Insurance Marketing - Changing Focus (1,584 words)
Here's what it means: a significant expansion in market share for P&C companies following the insurance direct marketing concept by providing auto insurance to consumers.
In 1997, these companies achieved a 13.5 percent share of the $109 billion personal auto market. In 1998, companies following the insurance direct marketing concept added almost 1.5 points to their share of the personal auto market, gaining approximately 15 percent of an estimated $110 billion market.
To put this in perspective, in 1990 eight companies were selling directly to the auto insurance consumer: GEICO, USAA, Colonial Penn Insurance, Worldwide, AIG, National General, Amica Mutual and The Hartford.
By 1997, 27 companies were doing so. In 1998, five more companies started up: The total is now 32. And in 1999, there was a net of two more start-ups added to that total, making it 34 companies offering auto insurance directly to American consumers.
In 1999, Great American purchased Providian P&C (the old Worldwide) from Aegon. Reliance Direct was bought by Kemper Direct. And Farmers Direct suspended operations. Net net to this saga is the fact that there has been a more than 300 percent increase in companies using the mail-order distribution channel in the last nine years!
Now that is good news.
But it is only one segment of the almost $1.2 trillion insurance industry, the estimated amount of money collected by the insurance business, excluding special risk dollars, in 1999.
Based on 1997 numbers, the share of market by functional segment looks something like this:
In business-to-business and business-to-consumer insurance sectors, insurance direct marketing accounts for a 6 percent share of market. But, and a big "but" it is, less than three years ago the market share was 4 percent. That is a 2 percentage point increase in just three years.
The news gets better and better.