Remember all the talk years ago about how independent agents were doomed to go the way of the milkman, and how consumers would eventually shove the useless middleman aside and buy their insurance either online or direct from carriers? Well, that's not happening anytime soon, with the latest evidence being Liberty's Mutual's bold commitment to the agency distribution system.
As reported by our own Mark Ruquet, Liberty Mutual sold its middle-market direct sale renewal business, retired its Wausau Insurance brand (which had been serving this niche on a smaller scale), and launched a new commercial business unit to work through independent agents–Liberty Mutual Middle Market.
This is clearly a strategic move for us, not a financial play, J. Paul Condrin, president of Liberty Mutual Commercial Markets, told NU. He explained that Liberty made the shift because its middle-market business was not growing in a field dominated by independent agents and brokers offering risk management services to their clients.
There is a pent-up demand for our product and our brand, and we think the best way to satisfy that demand is by going into the independent broker business and closing down the direct, he added.
That's music to the ears of agents and brokers everywhere, who have really stepped up their efforts to serve as true risk managers for middle-market accounts, which often don't have anyone devoted full-time to loss control and safety concerns. These clients depend on their agents and carriers to provide such expertise and services.
The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York summed up producer reaction to Liberty's move, which illustrates the companys recognition that professional independent agents are the most agile and efficient force in helping its current and potential customers, according to Executive Director Diane Fowler.
Midsize businesses in particular seek out independent agents because an agent will spend the time to evaluate each business unique circumstances, find appropriate coverage and explain every facet of a policy, she added. This type of service is invaluable to midsize businesses, and is a business model we hope carriers will expand, as it serves personal lines clients and all commercial clients, regardless of size.
This development is no accident. It is the result of thousands of independent agencies recognizing that they can no longer make a living as mere policy peddlers and price shoppers in the service-intensive midsize commercial market. They have taken risk management to another level at their firms, thereby becoming more than just insurance sellers.
As expert advisers on controlling the cost of risk, they have established a unique bond with clients that direct writers have found impossible to breach. Liberty Mutual was wise to hitch its wagon to the still thriving independent agency distribution system.
Milk men, indeed!
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