Take the Harford "Agent's Challenge"

[ins-atty]

Before you sell another Hartford auto policy, AARP or not, I challenge you to run a quote for your own autos, and then go to www.thehartford.com and get a direct quote. If you are like me, you will find that the Direct rate is at least 10% lower even after deducting for your commissions.

I decided to investigate Hartford Direct after losing a long term Hartford auto client to --- Hartford Direct.

Our client told us that she had a simple question about her Agency auto policy on the weekend, and simply called Hartford at the phone provided with her policy. After some discussion, our insured was transferred to a Hartford Direct sales rep. The rep offered to lower her premium by 27% from $1,232 to $898 by "cutting out the middleman." Our insured purchased the Hartford Direct policy. She sent us a copy of the dec page. Everything was identical except the price.

To confirm that the huge rate differential was not an anomaly, I ran quotes on my own autos comparing agency and direct rates: Direct was $2,683 and Agency was 26% higher at $3,382. I also compared rates for one additional insured: Direct was $862 and Agency was 47% higher at $1,264. Hartford Direct was 3 for 3 in offering rates significantly lower than ours, even with the commission taken out.

With such a rate disparity, I cannot rationally place my own auto insurance with my own agency through Hartford. How can I justify placing any of my insureds with them?

I have one more challenge to Hartford agents: Go to www.hartford.com right now and take a look at the website that many of you have linked to your own websites, as our agency does. By far the most prominent feature is "Request an Auto Quote" to get a Direct quote from Hartford. By sending your clients there, you are effectively sending them to the competition. You might as well link your webpage to Geico for their "lowest gas prices in your area" feature.

Speaking for myself, I am ashamed to admit that my own webpage has been linked to www.thehartford.com for years. I will correct this immediately.

[agent14]

I don't know why all agents, once given this knowledge, don't immediately roll their Hartford book to another carrier... Bad enough if you have to compete against some of these companies directly. Quite the other thing if they are competing direct, and offering a much lower rate than what they allow the agent!

[etimer]

Solidifies my belief that most insurance companies selling auto & home are nothing more than street walkers and if they can save a dime, they will sell you out in a heartbeat. Years ago I used to argue with people who spoke about economies benefited from cutting out the middle man. I'd ask who is the middle man and most people gave the incorrect answer. My point was that the middle man is the middle class so if you support killing off the middle man you also support killing the middle class.

It was an argument that is very old, going back to the mid 1980's. Many (most) of the people that supported the kill off the middle man eventually lost their jobs because someone killed their middleman jobs. Their jobs were sent off to far away lands such as India, China, etc.

So we that want to stay in the insurance business will need to keep moving into areas that the insurance companies can't just ask a few questions and then quote. For me that haven has been mid-large commercial construction insurance, the stuff that takes time to gather info to quote; the stuff that the average person doesn't understand enough to even gather the info for a quote. The stuff that needs constant servicing such as reading contracts and preparing certs that will satisfy contract requirements. The ACA killed off some agents book of business, the Hartford direct program will be killing of some agents book of business and we are running out of space.

Now that I know this I will not write another Hartford policy and I'll start moving clients. Within recent years didn't Hartford cut commissions.

Poor Hartford, I am sure something must be done to help the people out on page 53 - link below is for a PDF download of the 2014 proxy statement

Summary Compensation Table
The table below summarizes the total compensation paid or earned by the NEOs for the fi scal years ended December 31, 2011, 2012 and 2013. The table reflects total compensation paid or earned beginning in the later of the fiscal year ended December 31, 2011 or the year an individual first became an NEO.

http://phx.corporate-ir.net/External.Fi ... lwZT0z&t=1

If the link above doesn't work --- try this one

http://ir.thehartford.com/phoenix.zhtml ... 54&p=proxy

Before you sell another Hartford auto policy, AARP or not, I challenge you to run a quote for your own autos, and then go to http://www.thehartford.com and get a direct quote. If you are like me, you will find that the Direct rate is at least 10% lower even after deducting for your commissions.

