This is intended to be a wake-up call for some insurance companies and all independent insurance agencies. The world of business is changing in more ways than just the Internet. Aggressive businesses in all industries are beginning to realize that the old way doesn't work anymore. You can no longer force your product down the throat of the consumer. The changing consumer and the lightning speed of the Internet have finally brought to fruition a world of mass customization-not only in product, but in service and sales.
Today, companies of all types need to think creatively and act outside the pre-existing box. Many of us have grown up, accumulated wealth, and now demand the service we expect-and demand it our way. Similarly, Generation X (perhaps because it anticipates the demise of Social Security) has proven to be extremely thrifty by investing well. Xers have been demanding it their way from the get-go. If you don't become consumer friendly, you're doomed to failure.
Here's a true story of two companies: Let's call them Apex Insurance and Best Insurance. My vehicles have been insured by Apex for years, and the agent is a close personal friend. Because I like to restore and drive older vehicles from the '60s, I don't fit the limited mileage restrictions of typical classic-car insurers. So I insure them on my regular policy with Apex.
Apex won't admit it, but they don't like to insure specialty vehicles. We typically get into an elongated appeal process (I call it an 'argument') over 'stated value.' In the past, they've worn me down until I finally accept their version of my car's worth. Keep in mind that I said 'stated value,' as opposed to an agreed value, which I would prefer but Apex doesn't offer.
Recently, my 1967 T-Bird was totaled by a driver who carried only California's minimum Liability insurance of $5,000. Due to Apex's stated value of the car (less than half the appraised value), I was unable to file a claim for an underinsured driver and had to absorb the loss.
As a result, I decided that I would not agree to anything less than the appraised value of my 1969 Mercury. After six weeks of continuing negotiation, letters, and appeals, Apex had only offered a stated-value equivalent of 60% of the appraised value-less the $500 deductible, of course. This meant that I would carry an exposure equal to 45% of the vehicle's true value. My agent/friend is investigating various other coverages that might be available. However, they would require two companies and loss of all multiple-car discounts.
In the interim, I received an AARP/Best mailing offering a 10-minute quote on my Auto insurance. Noticing a line on the application questioning the 'classic/antique' status of any cars, I went to its Web site for an AARP Quote-On-Line.
My only frustration was that the Quote page did not want to work on Microsoft Explorer, but it worked fine with Netscape. Other than that, the experience was smooth.
As I began filling out the online application form, there were instructions to 'click here' if my vehicle was not listed. I did and got a screen asking if I wanted to continue on the telephone with a service representative. I said, 'Yes,' and was transferred to an interactive phone page. I typed in my phone number, hit 'send,' and my phone rang immediately. A computer voice indicated that this was my requested callback from Best, and that a service rep would be with me shortly. Within about 30 seconds, a live person was on the phone with me.
I explained that the Internet application did not list my car, and she verified my name and AARP number. (She also asked permission to call me by my first name, which I thought was a nice touch.) To make a long story short, Best was more than willing to match the 'stated value' with my independent appraisal on the Mercury, and asked if I wanted to wait for a quotation over the phone that might take a couple of minutes. She then came back quoting the coverage I wanted at a savings of more than $200 per year and guaranteed for 12 months, not six.
When she asked if she could write the policy now, I said that I preferred to see the written quotation first. She complied and added, 'Why don't I include applications for both Homeowners and Business insurance as well? I'm sure there are some additional savings if we insure your vehicles, your business, and your home.'
My hat's off to Best for a Web site that combines effective use of the latest technological tools, speed, and the human touch. It's one of the most seamless interlacing of high tech/high touch that I've encountered. And the written quotation that I received was six easy-to-read pages. It was the most thorough Personal Lines Auto quotation I've ever seen.
If you represent a company similar to Apex, there's a happy ending for the independent insurance agent. After using the Best quotation as leverage in a letter I wrote to the president and some serious negotiation by my agent, Apex finally agreed to a 'stated value' equal to the independent appraisal. I, in turn, opted to pay the $200 plus penalty and let my friend keep my business. In going with my original company, I may be unusual; most people would probably give their business to Best. After all, it took Apex nearly two months to do what Best did in 10 minutes and at a lower cost.
This experience brings some questions to mind: How can companies like Apex expect to survive by forcing clients to fit their mold, as opposed to striving to adapt to their customers' needs? Since Best so effectively uses technology for its AARP program, why hasn't this same technology been used for, and made available to, its independent agents? When will independent agencies realize that they can offer this same service on their Web sites, combining it with the unique marketing ploy of comparative quotes from the companies they represent?