Victor Pepin is the Regional General Manager for Safeco and the man in charge of bringing the company into the Massachusetts insurance marketplace. He spoke with Agency Checklists about Safeco’s decision to enter Massachusetts and what that means for independent agents.
Why did Safeco decide to enter the Massachusetts auto market at the present time?
As you might know, Liberty Mutual has been writing personal lines through Independent agents in Massachusetts on the Peerless Insurance platform since July 2008. So we have been in the state, as Peerless, since that time. In that same year , however, Liberty Mutual acquired Safeco, and made the strategic decision to sell all of its personal lines through Safeco on a countrywide basis.
As for the timing of Safeco’s entrance into Massachusetts, the market is more competitive now with managed competition. It also is heavily controlled by independent agents and because Safeco markets its products only through the independent agency system, this makes Massachusetts an extremely attractive marketplace for us.
So this is a change of form for Safeco?
It’s a substantive change, absolutely. We had to build the Safeco platform here from scratch and file all new products, which took some resources to build out.
And as of today what is Safeco writing in Massachusetts by way of products?
In entering the Massachusetts market, we decided to go with a big bang launch and will offer all available Safeco products, except for Landlord Protection.
And what are those products?
Auto, home, motorcycle, watercraft, classic car, recreational vehicles, renters insurance and umbrella.
Does Safeco basically require the complete account or can any of these products be written on a monoline basis?
Our plan in Massachusetts is to offer a multi-line platform where we prefer to write as much of the account as possible. We know, however, that there are situations where that is not possible and all of our specialty products are available on a standalone basis. I should also mention that we require the underlying auto to write an umbrella.
What would you say are the key features and benefits for agents in selling Safeco’s products?
Safeco’s value proposition for agents is to be fully focused on independent agents, provide the scale and breadth of a national carrier but remain local in the market, provide stability and consistency to our agents and policyholders, invest in technology and services to make it easy to do business with us, and provide a very broad range of personal lines products, including a full suite of specialty products.
As you know WinRater is what most MA agents use. What is Safeco’s status with WinRater as well as Real Time?
Currently, Safeco is available on a real-time basis for auto with Winrater. Home and Motorcycle will be coming soon on real-time basis. We are also available on real-time basis with several other rating vendors.
Are there any additional services that Safeco offers that Mass. agents might like to know about?
Presently, we are beginning to roll out our Gold Service, where we serve our agents’ customers 24/7 for a small fee. Once we’re confident we can manage volume and staffing smoothly, we’ll offer the service package for the Massachusetts market.
Gold Service allows agents to focus on sales rather than service. We are seeing tremendous growth in this area and expect that this can be an attractive option for an agent to allow them to reduce customer service overhead costs by transferring these routine functions to us since collectively we work with an economy of scale that individual agents cannot match.
Could you tell me of the relationship between Safeco and Liberty Mutual? Obviously, there are independent agents who are interested or concerned when they consider accepting or applying for a contract with Safeco where one of the largest direct writers in the country is the owner of that company. What would you say to them?
Safeco Insurance is a Liberty Mutual company. Liberty Mutual sells through a multi-channel distribution process with Safeco being fully committed to the independent agent channel. Liberty Mutual goes to market with different products and pricing and lets the consumer decide which channel they prefer. There is plenty of business for both sides to grow. We believe that independent agents have a strong future because they provide their customers with choice, trusted guidance, advocacy and tailored coverages. This makes the channel very important to both Safeco and Liberty Mutual.
Speaking of financial stability, how does Safeco measure up as an agency based writer?
Safeco is the third largest writer of Personal Lines insurance distributed through independent agents in the country based on written premium. Nationwide, Safeco is growing very well and has a lot of momentum due to its strong products and services. We are hoping to bring that same market momentum into Massachusetts.
How would an agent who is interested in writing insurance with you get in touch with you?
If an agent is interested in a new appointment with Safeco, the best place to start would be to contact one of our local Territory Managers: Matt Desimone at 508-688-2854 (Central MA); Derik Whalen at 508-244-2281 (Eastern MA) or Kim Hall at 978-660-3168 (Western MA). More information about Safeco can be found on our website: http://www.safeco.com/about-safeco/for-agents].
How many agents do you expect to appoint over the course of the next 18 months?
We’re always looking for good quality agents that can help us grow profitably. At this point our marketshare is relatively low and we’re looking to grow throughout the state.
Some people with a long memory might remember Safeco leaving the Massachusetts marketplace. Now they’re coming back in as are a number of companies. What would you tell an agent who asks about the commitment of Safeco to Massachusetts if the market turns sour again?
When Safeco left the state, it was still an independent company. Since 2008, Safeco has been a part of Liberty Mutual, which is headquartered in Massachusetts. Liberty Mutual was a big advocate for managed competition and that has been a boon to consumers as well as giving agency customers more choices. Liberty Mutual has been historically committed to the Massachusetts insurance market and Safeco entering the Massachusetts market is just one more sign of that commitment.
Are there any particular additional product lines or endorsements that are unique to Safeco that an agent should consider?
We believe that our wide range of specialty products and multitude of coverage options give us an advantage. It would be difficult to list out all the various endorsements here, but more information can be found on our website.
Note: For our readers’ convenience, Agency Checklists found the following information links on the Safeco website for: homeowners: http://www.safeco.com/homeowners-insurance/features; condo: http://www.safeco.com/condo-insurance/features; renters: http://www.safeco.com/renters-insurance/features; auto: http://www.safeco.com/auto-insurance/features; classic cars: http://www.safeco.com/classic-car-insurance/features; motorcycles: http://www.safeco.com/motorcycle-insurance/features; boats: http://www.safeco.com/boat-insurance/features; recreational vehicles: http://www.safeco.com/rv-insurance/features, and, umbrellas: http://www.safeco.com/umbrella-insurance/features. Be aware that all coverages and features reflected on Safeco.com may not be available in MA.
What is the present relationship between Peerless and Safeco? Is Peerless completely gone?
The Peerless brand will continue until we finish converting policies over to the Safeco platform, which will begin during the first quarter of 2014. Agents can still write policies with Peerless until August 22nd. Countrywide, we’ve successfully converted over 500,000 policies to Safeco and have achieved very strong retention as a result good customer communication, minimizing price swings and matching coverages.
So do you feel confident based upon Safeco’s first week in the Mass. marketplace?
As of Monday, June 24th, we have been successfully issuing policies on the Safeco platform. Prior to launching, we had a two-week pilot program where we gave a dozen Massachusetts agents access to the system as we wanted to a final test run before rolling out the new platform. That pilot program went very well and we received positive feedback about our competitive pricing. So overall, we believe we’re in a good place to be successful.