I decided to investigate Hartford Direct after losing a long term Hartford auto client to --- Hartford Direct.

Our client told us that she had a simple question about her Agency auto policy on the weekend, and simply called Hartford at the phone provided with her policy. After some discussion, our insured was transferred to a Hartford Direct sales rep. The rep offered to lower her premium by 27% from $1,232 to $898 by "cutting out the middleman." Our insured purchased the Hartford Direct policy. She sent us a copy of the dec page. Everything was identical except the price.

To confirm that the huge rate differential was not an anomaly, I ran quotes on my own autos comparing agency and direct rates: Direct was $2,683 and Agency was 26% higher at $3,382. I also compared rates for one additional insured: Direct was $862 and Agency was 47% higher at $1,264. Hartford Direct was 3 for 3 in offering rates significantly lower than ours, even with the commission taken out.

With such a rate disparity, I cannot rationally place my own auto insurance with my own agency through Hartford. How can I justify placing any of my insureds with them?

I have one more challenge to Hartford agents: Go to http://www.hartford.com right now and take a look at the website that many of you have linked to your own websites, as our agency does. By far the most prominent feature is "Request an Auto Quote" to get a Direct quote from Hartford. By sending your clients there, you are effectively sending them to the competition. You might as well link your webpage to Geico for their "lowest gas prices in your area" feature.

Speaking for myself, I am ashamed to admit that my own webpage has been linked to http://www.thehartford.com for years. I will correct this immediately.

[Love this game]

Some of us need to retire.

I’ve been doing this for 27yrs now and people seem to get grumpier and grumpier. Maybe my perspective is just a little different as I worked on the carrier side for 15yrs and now 12yrs successfully in the IA world. This is not a “Hartford” issue; almost every carrier has a different pricing structure for direct and independent. Makes sense. I have had this happen to me a few times, too. And I kicked and screamed until I realized a) waste of time; b) I can get them back (and I did – yeah, more work) and c) almost each time there was something that caused it, like a speeding ticket dropping off. Many customers know the 3-year rule for tickets and claims and they start shopping.

We are our own worst enemy. Many of us chase price so much (“Mr. Jones, I’ll shop 5 carriers and get you the lowest price I can and then I’ll look for you again at renewal.”). We are playing into the hands of the GEICO’s, eSurance’s and Progressives of the world.

As far as rolling a book, Hartford, or any other carrier, will subsequently market to these customers so you risk losing these sames customers right back to Hartford (or Progressive Direct, or Travelers, or Safeco, or Met, etc) anyway. Dumb and short-sighted.

You can waste your time with the “Challenge” - I’ll spend my time protecting my own book by selling ME, my team, and our values. Unless you plan on leaving the IA business, this is reality and not just for any one carrier. Adapt or die. Whining does nothing.

Just wait until Wal-Mart and Google Insurance REALLY get going…with the same carriers we have. They will probably sell the same product and accept less commission for it. Are you going to cry about that, too? Retire.

[ins-atty]

Love this game:

1. Assuming that you like Hartford the best for your auto insurance, and given that you are good at selling yourself, would you really place your own auto insurance with your agency and pay 25% more for identical coverage with the same insurance company?

2. Do you think it's a good idea to have a link from your webpage to a company that is trying to sell auto insurance to its visitors? I'm sure Hartford pays good money to Google for "clicks." Isn't it nice for Hartford that we provide the "click service" for free by sending our insureds there?

This is nothing about whining; it's about being smart about the carriers we choose to represent and being smart about how we interact with those carriers.

[lonestar]

LTG, my, you have a cavalier attitude.

Actually, I disagree with you. This IS a Hartford issue, and is an issue with every company that openly bones the agency channel. Yes, Progressive has a different rate structure for direct vs. agent. However, they do not jack up the agency channel rate by 27% to intentionally fornicate the agency channel. Progressive has the direct side that has a rate based on it's operating costs, and they have a rate for the agency channel based on it's operating costs. Sometimes the agency channel is less than the direct rate, and sometimes the direct rate is a little less than the agency rate. I rarely see more than a 3-5% variance between the two. The direct rate is not consistently 27% to 40% less than the agency rate. Judging the facts about Progressive's rate structure for direct and agency channel, it tells me that there should never be a significant actuarially based justified reason for a direct rate to be 27% less than the agent rate. Period. End of story.

