A couple of weeks ago, MassDrive, an independent insurance agency based in Boston, announced the debut of their own proprietary online quoting tool. An independent agency creating its own proprietary online tools? Our interest was piqued. We figured if we wanted to know more about how this independent agency was harnessing the power of the internet to drive its organic growth and success, our readers would be too. Here is what we learned.
Bill Suneson, founder of MassDrive, opened his agency in 2009 at the start of “Managed Competition” precisely because of the benefits that he believed auto insurance deregulation in Massachusetts could bring to independent agents. And while many agents bemoan the arrival of direct writers in the Commonwealth, MassDrive welcomes the competition, believing independent agents actually have the upper hand over direct writers.
How did you get into insurance?
I actually began my career in Human Services at Goodwill Industries. After working at Goodwill for about five years, a friend of mine bought his father’s insurance agency in 1994 and asked me if I wanted to come and help him out. I didn’t know anything about insurance, decided to transition into insurance.
I became a producer and began working in the managed care workers compensation business. After spending close to 5 years in a traditional agency environment, I joined a national affinity marketing firm in Wellesley and helped launch their group sponsored auto insurance business across the country. The company was a national leader in affinity marketing which provided me an opportunity to expand beyond insurance for a number of years.
What was the inspiration behind starting MassDrive? When was it founded?
The deregulation of auto insurance in MA in 2008 was the inspiration for MassDrive.
After developing national affinity programs and observing how competitive auto insurance was in other states, it was clear deregulation in Massachusetts would create a great opportunity for technology and marketing innovation. I never gave up my insurance license and always wanted to get back into the agency business so the timing was right
The company was founded in late 2008 and went live in the summer of 2009.
Do you start it the company yourselves or did you have investors?
We initially launched MassDrive as a subsidiary of Next Generation Insurance Group (NGI), a national affinity and collegiate insurance agency my business partner John Fees and I created in 2008 without outside investors. Along with our partner and company President Jean Marie Lovett, we boot strapped both businesses for two years before taking on an angel investor in MassDrive and separating the companies. We later took on separate investors in the NGI business but the MassDrive business has really been built with the time, investment and commitment of a great group of colleagues.
How big is your agency now?
The agency has seen substantial organic growth each year and we’ve been told by some of our carrier partners that we are the fastest growing agent in the state. Our agency has grown over 50 percent per year over the last six years and we continue to grow if not accelerating our size.
What kind of traffic do you get to your website? About how many people visit a month?
We drive thousands of new quotes each month through our websites.
Has your growth been mostly organic or through acquisitions?
Organic. We have not acquired anyone. While we looked at the possibility of growing by acquisitions, we ultimately decided it was not a good fit with our business model. We work primarily through strategic partnerships and affinity groups to get the business. We have considered and are considering some broad based market initiatives as well.
Essentially, we have a really easy to call to action, which has been the key to our growth. We are not buying leads, we’re generating new customers from our easy call to action and from our strategic partnerships. We have created a technology infrastructure that allows us to support national partners in the in Massachusetts market.
You have another company named NexGen, how does that interact with MassDrive?
As I mentioned, we created Next Generation Insurance Group (NGI) around the same time to serve the college and young adult markets. The two companies have a Shared Services Agreement and work closely together on technology, HR, and Agency Operations. A good example of the shared services is MassDrive provides the sales agent support for GradGuard.com and its national college renters insurance program built by NGI.
Why have your agency sell insurance online and by telephone only?
We believe consumers want to be able to buy online and do so conveniently. Consumers expect technology and that is what they are asking for. Studies show 71 percent of consumers shop online with most getting a quote in three different places. While some customers are still going to walk in to a traditional storefront [to buy insurance], the growth and opportunity is in getting to consumers shopping online.
We don’t have the luxury of the storefront, and I am not sure over time agents are going to continue to get the same foot traffic [to support their agency.] If you look at the direct writers, we’ve built our marketing and technology mirroring the customer experience they provide and that is why we are growing.
So I challenge other agents to do the same. Look at the national comparison sites and learn from them.. Compare their online experience to yours and see the things they are doing right.
All of the research has shown and our model has proven, consumers do shop online for insurance and we provide the value of a traditional agent with the convenience they have come to expect from direct writers. We do so with personalized digital utilities supported by licensed agents on the phone.
What types of insurance do you sell? How do you deal with payments and security of information and the like if people can’t come by the office.
