PIA, Travelers leaders meet to discuss direct market program

PIA volunteer leaders met with Travelers senior management May 25 to respond to media quotes regarding their direct to consumer advertising program.

Participating on behalf of Travelers were Patrick Kinney, president, Field Management; and Lisa Tepper, regional president–downstate New York and New Jersey. Representing PIA at the meeting were PIANY immediate past President Kevin Ryan, CIC; Vice President Gene Sandy; PIANJ President Donna Cunningham, CPIA; PIA Executive Director Diane Fowler and Business Issues Director Jim Pittz, CPIA.

At the meeting, Kinney and Tepper responded to PIA's inquiries and discussed their ongoing commitment to their agents. "The foundation for Travelers' success is the important role of the independent agents and brokers who do an extraordinary job representing their clients. We couldn't be more bullish on the future of independent agents and brokers, both short term and long term, and everything we do is riding on their success."

With regard to the company's direct-to-consumers operation, it was noted: "The only industry product line that has achieved significant traction in the direct channel is personal auto and, over the past 10 years or so, that has come at the expense of the captives. We view this as a consolidation in the non-independent agent channel, with independent agents continuing to represent about one third of the personal auto category–a market share that has remained stable. We attribute that to the value insurance buyers place on the advice they get from independent agents and brokers."

Travelers views the direct-to-consumer channel as a means of drawing new customers to the Travelers brand who might not otherwise have considered the company: "While those specific customers who currently prefer the direct channel for personal auto may not fully value the advice of an independent agent today, we believe that many of them will tomorrow as their insurance needs get more complicated. If we can establish relationships with those customers now, it may give us the opportunity to connect them to Travelers independent agents later."

Travelers wrote about $100 million in premium through its direct channel last year, while writing $21 billion through independent agents. The company has stated publicly that the direct channel is not yet profitable.

In response to PIA's inquiries regarding a recent press account on the company's direct initiative, it was explained that it was a report on an answer to a question asked during the company's first-quarter earnings conference call. "While the question that was asked related to our direct to consumer business, the answer related to our advertising generally, which applies to both our agent and direct businesses. The comment we made was that our ads are going to feature a call to action message like "Are you well protected, call now to find out." But they won't just say, "call Travelers," they will say something like, "Call or click today for an agent or quote." These ads feature a call to action to buy, not just a call to action to buy directly from Travelers. And most importantly, our key message for getting consumers to act is a message of protection, not just price, which we believe is a fundamental reason consumers choose independent agents. As each new commercial rolls out, we believe our independent agents will see that the advertising messages continue to be consistent with our mutually shared business goals."