PIA President Lauds Ohio Casualty Decision to Abandon Web Auto in Favor of Agents; Arneson Also Notes Progressive Survey Finding That Consumers Prefer Agents

    WASHINGTON, Feb. 28 The President of the National
Association of Professional Insurance Agents today lauded the recent decision
by Ohio Casualty Corp. of Fairfield, Ohio abandoning its "Avomark" brand
direct personal lines auto marketing, in favor of an independent agent sales
force.
    Ohio Casualty's President & CEO Dan R. Carmichael said the production and
quality of business generated through online sales efforts was not justifying
itself, adding "The independent agent system is a better way to produce
personal auto in general. It is a better value for both the buying public and
the insurer."
    "PIA heartily commends Ohio Casualty for recognizing that the agent
distribution system is the best system for companies -- and that consumers
prefer to deal with their local insurance agent," said PIA National President
Thomas V. Arneson, CIC. "Studies conducted by PIA and other organizations
throughout the years have consistently shown what savvy carriers know: agents
provide the greatest value."
    Arneson also noted that a recent national poll of consumer preferences
indicated the overwhelming majority of Americans purchase auto insurance from
their local insurance agent, while less than one percent buy auto insurance
online.
    The poll of 31,500 consumers in 156 markets conducted by Progressive
Insurance of Mayfield Village, Ohio found less than one percent purchase their
auto insurance over the Internet, 21 percent purchase direct over the
telephone and 67.6 percent of those questioned said they bought their current
policy from a local insurance agent with an office in their area. Among
younger persons there was a slightly greater use of the Internet to purchase
auto insurance. According to the poll, the number was 1.4 percent among 18 to
34-year olds.
    "The action by Ohio Casualty and the survey by Progressive Insurance
combine to illustrate that -- contrary to conventional wisdom -- consumers of
all ages continue to overwhelmingly prefer to purchase insurance from a local
agent near their home, someone they know, trust and can advocate for them if
they have a claim," Arneson said.
    "Many companies in recent years have moved to independent agents as their
preferred method of distribution," Arneson said. "That's why I always keep
predictions that agents will be replaced by the Internet in perspective.
Agents are still here, and growing. At the same time, our economy is now
littered with the corporate corpses of companies which incorrectly assumed
that consumers would buy everything online."
    "Independent agencies have, are and will continue to be an essential,
successful and profitable part of the marketing and servicing of financial
service products," said PIA Executive Vice President Gary W. Eberhart, CAE.
"Our expectation is that smarter, more robust agency operations will find more
of the 'right type of client-fit' resulting in more premium and profitable
growth for each financial service provider they represent. Additionally, these
agencies' clients will demand that their agents exceed their expectations and
provide a much higher level of professional service."

    Founded in 1931, PIA is a national trade association that represents
member insurance agents and their employees who sell and service all kinds of
insurance, but specialize in coverage of automobiles, homes and businesses.