We sell personal lines insurance and have primarily focused on auto/home and other ancillary products. We are PCI compliant, use esign and meet all of the security requirements of our partner carriers.
Do you have licensed agents that work for you?
Yes, we have licensed agents on the phone that respond to quote requests, service policies and cross-sell other products. We also have extended hours and take calls until 9:00 pm M-F and 10-5 on Saturday. Again, we try to meet the needs of consumers and many people prefer to deal with their insurance after work hours.
Does MassDrive operate as a traditional storefront agency? Do you agents at the agency office or remotely?
While a couple of our agents work remotely, the rest work out of our office. We don’t have a storefront model for our agency, although we have had a couple of people who have stopped by our office in person. We are an independent agency that has built the same platform as a storefront agency online; we do the same thing any other agency does just digitally and on the phone.
What about afterwards, do you service your insureds policy as well?
If you had asked me that question 60 days ago, if we serviced all of our own policies, I would have said yes. This past month, however, we have begun transferring service to some of our carrier service centers and are moving in the service center direction.
MassDrive now uses the service centers of some of its eight carriers in Massachusetts. The carriers do an excellent job in servicing the accounts after they have been marketed and sold by MassDrive. They can provide real value to agents as they have invested in the technology and provide a compelling business model.
Your agency is one of the more technologically advanced, what has been the most successful tool MassDrive has created? The least?
Initially the online user experience we created for consumers to get a quote was the most successful tool. However, the affinity infrastructure we’ve created over time has proven to be the most valuable. The least successful initiative was moving to a traditional agency management system which proved to be too costly and did not serve our customer or business needs.
Most agents would imagine these things to be cost prohibitive, have you seen a return on creating these tools?
Absolutely, and we will continue to invest in technology.
Do you have an in-house tech team that creates your proprietary tools or do you outsource them?
We have our own in-house tech and design teams and they amaze me every day.
Your latest has been the MassDrive online quoting tool, how did that come about?
Consumers in other states have been able to compare rates online for several years and our mission has always been to provide MA drivers with the same opportunity. Utilizing Boston Software’s comparative rater, we built our own API over their carrier rating engine to better manage and control the consumer experience. Boston Software has been a great partner in this initiative and we could not have done it without their support and innovation.
Why create your own online tool when Trusted Choice has one as do other insurers like Plymouth Rock, an insurer you represent?
Our business model drives a call to action for consumers and we prefer to control the customer experience. We applaud Trusted Choice and Plymouth Rock for their efforts to enable agents to build online quoting options.
How do you see your company faring against other online only insurers, the majority of whom are direct writers like GEICO, particularly since your company started during the transition to “Managed Competition”
We are well positioned to compete with the direct writers since we provide consumers with the choice and personalized service of a traditional independent agent AND the digital tools they have come to expect from leading online companies.
What are your plans for MassDrive in the future?
We have aggressive plans to continue to grow in Massachusetts through strategic partners and some broad based initiatives. We have also recently expanded outside MA with the launch of MyLifeProtected – Auto, a national comparison shopping site built for affinity partners at mlpauto.com.
What would you say to other agents interested in developing their own tools and becoming more aggressive in online insurance selling?
When you look at the value independent agents, they really represent the future of insurance. Agents are in a strategic position to not only survive but thrive in the Internet environment. We [independent agents] represent multiple carriers for auto and home insurance, as well as provide individual service and counseling for insurance. They should embrace technology and acknowledge the Internet provides enormous opportunity to demonstrate the real value of the independent agent.
The value proposition of the independent agent is terrific and so for them it is how to take that value and apply it. We are an independent agent and we are one of them. Agents should consider all the options that they have.
The next generation of consumers will demand personalized digital utilities, convenience and agent expertise, which requires a commitment and investment in the future. In the coming months, agents should expect to see more national online comparison sites entering Massachusetts and they will be viable competitors. These companies are also independent agents that have done a great job demonstrating the value of choice and thoughtful consumer experience.
The most important thing for agents to realize is that the customer service experience is one that they have to work at. Look at the direct writer sites and run them for the purpose of showing how these interfaces provide a complete and simple in‑service for customers. Look at the Internet comparison sites and at MassDrive and see how it works and how it provides a good experience for customers. It is important for agents to develop their own service package that makes it easy for customers to use the Internet.
We [independent agents] have a huge advantage, it is just figuring how you use that advantage with the next generation of consumers.