Progressive Hopes to Drive Market Share Its Way with New Agency Brand


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Progressive Insurance Co.’s move to re-brand its independent agency segment is being met with good reviews from outside financial analysts and branding experts, but mixed reviews from the independent agents who are at the center of the strategy.After weeks of guessing within the industry over what the giant auto player had up its sleeve, Progressive revealed it would re-brand its independent agency channel by giving it a new name and a big advertising push.The agency segment will be marketed as Drive Insurance from Progressive beginning in December. Drive will have its own logo and a Web site with a “find an agent” feature. Television ads will be road-tested in Florida next month and aired nationally in January.The company has hired the New York advertising firm of Ogilvy & Mather to design its ad campaign, which will include TV spots on cable channels deemed to have more upscale audiences, such as the History Channel, ESPN and A&E. The branding effort will also include cooperative advertising with agents through store signs, Yellow Pages and display ads. The new slogan: “Relax. Just Drive.”Progressive is best known for extensive national branding of its auto insurance that is sold direct, both over the phone and online. But it is also the largest writer of auto insurance sold through independent agents. Drive is an attempt to take the same high-profile branding approach it uses in marketing its direct sales and apply it to the independent agency side.Company officials unveiled the new branding campaign before 1,200 of their largest agencies at a gala event in Las Vegas last month and have begun regional meetings across the country to introduce it to all of the company’s 30,000 agencies.“Since we began advertising in the early ’90s, agents have told us they value our brand building activities but they’ve wanted to participate more actively in them,” said Bob Williams, agency group president for the Mayfield Village, Ohio-based insurer. “Drive Insurance from Progressive is designed expressly for our independent agents and brokers. It leverages Progressive’s brand equity while highlighting the value that independent agents and brokers provide.”Grab more marketAccording to Williams, captive insurers now grab the majority of the $120 billion auto insurance market. Progressive has about $10 billion and wants more. “We want to continue to grow,” Williams said in an interview with Insurance Journal when asked why the company is reworking its dual distribution model that has produced strong results. The insurer hopes to grow by grabbing more market share through its independent agents, he explained.Williams acknowledged that the company’s independent agency side, despite its growth, has been constrained by the direct side because consumers don’t associate Progressive with independent agents as strongly as they do with phone or Internet sales.He also acknowledged that the company’s own research with independent agents uncovered that they question the company’s commitment to the agency system.Drive is an attempt to change the minds of both consumers and agents by combining Progressive’s claims service, high technology and marketing experience in a program that touts the value of using independent agents. Williams said the company has been looking into this change in strategy for two years and included agents in its research.“We did our homework,” he told IJ.Agents’ concernsWhile consumers may be won over by the branding effort, it remains to be seen whether agents will be. Independent agents praise the company’s technology, easy processing and claims service, but they also have some complaints about Progressive, mainly about low commissions (between 8 and 10 percent on average) and fears over the company’s direct side poaching business from them.A number of agents remain skeptical about Drive, telling IJ privately that the new plan does not address their concerns.Two stories about the move posted to in late September drew more than 100 lively comments in a matter of days, revealing that some agents have strong negative feelings about the company.Steve Atwell at Georgetown Insurance Services in Silver Spring, Md., is among those agents and is not at all enthusiastic about Drive. In fact, he thinks it’s “dead-on-arrival” because it fails to address the commission issue, he told IJ in an interview.“Everything they do is ‘progressive’ except pay their agents,” Atwell said.Atwell said that he is not going to write good business for 10 percent commission when another company will pay 15 percent. “We have bills to pay,” he said.Paul Improta, owner of the Underwriters Inc. agency in Stamford, Conn., said he produces for Progressive but often utilizes it as a last-resort market. He told IJ he doubted he’d write more business with the company for a very simple reason. “They don’t pay us,” he said.“Sometimes it’s not even worth getting paid to have the clients they target,” Improta continued. “They tend to be walk-in people who bring their money with them, and we have to write a check against it. It’s more labor-intensive business in addition to being low compensation.”A number of agents volunteered the same solution: Progressive should give agents some of the money it plans on funneling into advertising and let agents do the sales and marketing, which is what they do best.That’s not going to happen, according to Williams. “We feel like we pay a fair commission,” the agency business president said, adding that Progressive is sticking with its strategy of being a low-cost provider with great service and strong marketing. While there are no plans to cut commissions, neither are there plans to raise them. Williams is counting on agents being happy over the increased volume of business they will get through Drive.Progressive has 30,000 agents and is not necessarily looking to increase that number. But the company would like to become a bigger player within more of the agencies it has already, according to Williams.‘Proactive’ strategySome observers were surprised by the repositioning because the company has been highly successful the

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