Referring to an agent as dumb and short-sighted, for wanting to divorce a cheating spouse, is actually a dumb and short-sighted statement in and of itself. If you find out that your wife is cheating on you, and you simply roll over and let it continue, and allow your justification to be that, "oh well, there is nothing I can do anyway, I'll let it continue", then you are getting what you deserve. The agency force still accounts for about 70% of all personal lines premium, so the agency force can actually fight back if they choose to do so. Whether they choose to do so or not, is an entirely different argument.

LTG, if you no longer have any fight left in you, and you would rather roll over and ride off into the sunset, that is fine. But I think you are in the wrong to call agents "whiners" and "dumb" when they call out a company for what it is.

Since you are obviously not bringing any value to your agent brethren, I don't think the agency force would be at a loss if you decided to go ahead and retire.

[ocbroker]

Some of us need to retire.

I’ve been doing this for 27yrs now and people seem to get grumpier and grumpier. Maybe my perspective is just a little different as I worked on the carrier side for 15yrs and now 12yrs successfully in the IA world. This is not a “Hartford” issue; almost every carrier has a different pricing structure for direct and independent. Makes sense. I have had this happen to me a few times, too. And I kicked and screamed until I realized a) waste of time; b) I can get them back (and I did – yeah, more work) and c) almost each time there was something that caused it, like a speeding ticket dropping off. Many customers know the 3-year rule for tickets and claims and they start shopping.

We are our own worst enemy. Many of us chase price so much (“Mr. Jones, I’ll shop 5 carriers and get you the lowest price I can and then I’ll look for you again at renewal.”). We are playing into the hands of the GEICO’s, eSurance’s and Progressives of the world.

As far as rolling a book, Hartford, or any other carrier, will subsequently market to these customers so you risk losing these sames customers right back to Hartford (or Progressive Direct, or Travelers, or Safeco, or Met, etc) anyway. Dumb and short-sighted.

You can waste your time with the “Challenge” - I’ll spend my time protecting my own book by selling ME, my team, and our values. Unless you plan on leaving the IA business, this is reality and not just for any one carrier. Adapt or die. Whining does nothing.

Just wait until Wal-Mart and Google Insurance REALLY get going…with the same carriers we have. They will probably sell the same product and accept less commission for it. Are you going to cry about that, too? Retire.

Your response is mostly gibberish and doesn't address the issue at hand. "Selling ME, my team and our values," as you so generically state doesn't account for the fact that personal lines agencies who have large Hartford books are clearly at risk for cannibalization. Maybe we can change Hartford's behavior - maybe we can't. But I think any producer who isn't making preparations based on their carrier's behavior is doing themselves a huge disservice. Kudos to the original poster for bringing this issue to light to the agency community at large.

[Smalltownagent]

LTG, my, you have a cavalier attitude.

Actually, I disagree with you. This IS a Hartford issue, and is an issue with every company that openly bones the agency channel. Yes, Progressive has a different rate structure for direct vs. agent. However, they do not jack up the agency channel rate by 27% to intentionally fornicate the agency channel. Progressive has the direct side that has a rate based on it's operating costs, and they have a rate for the agency channel based on it's operating costs. Sometimes the agency channel is less than the direct rate, and sometimes the direct rate is a little less than the agency rate. I rarely see more than a 3-5% variance between the two. The direct rate is not consistently 27% to 40% less than the agency rate. Judging the facts about Progressive's rate structure for direct and agency channel, it tells me that there should never be a significant actuarially based justified reason for a direct rate to be 27% less than the agent rate. Period. End of story.

