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VOL. 36 | NO. 24 | Friday, June 15, 2012

New insurance player to open 30 Middle Tennessee stores

By Joe Morris

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Consumers are used to physical storefronts for everything from groceries to lumber, but is this how they want to purchase insurance? Brightway Insurance is betting so, and is targeting Middle Tennessee for a 30-location expansion of its in-store coverage sales model.

The Florida-based company is betting people will buy into the convenience of a physical store offering multiple lines for their insurance coverage, rather than finding an agent and going to see him or her, or shopping online and not having much, if any, personal contact, says David Miller, chief executive officer of Brightway.

“In all our market areas, we find consumers that are looking for a different way to buy insurance, and our approach has something that they want,” Miller says.

People in the market for car, home and other insurance coverage have long been able to compare and contrast policies from traditional insurance agents offering coverage from a single company, as well from as independent agents who represent several companies.

In recent years, they also have been able to shop online from a growing number of Internet vendors such as Progressive and GEICO. In that evolving marketplace, Brightway’s gambit is the latest effort to reinvent policy sales and service to meet customers who want still more options when it comes to researching and purchasing coverage.

Basically, the company hopes to bridge the agency and online sales venues with a physical store, where all store employees are licensed agents. Preliminary plans call for up to 72 Tennessee franchise stores and as many as 300 insurance agents.

The company hasn’t specified locations for the 30 Midstate stores, stating only that they will be in Davidson and surrounding counties.

Miller says the first few locations will be open by year’s end. The new stores would join the 100 now open in Alabama, Florida, Georgia, South Carolina and Texas, as well as proposed locations in Arizona, Colorado, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma and Pennsylvania.

Customers do not pay Brightway for its services, and the store’s revenue is generated through commissions and percentage payments from carriers for policies that are written. Franchisees are not charged a renewal fee, and there is a guaranteed buyout, so the business model is attractive for entrepreneurs as well as policy seekers, Miller says.

“People don’t have to buy other products every six months, but they do with insurance,” he explains. “If there’s a way to make that process easier by service, instead of just sales, then that’s something people want. Brightway is a retail insurance store, where you go and get all the facts. As a retailer, we can provide choice, value and convenience.”

Existing insurance agents, both single-company and independent, are plentiful in this area, and say that there’s no shortage of choice, or of convenience, in the Middle Tennessee marketplace.

They also say that there’s no reason why the company can’t succeed, but it all boils down to informed consumers, and the choices they make.

“I see this more as marketing than anything,” says Caroline Pistole, a State Farm agent who operates her agency out of Franklin and has clients throughout the Nashville area.

“It seems that they are an independent agency and just doing it a little differently. Those agencies have contacts with many different companies, and sell their products. It’s like a store that sells mutual funds vs. an Edward Jones office; there’s really no difference except in the way that it’s marketed.”

Miller says marketing does make the difference, but Brightway also benefits from its growing sales volume and size. He also touts the usual suspects, such as customer service and strong word of mouth, when he points to the company’s success so far in advancing its model and bottom line.

“We have built-in efficiencies that a smaller shop does not have because of the size of our company,” Miller says. “A one-office independent agency can’t match that. We have an entire service center that is providing a lot of behind-the-scenes work, doing the heavy lifting to help the agents out on the front end.”

And the marketing aspect may be what carries the day. Brightway’s storefront model provides a new form of branding, which is key to success in the insurance industry, said Brennan Paris, executive vice president of the Professional Insurance Agents of Tennessee.

“You keep seeing companies coming out with creative ways to tap into the different clienteles out there,” Paris explains. “People know who GEICO and Progressive are because of their marketing. This store’s logo may do the same thing. That’s valuable to companies that have great products, but are not well known. That’s where the Brightway folks can find a niche. If people get familiar with their logo, and know what it is and trust it, then that’s a good use of their marketing dollars.”

The convenience angle is a good one to play, Paris adds, but since most single-company agents are also in the community, it’s not as much of a factor.

“It’s a competitive marketplace, and it’s not just about being the closest,” he says. “If you go a single-company agent, you get one set of prices. An independent agent can give you more quotes, because they represent more companies. That lets the consumer compare prices in one location, which is valuable for consumers who want to shop around for prices when it’s time to renew policies.”

Brightway launched in 2003 with one store and 2,000 policies, and now has 500 employees and 130,000 policies in its existing network. It has been named to Inc. magazine’s 500 fastest-growing companies and has received accolades from the Jacksonville Business Journal and Trend magazine. Sales last year were $168 million, $108 million the year before and 2012 is projected to top $240 million, Miller claims.

As far as the actual products go, coverage is available from a variety of companies, which differs by state, and writes home, automobile, business and life insurance as well as coverage for recreational vehicles, vacation homes and more.

Current and future growth is being driven by population centers as well as existing coverage rates, he adds.

“We have targeted 30 of the country’s top 50 metro markets, and from that we’ve looked at where premium averages are high to narrow our focus,” Miller says. “Those are the markets that we want to hit. We are about finding the right coverage, and making sure the customer has what they need. Less money, more coverage is our goal.”

State rules and regulations vary, but Miller says Brightway also can bring a fresh approach to markets by offering coverages from companies that may not have a presence there. That’s something he says Middle Tennesseans can anticipate.

“Insurance companies have had to learn how to specialize, and not offer all things to all markets,” he says. “One company may not provide all your coverage now; it’s broken into different areas because the companies have to be competitive where their strengths are.

“That drives the Brightway model, where we represent many different carriers and the store focuses on the customer experience.”

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