Astrid,
That’s a really good question and I’m glad that you asked. There are a couple of reasons that Safeco is so competitive in the market. The first is that they are owned by Liberty Mutual, making them a mutual company. Which means that they don’t report to stockholders as other companies may have to. This gives them more control over their rates and allows them more room to price products in a way that they see as competitive for the consumer as well as profitable for the company. Secondly Safeco is in all 48 states. By being wide spread versus only operating in a smaller area, when there is a loss it’s more widely distributed. American Family for instance operates very heavily in the mid-west. Therefore the bulk of their policy holders are affected by hail, tornado and the flooding we see every year. Because they don’t have as large a market to distribute those losses, rates tend to be higher to absorb the loss and keep the company profitable.

Safeco also uses a tiering system for rating. Many companies look at credit, motor vehicle and claims history and apply the rate. Safeco evaluates this information and places the customer into a tier. The more tiers that are available, the more competitive the rate can be for a quality customer. They have done a very good job at assessing risk and rating their products based on those assessments and this has allowed them to remain consistently competitive.

Additionally Safeco, as well as Travelers, Electric and MetLife, don’t spend large sums of money on advertising. You’d mentioned that you really don’t see them on TV and in other advertising and there’s a reason for that. They rely heavily on the independent agent to market them to the appropriate market. Because we do have options we’re aware of what type of customer fits into their preferred market and those are the customers we look to place with Safeco. An example of this is Progressive. Over the last few years we’ve seen increased advertising for Progressive. In almost every commercial break Flo is on the screen in a catchy commercial. Progressives rates used to be extremely competitive and one of the least expensive companies for a person who was considered high risk. That’s no longer the case. Their increases have made it so we aren’t able to be as competitive with Progressive which makes it more difficult to place that high risk business.

I hope this helps to answer your question. I included a bit of information about Safeco when I sent over your quotes. When you are ready to move forward I’d like to come sit down with you and James and go through the policies and any additional coverage options that you should have to consider.

Have a great evening and let me know if you have any other questions!