Referring to an agent as dumb and short-sighted, for wanting to divorce a cheating spouse, is actually a dumb and short-sighted statement in and of itself. If you find out that your wife is cheating on you, and you simply roll over and let it continue, and allow your justification to be that, "oh well, there is nothing I can do anyway, I'll let it continue", then you are getting what you deserve. The agency force still accounts for about 70% of all personal lines premium, so the agency force can actually fight back if they choose to do so. Whether they choose to do so or not, is an entirely different argument.

LTG, if you no longer have any fight left in you, and you would rather roll over and ride off into the sunset, that is fine. But I think you are in the wrong to call agents "whiners" and "dumb" when they call out a company for what it is.

Since you are obviously not bringing any value to your agent brethren, I don't think the agency force would be at a loss if you decided to go ahead and retire.

*Slow clap*

Great response. Those agents that continue to say, "It's fine if you want to cheat on me honey, I'll still bring home the bacon to you." only tell other insurers that they can do it to. Its the same thing with Travelers. Those agents still "in bed" with them and giving them lots of Quantom 2.0 business, are chopping their own legs out from underneath them. I'm sticking my business with those companies that still align themselves with the agent (and more specifically) IA agent channel.

[OldIndyAgent]

I'm curious how they get away with this. Rates have to be filed and they can't charge two different rates based on the same risk. It seems challenging this at the Dept of Insurance and in court via state agent associations would fix this.

Progressive got their hats handed to them back in the 90's for similar dirty tactics.

How do they legally charge two different rates???

[etimer]

You don't see the big picture do you. If I could use charts to show the labor capital / labor efficiency problem that is coming I would do it for You. Just as the laws of kinetics says that it is impossible to reach 100% efficiency it is also impossible to reach 100% economic efficiency. To do so would mean no labor capital would be involved and that would mean little capital in the hands of people.

I was reading an article and they used a phrase that I've liked to use when talking to people about the big picture. The phrase is Intellectual capital. IF you have not noticed we in America and the world for that matter are seeing the growth of a type of aristocracy. We are living in an age that some kid can write some script and become wealthy to the point that it would make any European princes envious, all done without much labor capital. Intellectual capital yes but intellectual capital is becoming more and more a privileged class.

Your answer is to retire? How far can we take the game? Are you prepared to work for the average wage in India of $5 a day? The intellectual capital, the aristocracy has done something that Adam Smith could never have envisioned and that is to move entire companies to lands that are half a world away, have those items produced by what is considered slave labor in their own lands, ship that product back to their native land and have a market for it. This is all well and good but there will be a point in time (I think we are there) that due to lack of capital those cheap goods seem expensive and the local markets are shrinking.

I read about Google's want to enter the insurance business. Their sirens song is they will cut out the middle man. Well is there a fool that doesn't realize that Google is the same middleman as the agent? Ok...let me answer my own question. Yes those fools exist. They are the same people I had discussions with in the mid 1980's and they felt that outsourcing would benefit them with goods and services. Today I estimate that 98% of those people lost their jobs to outsourcing. I can quickly count five people that used to make $200,000 to $300,000 a year but watched their market wither and die. The upscale mall down the road is scored to see one of its anchor stores J C Penney close. Sears is on the ropes. American iconic businesses are on the ropes. SO you have computer business models that are taking the business from JC and Sears? Computer models where you have one computer doing the job of 300 people. How far can we push it?

Sorry I wondered about a bit on the above but I love America but I am watching the middle class die. Agents that post here are probably a good sampling of the middle class.

Back to my intellectual capital rant. Back in the days of the Rothschild wealth, the parents created Trust Funds for the kids. These days the wealthy are more aware that the kiddies can gamble away the trust money. So the parents realize that sending the kids to the expensive schools is wealth that can't be gambled away.

"The wealthy move to pricey neighborhoods with good schools, spend a packet on flute lessons and pull strings to get junior into a top-notch college. The universities that mold the American elite seek out talented recruits from all backgrounds, and clever poor children who make it to the Ivy League may have their fees waived entirely. But middle-class students have to rack up huge debts to attend college, especially if they want a post-graduate degree, which many desirable jobs now require.

