Does anyone Sell PC to Entire State?

[geoagency]

Is it time PC agents accept that direct writers have changed the insurance landscape, and the next generation no longer cares about location of a physical office. Is it time to start writing PC in the entire state. As opposed to 50 miles from my office? Any thoughts? Someone who tried it with some input?

 

[nyc2phi]

Is it time PC agents accept that direct writers have changed the insurance landscape, and the next generation no longer cares about location of a physical office. Is it time to start writing PC in the entire state. As opposed to 50 miles from my office? Any thoughts? Someone who tried it with some input?

What's your plan on marketing to people over 50 miles away?

I never been against it, just always has been easier to obtain leads and referrals from around my immediate area.

 

[Heather]

In 2012 I had an explosion of business out of town, it was actually 75% of my book that was not local. All was going good, new agency making a profit, lots of happy customers. By 2014 half of those people were cancelled for non-payment. I even had some people make a down payment and never hear from them again. Loss ratio with my main carrier went from 0 to 150% in 2013 because of these out of town people. I will only do eft for non local accounts now. That helps some and I don't write every piece of business anymore either. Half my business now is non-local, I live in a small town in a state that I am not from so I have to think beyond the neighborhood if I want to survive.

 

[geoagency]

In 2012 I had an explosion of business out of town, it was actually 75% of my book that was not local. All was going good, new agency making a profit, lots of happy customers. By 2014 half of those people were cancelled for non-payment. I even had some people make a down payment and never hear from them again. Loss ratio with my main carrier went from 0 to 150% in 2013 because of these out of town people. I will only do eft for non local accounts now. That helps some and I don't write every piece of business anymore either. Half my business now is non-local, I live in a small town in a state that I am not from so I have to think beyond the neighborhood if I want to survive.

Thank you so much for the input. What do you think changed from 2012 to 2014? Was the areas of business just the wrong clientele?

It sounds like it went south on you, but yet still half your business is non local?

I guess I was planning to market the whole state, then narrow it down into counties, or zip codes, based on sales once I get enough data. As with any company, we are more competitive in certain areas of the state.

For instance, about an hour and a half north of me there is a city we always win in. I am wondering if there are more big cities like that across the state.

Thanks again, any input is helpful.

 

[djs]

Ask yourself a simple question.... well, actually a series of simple questions.....

- What value do you, as an agent, bring? Why should someone do business with you? Most P&C agents answer this mentioning something like personal service, being there for their clients, etc. How can you be there if its a few hundred miles away?
- Is there not enough potential business in your backyard? If not, then yes, you have to stretch.
- What advantage does marketing the whole state bring? Unless you have carriers that are awesome in some counties and terrible in others, there probably isn't much. If you do have carriers like that, then focus on the counties that they are awesome in.

My view is, depending on the size of your agency, you need somewhere between 25K and 100K household to market into. Sometimes this is a mile or 2, might be the city, or the county or the state. The more 'local' you can keep it, the better off you are.

Besides, every agent I know that starts writing 'remote' business has an increased loss ratio because of it. You start to find out that the reason they called you, 250 miles away, is because the agent in town has already denied writing the property for some reason.

My thoughts are to go as big as you can afford so you can get the population that you need to make you successful. Once you have the population base, figure out how to approach the market rather than trying to avoid the market by going elsewhere.

Dan

 

[geoagency]

Ask yourself a simple question.... well, actually a series of simple questions..... - What value do you, as an agent, bring? Why should someone do business with you? Most P&C agents answer this mentioning something like personal service, being there for their clients, etc. How can you be there if its a few hundred miles away? - Is there not enough potential business in your backyard? If not, then yes, you have to stretch. - What advantage does marketing the whole state bring? Unless you have carriers that are awesome in some counties and terrible in others, there probably isn't much. If you do have carriers like that, then focus on the counties that they are awesome in. My view is, depending on the size of your agency, you need somewhere between 25K and 100K household to market into. Sometimes this is a mile or 2, might be the city, or the county or the state. The more 'local' you can keep it, the better off you are. Besides, every agent I know that starts writing 'remote' business has an increased loss ratio because of it. You start to find out that the reason they called you, 250 miles away, is because the agent in town has already denied writing the property for some reason. My thoughts are to go as big as you can afford so you can get the population that you need to make you successful. Once you have the population base, figure out how to approach the market rather than trying to avoid the market by going elsewhere. Dan

Dan,

Thank you so much for the great insight. I come from a company that puts a lot of pressure on new agents to write a lot of business. I write about 80-100 policies a month.

