MARKETING
Looks to hit 10% of this $31 billion market
By Dennis Pillsbury
James M. Ruel, The Hartford's senior vice president, Select Customer.
When The Hartford states it is committed to small commercial business, it has more than two decades of experience in this market to back up its claim. And it has 18 consecutive years of combined ratios below 100 to prove that it really likes--and really understands--this marketplace.
So it probably should come as no surprise that, this year, the company added nearly 200 classes to its growing list of small businesses that are eligible for The Hartford's businessowners policy (BOP) called "SPECTRUM," bringing the total to around 1,000.
"Partnering with our agents has enabled us to grow at the rate of about 20% a year," according to James M. Ruel, The Hartford's senior vice president, Select Customer. "Our goal is to boost our marketshare to around 10%. We currently write about $1.3 billion, or 4.2%, of the $31 billion small business market."
Listening to agents
"Our growth in this sector has been enhanced by the fact that we listen to our agents and provide the products and services that they and this market need," Jim says. "We learn from the nearly 5,000 agents selling our small commercial product every time we visit them. Our objective is to make things easier for our agents because we recognize that that is the way we will achieve our growth goals."
For example, Jim continues, The Hartford Select Customer group is continually expanding its local presence in order to establish closer relationships with all its agents. "We now have 110 sales representatives in the field reporting back to 14 regional vice presidents. We also have 14 business technology solutions managers in the field who are there to help agents with any technology problems." He points out that in 1997, Select Customer had only 47 sales representatives in the field and its share of the small business market was 2.4%. "Each year since then, we've increased the number of sales reps and our market share has jumped, as well, to our current 4.2%. We've seen growth rates of nearly 20% in this sector in the last two years, while the industry overall has grown less than 4% a year. It is clear that this enhanced local presence has helped us achieve the success we've enjoyed. And we will continue to focus on becoming more local."
At the same time, the back-room functions have been consolidated in three locations--Charlotte, North Carolina; New Hartford, New York; and San Antonio, Texas. "This allows us to handle this business more efficiently," Jim says.
Another change that has been "the direct result of agent feedback" is the enhanced coverage available with the SPECTRUM BOP, making the policy customizable for different industry segments. Though SPECTRUM has a myriad of built-in coverages, such as EPLI and equipment breakdown, it also has a wide variety of options available, including:
* CyberFlex--a group of coverages designed to protect against Internet-related exposures for traditional "brick and mortar" businesses
* Errors & omissions (E&O) for high-tech businesses
* Professional liability for pet groomers
* E&O for florists
* Business income coverage extension for building owners
* Blanket limit for business personal property
* Business income for off-premises utility services
Among the coverages included in CyberFlex are personal & advertising injury on a worldwide basis, and business income protection against interruptions to an insured's operations due to Internet or Web site disruptions for a variety of specified reasons, including cyber attacks.
The Hartford also added alternative market placement at the suggestion of its agents. Under this program, the insurer will place business for which it does not have an appetite with another insurance company. For example, some habitational risks may be placed elsewhere; however, the bills for the entire package of coverages still come from The Hartford, making it seamless to the customer. All such business is placed with companies that are rated "A" or better.
Jim goes over the details of the Select Customer program for small businesses.
"We really value the relationship we have with The Hartford. We couldn't ask for a better partner," says Gary Trippe, CIC, chief executive officer of Oswald Trippe and Company, Inc., Fort Myers, Florida. "We talk regularly to quickly settle any underwriting or service issues. Also, we've helped pilot several systems with The Hartford and, as a result, find those systems easy to work with. All in all, working with The Hartford enables us to provide great service to our small commercial customers."
One-and-done technology
Select Customer offers a variety of ways agents can communicate and transact business with the company electronically, including real-time SEMCI using through the agency management system, an extranet Electronic Business Center (EBC), and quoting and submissions via the Internet.
Real-time SEMCI allows agents to receive a quote and rating information in their agency management system. Submissions can be uploaded. Available for download are new, renewal and endorsed policies, monthly direct bill commission statements, and client payment and other billing information.
The EBC includes a variety of tools, including an Insurance Score tool that lets agents pre-qualify applicants, an online sales guide, loss control information, online quotes and submissions, sales and marketing materials, production reports, claim information and so on. "Policy information and loss data are all there," Jim notes, adding that the EBC actually can serve as a backup if an agency were to lose information. "One of our brokers whose records were destroyed on September 11 used EBC to get back in business."
For those agents who prefer using the Internet and real-time technology, The Hartford now is able to offer Internet-based sales and service capabilities, similar to SEMCI. "Online quoting and submission lets agents quote new business anywhere they have Internet access," Jim says. "This gives our agents another choice on how they wish to do business with The Hartford."
A service center for agents who want one
Since small commercial business can involve a lot of transactional activity, some agents prefer to have the carrier provide the back-room service. To fill this need, The Hartford offers a service center with professional representatives who will answer client questions, resolve billing inquires, issue certificates, and process endorsements. Service center personnel also will cross-sell accounts by offering coverage upgrades or additional coverages. For hard-to-place coverage needs, they can offer alternative market placement. All of the servicing is done in the name of the agent.
The agent's servicing fee is 1% of renewal commissions. There is no charge for new business. "The proof that this model is successful lies in the fact that the retention rate for service center clients is as high or higher than for those who are serviced by the agency," Jim says. "And our account retention overall is more than 90%. The average service center account has been with The Hartford for six years."
Helping its agents find markets
The Hartford has a database of more than 15 million businesses that is broken down by SIC (Standard Industrial Classification) Code and territory. The information in this database is available to Select Business agents who want to expand their small business book.
Jim concludes: "Probably the most important feature of the Select Business program is its flexibility. Nothing is mandatory. It is up to the individual agency to decide on its automation and service needs. Coverage is customizable. Our goal is to truly be partners with our agents and develop and maintain a relationship of trust." *
For more information
www.thehartford.com