PARTNERS IN PERSONAL LINES

Rough Notes, Oct 2005 by Boone, Elisabeth

Atlantic Mutual sees the affluent market as a great opportunity for independent agents. The company cites statistics from the World Wealth Report, issued by CapGemini and Merrill Lynch, indicating that U.S. citizens with financial assets of at least $1 million grew by 14% in 2003 and 9.9% in 2004. And a Census Bureau report shows that the percentage of "million dollar homes" has nearly doubled (from 0.5% to 1%) since 2000.

Atlantic Mutual estimates that about 70% of the affluent market business remains with direct writers. Many affluent customers started out with direct writers when they were young and stayed with those carriers as they moved into larger homes, bought luxury vehicles, and acquired more valuable assets.

Further, Atlantic Mutual notes, the more assets people have, the more complex their insurance needs become, and the more they can benefit from the advice of an independent agent. "Affluent clients are more likely to be used to working with advisers for investment, legal, and tax issues," Olmsted points out. "Viewing an experienced agent as a trusted adviser shouldn't be a big leap."

Not only do affluent customers have more complex exposures and higher values at risk, Olmsted observes, but also "they don't have a lot of time. In most cases they're willing to pay more to get value-added services. That's why the selection of the best agents is so important to us. We try to give our agents the tools and the direction to perform effectively in the consultant role, to help customers decide how best to protect their assets and their family. We believe this level of service can be provided only by a qualified independent agent."

Although Atlantic Mutual is not involved in the commercial insurance market, Olmsted notes that substantial cross-selling opportunities exist for agents who represent his company for personal lines and have commercial lines clients who need a product like the Atlantic Master Plan. The reverse is also true, he points out: Affluent customers who become Atlantic Master Plan insureds are often excellent prospects for commercial coverages the agent can place with other carriers. "There are a lot of opportunities for independent agents who can really shine with a high-end personal lines focus and find not only good personal lines business but also other opportunities," Olmsted declares.

Countrywide comments

As noted earlier, the strategic alliance between Atlantic Mutual and Countrywide Insurance Group creates attractive opportunities for both carriers. Atlantic Mutual benefits by expanding distribution of the Atlantic Master Plan nationwide via a household name in personal financial services, while Countrywide is able to offer its affluent clients a proven product for their needs.

These clients constitute a large and growing segment of the market served by Countrywide Financial Corporation, says Tom Scrivener, president of personal lines for Countrywide Insurance Group. "It's extremely important to Countrywide to make sure we have a broad product offering to serve all customers, including the affluent home buyer."