Allied Insurance Has Revamped Farm Product, Wants to Write More Farm Business

Percent of business in Illinois by line:
Commercial: 48% Personal: 52%

Are you currently appointing new agents? Yes! Our standard agency agreement contains authority for preferred personal lines, non-standard auto, farm lines, commercial lines, and surety business. Separate agreements are also available.

What type of agency is your company looking for? New appointments must be professional agencies with proven track records in both real growth and bottom line profitability. Allied consistently outperforms our peer group in the industry in both growth and profitability because our agency partners outperform their peer group in these measurements. Agencies must commit to making Allied a significant factor in the agency in a short amount of time. Allied made 10 appointments in Illinois in 2002.

What are your premium volume requirements? Volume requirements are determined on a case-by-case basis depending upon location, positioning of other carriers within the agency, and potential. Profit sharing begins at $150,000 combined preferred personal lines, farm, and commercial lines. Separate profit sharing agreements are available for non-standard auto and surety business.

Are you currently doing any niche-marketing program? We are commercial generalists with programs targeting golf courses, auto service, wholesalers, franchised fast-food, franchised motels, artisan contractors, and other premier businessowner classes.

What is your company's most aggressive line of business? Packaged personal lines accounts and Premier businessowner classes.

Do you use credit scoring? We offer multiple discount levels in our auto program based upon financial stability factors-both new and renewal. We offer home and auto products to customers with credit score challenges.

Do you currently download/upload with your agencies? Personal Lines upload is accomplished with single entry comparative rating bridges and our proprietary system. We download with all major vendors. Commercial download will be available in 2003.

What methods do you use to distribute your insurance products? Allied distributes only through independent agents.

What do you think makes your company different, or stand out from all the rest in Illinois? Why would an agent want to contract with your company? Allied is best characterized as an extremely aggressive marketing company with disciplined underwriting and superior claims and customer service. We do the "little things" right. Our financial strength and consistent performance allow tremendous stability in our products, pricing, and underwriting. While we are $2 billion strong, our regional office autonomy allows us to be more nimble and responsive than most of our competitors.

If we had agents agree to sell homeowners policies with actual cash value endorsements, would you write more business in southern Illinois? Homeowner loss experience is primarily a function of inadequate pricing levels. With adequate pricing and more aggressive loss sharing initiatives (higher deductibles), significant progress can be made in this product line in all geographies. If agents focus their efforts on writing packaged personal liens accounts with financially strong carriers that are still offering both auto and home solutions, this will also greatly help with this challenge.

What are the major ways in which you are interfacing electronically with your agents today? Are you pleased with the results? We are quite pleased that more than 95% of all personal lines applications in Illinois this year came to us electronically. Almost all of these applications came through our Internet quoting and issuing system. This system allows for true single entry when agents take advantage of our bridging with all major rating vendor programs. We have also enjoyed tremendous success with our commercial Internet quoting and issuing system.

Are you planning enhancements in these interfaces in the future? During the first quarter of 2003, Allied will unveil a new commercial and farm Internet quoting and policy issuance system that promises to be among the best in the industry. We will also finish out our personal lines product selection on the Internet with the introduction of our new boat program. We continuously integrate our agency partner input into all of our systems with frequent upgrades and enhancements.

The Agents Council for Technology (ACT) has recently adopted a major statement spelling out the opportunity our distribution system has to move to more effective agent-company interfaces. Please comment: There are perhaps no more important measurements of our agency partner relationship successes than our scores on "ease of doing business" questions. Allied takes these issues quite seriously and continues to be an industry leader in using technology to advance efficiency and to drive operational costs down for everyone. Unfortunately, many of the proposals offered by myriad of vendors involved in the insurance "process" are intended to level the playing field for carriers who have not made similar capital investments in technology. Many of these carriers are not currently providing their agency partners real solutions to these challenges.

Additional Comments: Allied is a 2 billion-dollar company with regional offices that make their own decisions and are not affected by other regions. Illinois has approximately 50 million in premium volume, with 11 million in Cook, Lake, and DuPage counties. Although Allied is owned by Nationwide, the company distributes only through independent agents. They have a 4-tier rating on auto. The tier is not based on credit, it is used only as a discount. Below-average credit goes into the non-standard plan. Allied has all manuals and forms on the Internet, and does billing and claims on the Internet. In regards to homeowners, Allied encourages agents to write package, although they do accept monoline homeowners. The homeowners loss ratio is currently 90% pure. In the Chicago area, the homeowners to auto ratio is 2-1, and the company is trying to change that figure. The company has raised the water/sewer deductible to 500 and will have wind/hail deductible options. They took a 9.9% increase in June and expect another large increase in 2003.