I've never heard of your companies.

I was leaving church yesterday when someone approached me in the parking  lot and said they needed to talk to my about insurance.  This was not somebody I insure and I really don't like talking insurance at church.  I tried to  just give them my business card and get on my way (I have a problem with people trying to sell their wares while at church, but that's just me) but they wanted to talk.

They quoted a friend who said I "was really good" but they had a quizzical look on their face as they said "but I've never heard of your companies."

I hear that a lot.

Why?

Well, Allstate spend approximately 500 million a year advertising (http://www.chicagobusiness.com/article/20110625/issue01/306259984/allstate-misses-the-turn-as-rivals-reinvent-auto-insurance)  I imagine Gieco, Progressive, State Farm, & Nationwide are in the same ball park.

Let me explain how insurance works.  For every Dollar that a company brings in they have to pay for expenses and claims and have something left over for a profit or they get skewered by their stock holders or go out of business.  So, were does that advertising budget come from?  That initial dollar, but they still have to pay to run the business, underwriters, janitors, adjusters, electricity, etc.  Guess what the biggest expense an insurance company faces?  Claims, industry wide about 65% of revenues in a good year.  Wonder where that 500 mil is coming from.

One of my companies , Auto-Owners (http://www.auto-owners.com/) feels they can afford to pay 68% on claims because they don't have that big advertising budget that the others do.

So, do you want to pay for Dennis Haysbert and Mayhem or do you want your company to have more money left over for claims?