Wal-Mart is no threat, agents say

by |
Mega retailer Wal-Mart made waves this week when it announced it was partnering up with AutoInsurance.com to offer car insurance comparison shopping through its website. However, agents and brokers in the already competitive space aren’t feeling particularly threatened by the superstore’s presence.

Insurance Business readers were quick to point out that comparative websites have not yet replaced the value offered  by a live, in-office insurance broker.

This is nothing new, commented Scott Neilson. Consumers soon discover after time with the direct companies that dealing with an agent vs a call center the agent wins in the end... though it takes sometimes years or bad claims experience for them to discover this.

Reader Cynthia Staley felt the same way, relating her personal experience in the comments section. She noted:

I had much rather deal with my agent personally than have to go online to get a quote, make a change, make a payment, delete or add a vehicle, file a claim myself, guide myself through the claims process, or have questions about my policy, etc. I prefer the personal touch rather than quote my policies and make changes myself or guide myself through a claim and issues with a claim. Low quality customer service online. No loyal customer service or personal relationship.

Jason Z also pointed out that Daniel Eckert, Wal-Mart’s senior vice-president of services, made unclear statements on the purpose of the store’s entrance into the auto insurance market, saying:

My question to Daniel Eckert, Wal-Mart’s senior vice-president of services is how does offering auto insurance “increase transparency?" Also "How do I know Walmart is giving me the best deal on every product in their store?" You don't.... What I do know is Walmart is in business for themselves; lets not forget they will be receiving a kick back for all insurance Clicked/Written throught them too.

One point of Wal-Mart’s partnership with AutoInsurance.com that did disappoint producers was the collaboration of some particular insurers. Joe Jimenez noted:

I think we all expected Progressive would do something like this, associate with Walmart, BUT I AM SHOCKED to see SAFECO be a part of this. A company that grew on the backs of its agents is now directly competing with the same agents that helped it become what it is today. Where is the loyalty and respect for its partner agents?

A big thanks to all our readers who commented this week!
  • David Evans on 5/3/2014 9:29:10 AM

    What about the insurance license requirement. Thier statement Wal-Mart sells insurance, should not they be licensed to advertise such?

  • Tom on 5/3/2014 10:16:29 AM

    As a 40 year Safeco agent, I was also surprised to see them associating themselves with Walmart . Let's not forget that they are owned by Liberty Mutual.
    No agent loyalty....it's all about the cash flow.

  • Charles Downey on 5/5/2014 9:07:12 AM

    This is Continued Flattening and commodization of what is one of the most Important products consumers purchase. These policies protect Their Future earnings, Persoanl accumulated wealth and Welfare... and the welfare of people around them. Utilize a professional. typically someone who can give you options, Like an independent / Trusted Choice Agent. We Know the myriad of exposures, associated risks and how to cover them correclty with the correct cost benefit. Don't buy this stuff blindly online.

  • Un B. Lievable on 5/5/2014 12:43:37 PM

    Tom hit the nail onthe head. It will take at least a year to finally unravel the truth behind Safeco's decision to partner with Wal-Mart, or their so called agency. There are many unanswered questions and broken promises. Safeco is just another way that the Direct Writers have found a way to sneak into the Independent Agents client base at the Independent Agent's expense. The end result will simply be a true picture of the end of Safeco's support for the Independent Agent system. Safeco is not alone in this quest for more market share but they will certainly lose the support of the Independent Agents to the other carriers who have maintained their commitment and loyalty to the IA.

  • Bob G on 5/6/2014 11:25:23 AM

    Professional producers still distribute the majority of all lines of insurance products. When carriers look for alternate methods of distribution, it is a slap in the face of those that spend the time learning their clients needs and recommending the products that best satisfy those needs.
    As a professional independent producer, I will no longer do business with companies who are looking to marginalize what I do for my clients in pursuit of an additional dollar.
    Rather I will place my business with the companies that understand that the agent is the link between the manufacturer and the consumer..

  • Ed R on 5/7/2014 5:23:07 PM

    Well here it is - You can't turn on the TV or listen to the radio for 5 minutes without State Farm, Liberty Mutual, Geico, Progressive, Nationwide, American Family, Farmers, Allstate, Esurance and now Wal-Mart and Safeco all BANGING on our books of business.

Insurance Business forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions