
At its recent convention, the association for Massachusetts insurance agents held a special discussion to help its members proper for this new reporting system. Several tips and bits of information were drawn from the discussion by experts and agents, among them Jeff Foy, CEO of Foy Insurance, Charles Walsh, president of Boston software and criteria of a program for tracking insurance data, and Hal Belodoff, Plymouth Rock’s president and chairman.
Included in the tips are the following:
1. Understand that the system leads to the management of competition.
This is good when compared with such states New Hampshire and Maine where there is no management of competition and it's everyone for themselves. A major advantage of the system is that it restricts entrance by groups like GEICO and State Farms, the large-based direct writers.
2. You need to set up an efficient flow of work.
The biggest challenge will be managing the additional work that is going to be needed to acquire the multiple quotes for each risk. Foy says that from their experience each individual quote if done right, can take up to an hour to acquire.
3. Make the effort to operate in real time.
Only the independent agent can make real time quotes happen. This means that agents need to fight the tendency of their carriers to not want to accept electronic files from other carriers for establishing quotations.
4. Include other auto insurers in your package.
Over half of the independent auto insurance agencies in Massachusetts represent only one auto insurance company. This is not good. It is necessary to add carriers in order to be able to present several quotes.
5. Don’t belittle the advantages of being an independent agency.
It is important to stress the advantages of being an independent agency to your customers. This means that you are in the position to present multiple quotes and therefore present your clients with the best alternative. Foy points out the clear advantage of being able to present a range of prices.