Speakers at the recent American Agents Alliance Conference & Expo 2000 in San Diego had a similar message of hope and of change for the independent insurance agency system. Alliance President Herb Jones, who welcomed everyone at the Opening General Session on Sept. 1, discussed the importance of “becoming more efficient in our industry.”
“We have come to this place to do battle, to prosper in the new millennium, to gain knowledge and put it to use,” Jones said. “Fill your sacks to the brim!”
Following Jones was the star of the conference: George Joseph, CEO of Mercury Insurance. No spring chicken, Joseph’s hands were slightly shaky as he held the podium. But his message was clear and as welcome as the balmy San Diego breezes to the attendees gathered at the Hyatt Regency.
“Don’t worry about the direct writers. Don’t worry about GEICO,” Joseph said. “The only person who can put you out of business is you…I’ve been hearing that the independent agency system is dead for 51 years. It’s not dead.
“We’ll be changing the way we do business with each other and with clients. It will be quicker, more efficient, but once we figure it out, no one is going to touch us. If it’s competition, it’s short-lived.”
The sixth largest auto insurer in California, Mercury deals only with independent agents. “The reason we don’t write direct is because it’s not profitable and it won’t be profitable,” Joseph proclaimed.
With an estimated 1999 market share of more than 7 percent, Mercury is one of the fastest growing automobile insurers in the nation. “They say the industry is history, but they already have one foot in the ground-there’s no way they can bury us.”
Joseph brushed off the dot-coms in the same fashion, saying that both Quotesmith and InsWeb asked for appointments with Mercury and both got turned down. “We don’t think they can be successful,” Joseph said. “InsWeb-if they’re still in business-all I can tell you is they’re even worse. It’s no reflection on the people who started it, they’re just in the wrong business.”
Jim Pouliot, president of personal lines for Royal & SunAlliance, helped attendees to do some forward thinking with his speech entitled “Future of the Industry.” Pouliot posed the question: “How do customers buy?” and answered it, saying: “Customers want it their way and they want it now. Research has found that they want speed and adaptability, and the pace of change is going to continue to accelerate
The power has shifted from the seller to the buyer, Pouliot said. “Consumers are much more knowledgeable, as they have many more sources of information. Consumers need a feeling of trust and security-even in cyberspace, customers still want personal service, individualized products and services. There will be far less tolerance in the future for poor quality or poor service.”
As far as technology, Pouliot said we can expect universal connectivity to change the way we do business and make it seamless. “It’s a global world-customers are going to be indifferent as to where they buy their products from. Competition can come from anywhere, but business will still be conducted on a local level.”