A Morgan Stanley (MS) property-casualty analyst, William Wilt, said, “examining Safeco’s emphasis on agent distribution he sees “a mismatch between the stock’s valuation and the company’s ability to deliver on the growth expectations embedded therein.”
Wilt’s comments came after “a day-long Safeco meeting with analysts and investors.” Wilt noted, “The Safeco meeting focused on efficiency and innovation initiatives, alongside its focus on fueling growth by raising commissions and intensifying efforts to build brand with independent agents and not consumers.”
Comparing the strategy of other companies Wilt commented, “Safeco’s competitors have embraced the view that insurance is a consumer product warranting a direct-to-consumer brand initiative.”
Seem to me Safeco should at least put half of their marketing efforts towards the consumer. I suppose they think if they improve relationships with agents and their brand in the eyes of agents they will churn out more sales. However, if the consumer is not generally too familiar with the Safeco brand then those sales will be a little harder to come by.
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