PIANJ meets with Selective to talk business issues

Continuing a series of planned meetings with insurance companies serving the New Jersey market, PIANJ met Dec. 2, 2008, with executives of Selective Insurance Group at Selective's New Jersey region office in Hamilton Square.

A series of Company Outreach meetings is underway, overseen by PIANJ's Business Issues Committee. PIANJ Vice President William R. Vowteras, CPIA, opened the discussion by inviting a frank dialogue about current challenges and issues that impact independent agents and the companies they represent.

What do agents want?

Selective Executive Vice President John Marchioni led the conversation, providing examples of how Selective seeks to support its agents' interests. The company clearly thinks a great deal about agents' welfare.

For example, Marchioni cited the company's Selective HR Solutions, the company's professional employer organization, initiated proactively in order to provide agents with an avenue to compete against other PEOs, as well as other insurers that have partnered with payroll companies. He also cited Selective's commitment to developing a 24/7 environment for its agents' customers through the continued rollout of customer self-service options. Throughout the meeting, Selective continued to mention various recent or planned roll-outs including an enhanced leads program and a new small business program and product, SelectBIZSM. All are designed to improve its utility and competitive stance.

Marchioni underscored the fact that Selective, unlike other agency companies, does not operate a direct-sales channel. "What value do agents place on this decision?" he asked.

PIANJ responded that agents definitely dislike losing business to direct-response units at one of their own companies, and deplore the fact that accounts sometimes can be written or priced "direct" in ways that are not available to the company's agents.

"Agents support companies that are loyal to them. If a company's agents don't generate enough growth, we understand the company may look at alternatives," said PIANJ past President Paul Monacelli, CIC, CPIA. "Agents who don't grasp these points may well be left behind."

Breadth and stability

"Few companies provide the full spectrum of commercial, personal and bond markets in New Jersey," observed Selective's Edward F. Drag II, CPCU, field senior vice president for the New Jersey region. "Selective has continued to service many markets through good and bad times. How important has our stability and breadth been to our agents?"

PIANJ reinforced to the company the value placed by agents on a consistent underwriting appetite for the bread-and-butter lines, coupled with innovation. Monacelli commended Selective for announcing a "pay-as-you-go" workers' compensation option. "Agents have to have this product in the current environment," Monacelli said.

"In posting these questions about what agents truly value and appreciate, Selective has identified precisely what PIANJ sees as our own need-to-know," Monacelli continued. "In 2009, we will be drilling down further on this important point as part of our ongoing company values project. We will be asking members what they really do look at, in order of importance, when they look at their relationship with a company today. We will be soliciting agents' opinions, analyzing the results and using the outcomes to improve the value of future company surveys."

Selective believes its agency footprint in New Jersey is strong. The company continues to be proud of its Agency Management Specialist model that places company resources in the field. These agency management systems operate near agents and customers, promoting communication, and providing immediate assistance on day-to-day matters—a model that the company acknowledges is resource-intensive.

PIANJ past President Robin Suydam, CIC, affirmed the value she finds in conferring with her Selective AMS in her agency on a regular basis. "We all get such a blizzard of e-mails," Suydam said. "It stands out when someone shows up in person to announce new developments and answer our questions."

Marketing issues

Turning to the problem of marketing against direct sellers, Selective said it sees the challenge as two-fold: getting buyers to understand the independent agent business model and also branding the individual agent locally. "They're not mutually exclusive," Marchioni said. "Selective believes both efforts are equally important."

Also discussed were the challenges of diversity marketing and the new opportunities opening up due to changing demographics in some areas.

Marchioni pointed out that, in the past two years, Selective has helped place more than 100 new producers in its agencies, 25 in New Jersey alone, and strives to increase diversity in this new-producer program.

Monacelli replied that this is an area where agents definitely do appreciate their companies' help, since adding staff is costly, and there is a need for affordable training. "Helping place and train good new producers is one of the best things you can do to promote your agents' business growth," Monacelli said.

Marchioni added, "Our aim is to help our agents be successful in their business by helping with things that are important to them such as building their sales staff and managing agency perpetuation."

Personal lines

The discussion turned to personal lines; an area in which Selective has invested to promote in the past two-to-three years. "We believe personal lines can help balance the cycles associated with commercial lines," explained Allen Anderson, senior vice president, personal lines. "It can be a stabilizing force."

"Unfortunately, New Jersey agents became leery of becoming 'unbalanced' in their companies' eyes, by being too heavy in personal lines," Monacelli said. "We've got to get past that. We've got to make personal lines important again in an agency."

Monacelli described PIANJ's Take Back Personal Lines initiative, saying the association's efforts in this area "need to be redoubled. As an association, PIANJ needs to work with companies that believe in this goal."

"We agree," Marchioni replied. "In addition, we see today's personal lines customer as tomorrow's small business owner."

Agent-company automation interface

Participants also discussed recent advances in usage by agents of the technology that companies make available. PIANJ commended Selective for its leadership role in this area, as validated by industry recognition and PIANJ survey results.

Suydam said the next level in comparative rating functionality will depend on incorporating underwriting reports (claims, motor vehicle reports) up-front to produce a finished rate, and that PIANJ is working with AUGIE to promote a proposed workflow that could accomplish this; the workflow is being shared with Selective and others.

A discussion ensued about customers' changing expectations and the need for agents to remain fully aware of these trends. "There needs to be an evolution in the agency system to meet customer demand for real-time interaction," Marchioni said. He emphasized the fact that Selective is making tools and resources—such as the service centers and a customer portal—available so agents can partner with Selective to meet the evolving expectations of customers.

Teresa Caro, assistant vice president and field operations manager; and Len Commini, assistant vice president and underwriting manager, also joined the Selective representatives.

PIANJ also was represented by Business Issues Director Jim Pittz and Senior Research Analyst Ellen D. Kiehl, Ph.D.—Kiehl