Daniel LewisAgency Marketing Process Leader
By Dennis Pillsbury
Daniel Lewis
Agency Marketing Process Leader
Progressive Insurance Co., already the largest writer of auto insurance in the independent agency system, sees its "greatest challenge" as getting independent agents to accept it as a preferred auto insurance writer, according to Dan Lewis, agent marketing process leader at Progressive. "We are becoming extremely competitive but what we're finding is that, while we get positive comments from agents, they perceive us as a nonstandard auto market. A major focus of what we're doing is to try and change that perception. We're more competitive in prices; we're establishing a brand, which is important in the preferred auto market; and we are developing additional strategies to gain acceptance in the agency channels," Dan says.
He continues that "a high percentage of our business is generated by independent agents. We're working very hard to assure that that will continue forever." Dan refers to past experiments with alternative distribution methods that competed with independent agents by pointing out that "we learned that we did not need to compete. A goal of our Community Marketing Strategy is to find out how to make our marketing efforts support all distribution channels. Naturally, we want business to come to us, but if it doesn't, then we want it to remain in the independent agency system."
Gold level support for IIAA
This commitment to the independent agency system was graphically displayed when Progressive committed to IIAA's National Communications Program at the highest level--Gold.
Dan explains that "we are leaders, being the largest writer of auto insurance through independent agents. We want to demonstrate that leadership and that's one of the reasons for our investment in the IIAA advertising program. To the extent that they do good brand development work, that will benefit us. After all, we have more to gain by independent agent success than any other auto insurer. We have spent a lot of time and money establishing a brand and the IIAA program should complement that effort."
In a recent "Agent Update," Peter B. Lewis, chairman and CEO, explains further his company's commitment to independent agents. "Research and experience convince us that the vast majority of consumers prefer in-person guidance when selecting a new auto insuror. Flexible, pragmatic and aggressive independent agents will flourish in the next millennium by selling Progressive auto insurance, which we make continuously easier to do by regularly lowering costs and prices, by developing a recognized consumer brand and by constantly improving service quality and speed. Progressive believes that independent agents who offer consumers more options, better service and a more personal sales experience will regain customers from their captive agent counterparts....
"Progressive's success requires independent agents to reverse their long-term decline in auto insurance market share. We envision this happening because we now offer superior services and increasingly offer prices lower than direct writers. Many agents are joining our efforts to lower costs by reengineering their operations to produce policies profitably using our lower commission product offerings. They do this by doing little, if any, work after the sale, relying on our 24-hour customer service staff to do it for them....
"Our strategy is to develop the lowest cost product, supported by the best service, so that agents do what they do best--sell new policies, and we do what we do best--issue documents, collect premiums, answer policyholders' questions, make policy changes, take claims reports and adjust losses."
The 1996 record
At the end of 1996, Progressive was the sixth largest writer of private passenger auto insurance and was the largest independent agency writer of that line.
More than 95% of new auto applications were uploaded using Progressive's ProRater® software.
Twenty-five per cent of all losses were reported within two hours. More than 50% of damaged vehicles were inspected within the first nine hours. Nearly half of the claims were closed in less than one week.
Progressive was downloading to 457 agents by the end of the year and won the Applied System's "Company of the Year" award.
The Standard, Preferred and Ultra-Preferred auto programs reached 44 states and were provided through more than 20,000 independent agents locations--surpassing both State Farm and Allstate. Net written premiums grew 18% to $3.4 billion with Standard and Preferred business being the fastest growing segment.
Progressive's television advertising reaches more than 25% of the U.S. population, helping to support independent agents who want to provide competitive private passenger auto insurance to their clients.
The vision
Progressive's Agency Marketing Process Team Vision sums up its renewed commitment to agents.
The Agent Marketing Process Team strives to achieve world-class profit and growth breakthroughs. To enhance our businesses we will:
* Effectively deliver, and train independent agents on Progressive's evolving auto insurance product, particularly as our Standard, Preferred and Ultra-Preferred programs become more competitive.
* Continue to expand our advertising in more markets to provide agents with a broadly recognized and respected consumer brand. Agents who choose to align their marketing with Progressive's brand will be able to attract and retain more customers.
* Help agents to consistently deliver positive consumer quoting and sales experiences.
* Achieve 100% electronic transaction interface with agents and promote to agents the use of our 24-hour services, including 24-Hour Policy Service and Immediate Response® claims service. By so doing, independent agents will have the best customer service, the lowest operating costs and more time to generate new sales.
The private passenger auto insurance market consistently has left the independent agency system under a combination of competitive pressure from direct writers and desertion of the market by independent agent companies. Progressive's commitment to this important market, the single largest line in the property/casualty business, should help to reverse this disturbing trend. It will be interesting to watch the developments in this area. *
©COPYRIGHT: The Rough Notes Magazine, 1997