New Players on the Block – YouZoom.com expands into Texas; Progressive unveils homeowners market

Two companies made substantial entries into Texas last week. YouZoom.com will offer Texas agents the opportunity to sell insurance products online. Progressive, which up until now only offered auto coverage in Texas, unveiled its homeowners product for Lone Star agents.

YouZoom.com
YouZoom.com, an affiliate of San Diego, Ca.-based Arrowhead General Insurance Agency, will initially offer auto coverage through Old American and Southern County Mutual. They plan to add additional auto carriers and other product lines, including homeowners and health coverage, in the next few months. Their service allows independent agents and brokers the ability to market, sell and service insurance policies over the Internet.

For an initial fee of $950 and $95 each month, YouZoom will create a website for an agency that will provide instant quotes and binding through YouZoom carrier partners. Agents with existing sites can link to the servicing mechanism. Currently there are 180 agents signed up in California, and the company expects to sign up more than 100 agents in Texas.

Ellen Coffey, communications manager for YouZoom, says the company is on track to write $11 million in online sales in 2001. In 2000, they wrote $3.5 million, but that was before adding homeowners coverage and before expanding into several states.

“I think it’s a matter of showing agents the product,” Coffey said. “There are a lot of companies that say they do the same thing that we do that don’t actually have a product.”

The company, which was launched in 1999, currently represents 10 insurance companies selling personal auto and property insurance in five states—California, Arizona, Washington, Georgia and now Texas. They plan to enter five additional states by mid-year 2001.

Progressive
Progressive, one of the largest auto insurance companies in the state and in the country, unveiled its homeowners product on March 12. Texas is the fourth state where Progressive is introducing homeowners insurance, following introduction of the product in Arizona and Michigan in 2000 and Maryland in early 2001.

Progressive believes its replacement cost estimator is more sophisticated than what is typically used, resulting in a more accurate rate and level of coverage. Progressive requires detailed information about each home, such as types of flooring, appliance and fixture grade and other unique features

“There is often a vast difference in the cost to rebuild a home vs. replacing a home,” said John Barbagallo, Progressive’s homeowner general manager. “Many policies don’t take into consideration that when a home is destroyed by fire, for example, the cost to rebuild on the original site is higher than the cost to build that house on another piece of property because of the need to clear debris and work around existing landscaping, not to mention inflation and other factors that increase costs. As a result, many homeowners come up short after a total loss claim.”

Of Progressive’s current 3,500 appointed agents, up to 500 “key agents” we be chosen by the company to represent the product. According to Jonathan Klein, the Texas product manager, Progressive has two goals with the introduction of a homeowners product: writing homeowners business profitably and writing more preferred auto coverage, which is often tied to package discounts.

“Our agents have been asking for it for a long time,” Klein said. “I think agents are very excited.”

The auto policy already has a discount in place for homeowners, and the homeowners product will offer a 20 percent package discount on top of that. The coverage is being written through Progressive Home Underwriters, a brand new Texas company.

Agents can visit www.progressive.com for more information.

Topics Texas Auto Agencies New Markets Homeowners