Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Phillips of Stifel Nicolaus.
Michael Phillips - Stifel Nicolaus
Part of your strategy that you talk about is we are going to approach agents with something like the following pitch, give us your niche business, the stuff that you are kind of growing now obviously the schools, the public institutions and the churches and social services. Give us that and obviously we will get around the wholesale and therefore can pay you more. In return can you give us a chunk of the flow business? That is the basic deal, the way I understand it. I don’t see who would say no to that and so I am missing something. What kind of bumps on the road do you have with agents when you go through those talks and why would somebody say no to that?
Fred Eppinger
I think it is something that for people that know us and have decided to commit to us, I think it is a very compelling story and particularly with the disruption. Because, what we are seeing today with these companies that are troubled, they have to be very careful that they don’t give too much of their business to the two or three significant companies you can think of that are taking advantage of this disruption. So they are looking for more markets to build a deeper relationship with that have a strong financial position. They are very receptive to it.
With the upgrade today, as you can imagine, one of the biggest issues you’ve got is when they think about giving us an ?unfair advantage? that they want to make sure that we are here for the long haul. So this upgrade is going to be an enormous help for a lot of the agents that were maybe giving us preferred treatment, but hadn’t really committed to a full partnership. So, I am very confident this is going to work.
Now, why do you see the numbers, why personal and the small commercial doesn’t grow regardless of the cycle at significant levels: remember we still have a bunch of that business and traditional agent relationships and in states that are not completely in the partnership realm. So they are legacy positions that we have with folks. They are good agents, but they are small agents with less upside and particularly in our core states.
- To read the full transcript on Seeking Alpha, click here »
