State Farm and Mercury Collusion
Put the Customer First!
Before I go any further with this article, I want you to know that originally I wanted to complain about the report of what has happened with State Farm and Mercury Insurance and the lawsuit being filed against them, but instead I felt it necessary to try to help, to make things better for these two companies, which is what I hope I have done.
One important lesson that I learned from my years as a Property Adjuster is that the desire for protection from economic ruin can force people and business organizations to do things that are out of the ordinary, based upon the fear of something that has not happened yet.
Economist Adam Smith noted that “The desire for wealth is nearly universal, and its power is experienced in every corner of the globe.”
· Proverbs 13:11 tell us: "Dishonest money dwindles away, but whoever gathers money little by little makes it grow".
Why am I quoting these two sources on the accumulation of wealth? It is because just recently, a lawsuit was filed against State Farm Insurance and Mercury Insurance for collusion in setting abnormally high insurance premiums for the Southern California policyholders. We should note at this point that State Farm and Mercury Insurance control approximately 75% of the homeowner insurance market in California. If an insured cannot obtain affordable insurance from their current carrier, or if they are dropped by their carrier, they are usually referred to the California Fair Plan, commonly known as the insurer of last resort.
California homeowner insurance companies act as the agents for The California Fair Plan, meaning that if an insured’s application for a homeowner’s policy is declined, they can apply to the Fair Plan and have the company which denied their original request for coverage, act as their agent for the Fair Plan. Basically, this means that if State Farm or Mercury wants to increase your premium, or not provide insurance for your home at all, they can charge you what they want to by recommending the Fair Plan to you, which will provide less coverage and a higher premium than what you were originally paying, which adds up to price manipulation. In addition, State Farm has applied and received approval for a 17% premium rate increase for active Homeowner policies.
To further illustrate what companies need to stress to achieve success, not to mention survival, I present to you how to “Put the Customer First”, even if it hurts the checking account.
This following analysis of successful business was taken from Smart Business Trends https.//smartbusinesstreds.com.
Base the company culture around the customer!
Take care of employees!
Target your audience!
Create a customer-centered attitude!
Personalize the customer experience!
Offer exceptional service!
Ask what the customer wants!
Allow customers to leave feedback!
Make customer centricity a vital part of company culture!
Implement a customer-oriented approach!
Focus on customer experience and customer satisfaction!
Reward loyal customers!
Listen intently to customer feedback!
Unless major management changes are taken in both State Farm and Mercury, problems will continue to grow until the State of California is the only insurance game in town.
Respectfully Submitted,
Norman Lambe
nwlambe@gmail.com