Plymouth Rock’s President & CEO Chris Olie On Why Mass. Agents Should Be Excited About Prime
This month, Boston’s own Plymouth Rock Assurance Company announced the arrival of “Prime” a new auto insurance product that aims at nothing less than changing the auto insurance life cycle for consumers. As for what Prime can offer agents, Plymouth Rock believes this new product will allow them to bridge the gap in order to better compete with national direct writers while still offering the expertise and intimacy that consumers look for in an independent agency.
To get a better idea of the particulars behind Prime, Plymouth Rock President & CEO Chris Olie chatted about the possibilities that this new auto insurance product can offer the independent agents of Massachusetts.
Plymouth Rock’s new auto insurance product Prime debuted this week. How did the idea for this new type of product come about?
Prime is the culmination of a couple of years of research and development on our part, both from a system standpoint and also taking a look at consumer buying trends over the years. We piloted a version of what we used to call hybrid distribution capabilities where consumers have been able to come to our website at PlymouthRock.com, get a quote and buy a policy, and we in turn turned those policies over to our independent agents.
At the same time, in the last year and a half, we’ve built up a nice new book of business through an exclusive relationship with AARP. We are the authorized auto and home insurance carrier in Massachusetts for AARP members. Through that relationship with AARP, we’ve built on some of those same capabilities of being able to close business through an agent, through a call center or online.
Industry statistics show that close to 90% of consumers who bought auto insurance in the last year started their process online, according to a report from McKinsey. It’s no different than any industry these days. People want to start the buying process online, gather information, and in some cases, get quotes. But in the case of auto insurance, they often would prefer to close with an agent.
Looking at those trends and what was being offered in the marketplace, we noticed there was somewhat of a divergence going on with direct writers offering a great online experience and the convenience and ease of use that’s associated with shopping online. On the other side are the independent agent carriers, who offer advice, local counsel and choice. We recognized that there is a gap between those two experiences that we’re trying to fill with this new capability we’re calling Prime.
A new feature that we’re launching with Prime is an emphasis on independent agents being able to grow their group and affinity business. The process works the same way: a consumer can come to our website and get a quote with an even better-quoting engine than we used to have. It’s more user-friendly and it’s faster. If the consumer buys online, those sales get turned over to an independent agent. If they don’t buy, their quoting information is also turned over to an independent agent to follow up.
In addition, we’re expanding this feature and offering it to agents who have relationships with employer and affinity groups. It’s similar to what we did with AARP, but we’re opening it up to all of our agents. If you’re an agent with an employer or affinity group, we can build a co-branded quoting engine that can reside on that employer’s private Intranet and become a 24 by 7 sales machine.
How long did it take to develop?
Prime is the next evolution of the systems that we’ve been piloting for a couple of years now. The technology and the ease of use have improved. The lessons we learned from AARP have all been incorporated into Prime. At the same time, we’re introducing a new product with new coverages, discounts and an improved agent interface.
That’s interesting. When you’re talking about the groups and affinity groups, what you’re looking for are affinity groups you already have, and also ones that agents may independently develop on their own?
Absolutely, that’s what we think is the real attraction. Like most companies, we already have a number of groups that we offer discounts to, but the fact is that independent agents really control the commercial market with roughly 85% market share. Many of them have relationships with big companies or other affinity-type groups on the commercial side, but it has been a challenge to penetrate those same businesses and groups on the personal line. With Prime, they can bring these groups to us and we can build a co-branded quoting engine and support it with marketing efforts on our end to drive traffic. It’s sort of a closed loop where our agents get the business and all the associated leads that are generated. It capitalizes on the things that we do very well and the things that they all ultimately do very well.
Is there a particular minimum size of the proposed affinity group or employer group that you’re looking for? I mean, obviously, it’s not a local pizza shop.
We aren’t putting a specific limit on it, but there are some fixed costs involved in setting up the back end. It will likely work better for medium to large sized employers or affinity groups but again, we aren’t putting any restrictions on the program right now. I think a key to success is that the employer or affinity group has a website that its members or employees would commonly go to for information. That’s where the quoting engine will live and we’ll promote visiting that site through our marketing efforts.
We think this is a great consumer value proposition because it’s one-stop shopping. Consumers can come to our website and end up with multiple quotes from multiple companies if they don’t buy from Plymouth Rock and decide to instead buy through an independent agent. And it’s also great for the agent in terms of being able to compete with direct writers by capitalizing on Plymouth Rock’s strengths like online sales, marketing support and a call center.
If you accept the offering that an agent has in the employer … I’m going to say it’s an employer or affinity group that has a website… Plymouth Rock is going to bear those costs or is there a cost-sharing arrangement with the agency?
We bear all the cost in terms of marketing the program, building the website, providing the call center support. When we sell a policy on the agent’s behalf, they pay us a one-time marketing fee. At that point, they own the business and will receive full commission on it. They can cross-sell it, upsell it or move it if they have to. We obviously prefer they don’t, but it’s their business just like any other piece of business they own.