Better agents in my company write about 150-200. But there is only a handful doing this.

I guess my reasoning is, is there competitive areas in my state that I could do well in, as opposed to the standard 50 miles from my office.

I acquire about 30-40 new households a month. Non of them in the past 15 months have ever come to my office. Not kidding, 0.

My company has 12,000 location in the US. They would have to pass 20 other offices to get to my office.

So does location really matter? Or is the mindset changing because of direct writers and online sales.

I have a few customers a month that just sign up on my website and I don't even talk to them.

I'm just trying to prepare for the next 10 years.

 

[djs]

I understand a competitive area and wanting to work it. That makes sense to me.

I also understand that people don't want to come into your office, but at the same time, they do business with you because they can come to your office, not because they will. This is why the P&C agency model still works well. If it wasn't for this, every carrier would go direct for personal lines.

My warning is simple. Don't spread your marketing to thin. Keep it relevant and focused. Its easier to be seen in your hometown then it is in other 'distant' towns. Doesn't mean you can't market outside your town, you just have to find ways to stand out, it becomes a bit more of a struggle.

Good luck.

Dan

 

[insurance1822]

I have a feeling you're a captive. When I was shackled as a captive the business model is churn & burn as many leads as you can (telemarketing & internet.) If you're an efficient office there's a chance you'll be maxing the available leads from your subsidized vendors. The decision then becomes "Well right now they can't provide enough leads to feed my staff at full bore so buy zip codes further out to keep the quoting volume up." I never went that route just because I wasn't the decision maker at the time. I also was never comfortable just because I didn't know pricing outside of my market. Would that have changed the bottom line close rate? I never found out. I'd have to guess it wouldn't have much.

As an Indy who can close pretty much every single piece of business he gets w/ a referral system, I'd be concerned about leaving my market. I know my market inside & out & that contributes to my success. For an agent model who churns/burns leads like a machine...I don't see why not? If anything the close rate may drop slightly BUT if you're still seeing an ROI then who cares? By in my slave days the market next door had premiums 2x that of ours BUT our agency principle never wanted to expand so I never found out.

My vote is try expanding on a small scale & measure your close ratios. If that litmus test proves successful...keep on keeping on!

And w/ regard to retention...they can visit any captive office to ask questions or pay bills. With Allstate the agent has to sign off if a client wants a knew agent, otherwise the original writing agent still gets paid. So in that model...write the business across the state & if they want an office to go to? just casually mention the closest office to them. You may lose 1/10 who take your quote to the nearest office..but again...I still think it would make business sense.

Speaking of what makes business sense...why r u captive?

 

[zacharyp]

The agency that I am currently part of does very something very similar to what is being discussed; we write business across the state. Our target market is young professionals who could be facing a host of life changing events. We lead with the auto and look to account round either on initial interaction, or later on in the policy term.

Business has been good and we are still tinkering with our model, but our model has been very effective. We don't operate in a classic retail space, and are actually very difficult for walk-ins to reach (though we've had a handful in the last few months). Nearly all our business is done over the phone or electronically. And yes, we are an independent agency.

 

[Heather]

My drivers were made up of a lot of poorer people who got huge tax returns and bought a car for the first time or for the first time in a long time. They did not know how to drive in the snow, the cars were clunkers that died or they got repo within a year or less. It was great at first. Then at one point it was like we were losing customers left and right for these reasons and non-pay.

I should ad, I am an Indy , no leads from any carriers or advertising so I take what referrals that come my way even if they are 4 hours away from me.