None of this is peculiar to America, but the trend is most visible there. This is partly because the gap between rich and poor is bigger than anywhere else in the rich world"

Rolls-Royce has watched their markets grow, Luxury yacht markets grew, capital is consolidating among fewer and fewer hands and those hands can now afford the toys. Bill Gates has more wealth than 140 nations. At least Bill has a good moral compass for philanthropy.

Again and again and again the middle class takes it on the chin. How far can we push it? As some economists predict, are we really ready to deal with a massive underclass citizenship who because they don't have the correct credentials will never be able to rise to the middle class. A unique cast system?

People may be grumpier and they may have good reason. America is not the place it once was and people are slowly waking up to take notice. In my mind it is still the best but history teaches us that everything changes. The old book of Who Moved My Cheese could be rewritten to Who Ate My Cheese.

I wonder if a contractor would allow one of their employees who moonlight's as a carpenter to bid against the same job. That moonlight employee may offer a cheaper bid because he doesn't carry WC, is working under the tax table, etc?

One last thing. There are people that make an argument that it is not good judgment to point to a report that shows what a well paid CEO may be making, such as at Hartford. The argument is that we are supposed to have a blind eye, don't look, it is none of our business, we are just jealous. So are we also to be blind to the fact that if the CEO cares about what we , the agents make? That they care so much that they cut commissions so that Hartford makes more money. I say if Hartford cares about how much I make it is fair that I care about how much the CEO makes or takes.


Whoa......I can go on eh???????

Some of us need to retire.

I’ve been doing this for 27yrs now and people seem to get grumpier and grumpier.

You can waste your time with the “Challenge” - I’ll spend my time protecting my own book by selling ME, my team, and our values. Unless you plan on leaving the IA business, this is reality and not just for any one carrier. Adapt or die. Whining does nothing.

Just wait until Wal-Mart and Google Insurance REALLY get going…with the same carriers we have. They will probably sell the same product and accept less commission for it. Are you going to cry about that, too? Retire.

[gmann1957]

I sent this forum to my Hartford rep in NJ. She showed it to her manager and their reply is below:

Greg
I shared this with my Manager. This article is incorrect. We have a level playing field. Rates are not cheaper direct then what our agents can offer. We remain partnered with our agents. There are even plans in the works that if you choose, clients will be able to quote “micro business”, with The Hartford through your website.

If you'd like to contact her to show her proof, email me at g.heitmann@ipariskmanagement.com and I will send you her contact info.

[ins-atty]

GMann:

I stand by my initial article. I have no reason to lie about Hartford; we do a large volume of business with them. My comparisons are real and we've already forwarded the proof to our rep. His response was basically: "I feel terrible, but there's nothing I can do about it."

I hope that you and all of the other Hartford agent readers will take my challenge and compare the rates yourselves and report back to this thread. Nothing would make me happier than learning that my three comparisons were anomalies.

Finally I love your rep's disingenuous statement that, "We remain partnered with our agents." Take a look at what they do, not what they say. Please go to www.thehartford.com. Try to find one thing on their webpage promoting their "partner" agents. Perhaps she was confused about which "partner" she was referring to. AARP, perhaps? No only does the webpage have any entire section on "AARP Hartford Auto," they also have an entire section on the "AARP Small Business Program."

[lonestar]

gman, I have to side with ins-atty on this one. Actions tell the truth. Words from a company rep mean nothing if the actions do not mirror the words.

Look at what Hartford is doing by their actions, and that will reveal to you the truth. Actions of a company reveal the true intent.

[agent14]

Well, all seems very simple to sort through. If what the Hartford rep in NJ is true, than I am sure that the President of Hartford personal lines would be more than willing to come to this forum and declare that the Hartford direct auto rate and the agency channel auto rate are the same. Waiting....

[volstrike3]

I have no idea why an independent agent would chose to hitch their wagon in a significant way to a national carrier with a direct selling arm when there are so many good regional companies out there. They may still move the cheese but the guys doing it will have to look you in the eye and explain it.