Travelers Cos. Plans Shift In Ads, Focuses On Direct Sales
April 21 2011 - 3:27PM
Dow Jones News
Travelers Cos. (TRV), one of the largest property-casualty
insurers in the U.S., plans to alter its advertising message this
year as it hones its effort to sell insurance directly to
consumers.
Travelers's current campaign focuses on increasing consumer
awareness of the company, but the new ads will be "more of an
'operators are standing by' type of advertising," Chief Executive
Officer Jay Fishman said on a conference call with analysts and
investors Thursday. "You are going to see more of a drive to
action-oriented advertising."
The change comes as Travelers, which has historically sold
coverage to consumers through insurance agents, works to expand
sales of home and auto coverage on its website. In that effort, it
trails rivals Progressive Corp. (PGR) and Geico, which have offered
car-insurance quotes and substantial customer-service operations on
their website for years.
Travelers is studying data about the first group of customers it
attracted on its website to refine its underwriting skills in the
new direct-to-consumer venture. The company must learn how much it
needs to charge to earn a profit while still attracting customers
to switch their insurance coverage to Travelers.
"We are still in the process of learning," Fishman said. "We
don't know enough about the pricing of the product. We don't yet
know enough about how to convert quotes into sales at a level
that's likely to produce a long-term profitable return."
The company has so far shared little information about its
direct-to-consumer initiative, though first-quarter results
released Thursday indicate the company is operating the project at
an underwriting loss as it invests in the effort.
Allstate Corp. (ALL), another home and auto insurer that has
historically sold coverage only through agents, has already shifted
its advertising toward direct consumers over to its website. From
there, they can find a local agent who can help them arrange
coverage, or get a quote on a policy.
Greg Toczydlowski, president of Travelers' consumer operations,
said the company may be able to gain a leg up in sales of home
insurance in the direct-to-consumer line. Compared to car
insurance, home insurance has so far been a less popular product
online.
"We really think that's where we have a long-term strategic
competitive advantage with the breadth of our product and the
strength of that property line," Toczydlowski said.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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