Safeco said it plans to add an estimated 1,000 agents to its force to beef up auto and home sales throughout the country.
The Seattle-based property-casualty insurer explained the action represents one prong in the effort to move into positive growth territory in the increasingly competitive personal lines market.
The carrier currently has about 9,000 independent agents based primarily in western states. Company spokesman Paul Hollie said the new agents will be sought for areas "where we see a good opportunity."
Safeco increased commission rates Oct. 1 by 2 percent. Next year, the company hopes to put in place a system in which agents get a 17 percent commission on new business and 10 percent on renewals, or 15 percent on both.
Earlier this week in its third-quarter earnings release, the company said auto insurance premiums were down 6.1 percent for the quarter while unit count was down 4.3 percent.
Morgan Stanley property-casualty analyst William Wilt has written that Safeco has lost market share while competitors Geico and Allstate have seen theirs rise, with the latter two focusing heavily on television advertising.
Mr. Wilt said that in addition to adding new agents the company is lowering auto rates 3-to-5 percent in states representing about a third of its premium and assigning new risk tiers to preferred customers in the hope of raising retention, which he noted has fallen for several consecutive quarters.
"Clearly Safeco is undertaking these actions because the company is losing market share in its preferred auto insurance line," he wrote.
The company has undertaken a number of expense-saving initiatives for which it will take a $26 million restructuring charge this year and plans on those moves producing about $70 million in savings on an annualized basis.
The company has been selling off real estate and laying off hundreds of employees in the hope of being able to put more money into commissions and lowering premiums.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.