Kicking off a planned series of meetings with insurance companies serving the New Jersey market, PIANJ met with executives of Palisades at their Berkeley Heights office Oct. 29, 2008.

Palisades Chief Executive Officer and President Ed Fernandez opened by showing PIANJ participants the latest Palisades client newsletter, containing a reassuring message about the company’s financial stability. The issue also announced Palisades’ new capability to accept customers’ premium payments online. “Now you can view and print your billing information, policy documents, invoices, your coverage summary and much more,” clients were told.

The 24/7 online service is part of the company’s larger strategy of catering to busy customers who increasingly are going online to transact business. Recently, the company has been conducting seminars for its agents on how to drive business to their own agency Web sites, as well.

“It’s bad news,” Fernandez said, as he directed PIANJ’s attention to the next handout, a summary of the latest market-share trends for New Jersey personal auto market. Palisades was a leader in sharing this information from the Department of Banking and Insurance with its agents, an initiative that PIANJ joined by preparing QuickSource document No. QS29207. As the meeting revealed, we do so with similar goals—to spur action by agents to “take back personal lines” after deep inroads by direct sellers.

Independent agents’ share of the personal auto market continues to slide and now hovers at around one out of every five vehicles insured. Palisades’ primary growth strategy has been acquisition of existing books. Its most recent merger with Proformance sets Palisades on track to surpass a quarter of a million vehicles insured, becoming New Jersey’s largest agency system writer.

Fernandez acknowledged that independent agents have additional lines of insurance to which they can look for revenue. PIANJ responded that many agencies, historically, looked to their personal lines book to provide stability and reliability, and that agents take very seriously the erosion of this revenue stream. A membership survey conducted in 2007 found PIANJ members were not planning to diminish their focus on personal lines.

Promoting agents’ growth. The parties to the Oct. 29 meeting resumed a conversation begun in May at Palisades’ initiative about strategies to successfully promote the independent agent brand. Palisades sponsors the PIA branding campaign, among many other proactive steps the company has taken to support agency marketing. Both sides agreed that, while many good ideas and programs are available, success depends upon execution and follow-through at the agency level.

Palisades shared with PIANJ some of its latest enhancements and plans. The Proformance merger has brought Palisades “a very attractive book” of commercial auto, furthering Palisades’ intent to be a commercial auto specialist. “This is a natural extension of what we do well already,” Fernandez explained. In addition, the deal will help jump-start the company’s initiative to introduce package policies. The company also has a new umbrella product available for customers when Palisades writes the underlying auto coverage.

PIANJ initiated a conversation about agency technology and agents’ need to obtain full, bind-able quotes when using comparative rating products, by incorporating the underwriting reports up-front. PIANJ provided a sample workflow developed by AUGIE to accomplish this objective. Palisades enables comparative quoting with EZLynx and SilverPlume.

“It’s not how many sales,” Fernandez agreed.“It’s how many quotes. Get the quotes out there and the sales will follow.” He said Palisades has been pleased with the results of integrating with comparative raters.

Changes in New Jersey. Discussion turned to the changing face of the New Jersey personal auto market, with new territory maps adopted by nearly all insurers, the “take-all-comers” system set to expire, a new approach to urban area affordability on the drawing board, and new flexibility in developing company-specific rating systems.

Palisades clearly has an aggressive strategy for competing in all areas of the state, for virtually all drivers. “Our large existing book of New Jersey business has furnished the data we need to price business everywhere,” Fernandez explained. “We are a market for 99 percent of drivers. Our new rating plan accommodates all but the tiny minority of the drivers with the worst records.”

Palisades, Fernandez said, remains a smart, nimble company that is dedicated to its agents and eager to further their success. But clearly, he is worried by the dismal auto market-share picture. “Having 50 percent of a diminishing pie is not good,” he explained. “With the abrupt change in the market a few years back, we recognized that people needed to be trained how to sell. We know we have to give people the tools. But frankly, we need to see more commitment from agents.”

PIANJ discussed several association projects and programs with Palisades, including the Company Performance Survey, where Palisades scored among the top 10 carriers, distinguishing itself especially in the area of company service. PIANJ recognized Palisades’ consistent support as a platinum sponsor of our annual conferences, robust participation in PIANJ programs such as CEO Conferences and the Women’s Business Forum series and ongoing focus on advancing its agency-company technology.

“We appreciate the time Palisades devoted to a frank discussion of challenges we face in this increasingly competitive market,” said Gary C. Rygiel, CIC, CPCU, ARM, CRM, AIS, PIANJ president. “We look forward to continuing the dialogue on how to approach this challenge seriously and successfully.”

Participating in addition to Fernandez from Palisades were Karen Murdock, vice president of marketing and distribution and Marijean Murray, marketing director.

Joining Rygiel from PIANJ were Donna Cunningham, CPIA, vice president; Bill Vowteras, CPIA, vice president; Anthony Bavaro, CIC, CRM, treasurer; Paul Monacelli, CIC, CPIA, past president; and Robin Suydam, CIC, past president.—Kiehl