You charge a one-time marketing fee for getting the business, but do you then keep it in the service center or does it go depending upon whether the agent uses the service center you have or does it themselves?
The business goes to the agent at that point. We have a small service center that we’re growing as a part of our offering. The large majority of our business does not go through our service center and I would expect the large majority of this business wouldn’t either, but it’s up to the agent.
Can the agent, also, put this quoting engine on their website too?
Yes, they can. Some agents have, in fact, done that. They can put a link on their website that has the Plymouth Rock quoting engine.
With regard to Prime, are there any additional contract provisions or endorsements that go on the agency contract or does it just continue as a service under the agency agreement as it exists?
There are no modifications to the agency contract involved.
It seems that Prime is in direct response to trends that Plymouth Rock has observed with its own website and consumers?
Clearly, the trends show that more and more consumers want to start their shopping process online. In fact, more and more people are buying online, although it’s still a small minority. The data shows that even though the majority of people like to start shopping online, it’s a minority of people who actually do everything, 100%, online. Many start online and then get transferred to a call center to close the sale.
We have seen that same trend with the piloting we had been doing. You need a good online capability, but you also need a state of the art call center to support it. We’ve been developing those capabilities for the last couple of years. The light bulb went off for us with the success of our AARP Program which has a co-branded quoting engine. We recognized that we could replicate this for lots of other groups which is a market that independent agents control.
It’s just a great way for agents to compete with the direct writers out there that, unfortunately, are gaining share here in Massachusetts.
Independent agents interested in learning more about Prime who are not Plymouth Rock-appointed agents, can contact Gary Sjolin. firstname.lastname@example.org.
Going back to the channel with the employers and the affinity group. Are you going to be developing any other channels? I mean, everywhere you go, even to the registry, you see GEICO or Liberty Mutual, so I’m just wondering if you’re going to be doing the same type of Internet advertising for this or is it going to be focused on the agents developing potential consumer points of access?
That’s a very good question. Right now we see a big opportunity as we have been talking about from an affinity and employer group standpoint. We are constantly thinking about how to expand the capability and I wouldn’t rule anything out. But there is no specific plan at this point in time.
Are you going to do any print advertising or traditional media advertising about the product to educate consumers about this opportunity?
Yes, we do. We’re looking at every channel to help market these offerings. At the individual agent/employer group level, the plan is to work with the agent to develop a marketing plan to penetrate each group. In addition to building a quoting engine, we’ll be talking with the agent about potentially running a direct mail campaign on their behalf. If an agent has an employee list, we can use that to send emails with an explanation about the program and again, a link to the quoting engine. There are a variety of ways we intend to help promote this.
Will you have maybe not training programs, but sort of seminars to educate agents about how to maximize the product?
Actually, we have had a series of big agent meetings over the last three weeks that we invited all our agents to attend. We have already had a meeting in Peabody, one in Sturbridge, and in one in Boston. In addition to those meetings where we walked through these offerings, we’ve held a series of webinars and are continuing to do that as we speak.
What has been the initial feedback about Prime from your agents?
The reception has been very good. We are literally getting applause at some of our meetings and hearing from our agents that “Hey, this is great stuff!” People come up to us after the meetings and tell us “I’ve got four groups I’m thinking of right now that we should try and do this with.” We are quickly accumulating a list of opportunities to follow up with our agents.
That’s great. Looking at the actual logistics of Prime, if a consumer goes onto the PRAC site to get a quote, how do you assign the agent? How does a consumer connect with an agent?
In the piloting work we have done so far, it has been based purely on the closest proximity to the consumer using GPS coordinates. For those agents who are participating in the pilot, which was not necessarily linked to affinity groups, it was more broad-based. With this new capability focused on affinity groups, it is a closed loop, meaning that if ABC Agency has brought us the group, all the business goes to them. It’s generated from the co-branded quote engine in that case.
If you were speaking directly to a Massachusetts independent agent, what would you say is the most interesting thing about Prime and why they should be interested in this product?
To me, what is most interesting is that this is a unique capability that we don’t think anyone else in Massachusetts is offering. This is an ability for agents to compete in the online space with direct writers. While some other companies have the ability to provide at least a quote, no one has put together this full capability to have quoting and binding, along with leads all returned to an agent. We are pretty excited about the possibilities it poses.
For any agent who might not be part of this program yet, what do they do? Is Plymouth Rock looking for agents? If so, what is the ideal profile of an agent that PRAC is looking to appoint?
Good question. We are continuing to appoint a small number of additional agents. Agents that are particularly intrigued by this should get a hold of us. For existing agents who might have groups in mind, they can contact their Plymouth Rock marketing representative.
Other agents that are interested in learning more about Prime who are not Plymouth Rock-appointed agents, can contact Gary Sjolin at email@example.com.