Page 24 - BusinessWest May 13, 2024
P. 24

  “People have
more information available to them today, on the internet and on their phone, than I had available to me as a mutual-fund manager back in the ’80s.”
MIKE MATTY
and your automobile insurance, specifi- cally, had what they called ‘fixed and established rates,’ and that was all set by the state; the insurance companies didn’t set the rates,” he explained. “And that allowed you to have a mom-and- pop agency on just about every corner because it was more of a convenience buy then ‘I need to go shop my insur- ance to see if I can get the best deal,’ because every agency would provide you with the same number when it came to auto.
“All this allowed for what I call a life-
style business,” he went on. “You could
make a pretty good living with two, three, or four peo- ple in your office, and there would be one right down the street and another right down the street from that.”
It’s much different now, Hanmer said, adding that, when the state changed to competitive rating a quarter- century ago, that changed the dynamic in the industry. Prior to that time, and because the state set the rates, most direct writers didn’t have a presence in the state.
“They didn’t want to play that game,” he said, add- ing that the Progressives, State Farms, and Liberty Mutuals of this world now have a huge presence in the state, and its residents are subject to their endless TV commercials.
“With that competition, agencies had to work a whole lot harder because they had to shop everything,” he went on. “A lot of them said, ‘I don’t want to do this anymore,’ and that started the consolidated process.”
And it has continued unabated, said Johnson, noting that private-equity funds have discovered the insurance industry, and now, many of the mergers are driven by aggregators backed by private-equity funds.
All this consolidation is in some ways good for con-
“Businesses look to cut down on the vulnerabilities they have. And a big vulnerability for all of us in insurance over the past decade, and I’ve really seen it accelerate, is personnel — trying to get people who are well-trained and understand that the insur- ance business is just really difficult.”
sumers because larger agencies provide them with more choice, she said, adding that this is countered by perhaps not knowing the person behind the counter — or on the other end of the phone — as well.
Meanwhile, the players left in the industry now find it increasingly difficult to attract and retain talent (yes, you’ll read these same words in just about every story in this 40th-anniversary issue), which is prompting many to outsource tasks and turn to virtual assistants based in other states or, increasingly, other countries.
“A lot of quoting of business is now automated, as are some aspects of claim handling, billing, invoicing, those types of things,” Johnson said. “Anything rep- etitious is now likely to be automated, and that’s not unique to the insurance industry.
“Businesses look to cut down on the vulnerabilities they have,” she went on. “And a big vulnerability for all of us in insurance over the past decade, and I’ve really seen it accelerate, is personnel — trying to get people who are well-trained and understand that the insur- ance business is just really difficult.” BW
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MAY 13, 2024
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