Independent Agents Write On As Progressive Announces Growth In Auto Net Written Premium For 1997

The long predicted demise of the independent agent seems to be unfounded after Progressive announced that its more than 30,000 independent agents had written business at a rate almost twice that of GEICO Direct in 1997. The nation's fifth largest auto insurer also announced that its independent agents wrote more new auto net written premium in 1997, both as a percentage increase and in absolute dollars, than did the agents representing State Farm and Allstate, the number one and two U.S. auto writers respectively.

Daniel R. Lewis, Agent Marketing Process Leader, Progressive said, "We realize that a remarkable percent of growth on a smaller base is a good story, but the real news is that our independent agents grew the amount of auto net written premium by nearly $900 million in 1997. State Farm and Allstate's personal lines business, which includes Homeowners and Auto insurance, grew $131 million and $809 million respectively." The total Progressive net written premium written by independent agents grew approximately 35 percent in 1997, while State Farm's and Allstate's personal lines business (including Homeowners and Auto) grew 0.8 and 4.5 percent respectively.

"This kind of growth in the independent agency channel certainly flies in the face of industry watchers who have long predicted the demise of the channel," said Lewis. "Many things contributed to this growth, including the agents' ability to better serve their local customer base, increased levels of advertising to bring attention to independent agents and continued product refinements that resulted in lower Progressive rates for more consumers."

Jeffrey M. Yates, senior executive vice president of the Independent Insurance Agents of America, explained that in recent years, many independent agencies have been repositioning themselves to be more aggressive in personal lines. "The large number of consumers who prefer to buy their insurance from a local agent still represents a very significant growth opportunity," he said. "The independent agency channel can compete very effectively with other distribution channels.''

Growth levels vary for individual agencies representing Progressive. Of the more than 30,000 Independent Agencies representing the company, more than half saw their Progressive net written premium grow nearly 40 percent.

"In 1998 we are intensifying our efforts to support our business partners in producing more business and better serving consumers," said Lewis. "We'll increase our advertising, and we're introducing some technological innovations and product enhancements to give our independent agents an even more distinct competitive advantage in the market."