Liberty Mutual Insurance - Marketing Plan

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What do we do? The statement clearly says we help people live safer and more securely. When you purchase insurance it allows you to live your life “normally”. If you did not purchase auto insurance then, in theory, you would need enough money for your own damage exposure and liability exposure damages you cause. If you caused a major accident with over 100K in liability damages and did not have insurance then you would suffer financially for the rest of your life. Purchasing insurance allows you to live your life with a sense of security. How do we do it? We protect the assets you value most. Whom do we do it for? We will do it for anyone who decides to purchase our products. What value do we bring? This one is the key selling point. The value we bring is the assets you value most, those assets you can’t go on without, those assets that are essential to your life.

The following is a SWOT analysis on Liberty mutual. Before we break down each component here is a background on the company from their website. “Liberty employs more than 50,000 people in approximately 900 offices throughout the world, and we offer a wide range of insurance products and services, including personal automobile, homeowners, accident & health, commercial automobile, general liability, property, surety, workers compensation, group disability, group life, specialty lines, reinsurance, individual life and annuity products.” (Libertymutual.com)

Strengths

- Strong financial stability with growing revenue

- Multi-line distribution method

Weaknesses

- High employee turnover

- Declining JD Power service scores for Personal Insurance

Opportunities

- Continue global expansion

- Expand insurance offerings beyond traditional means

- Develop technology

Threats

- Possible aggregator emergence in U.S.

- Driverless vehicles

Strengths:

- Strong financial stability with growing revenue

- Multi-line distribution method

Liberty is a fortune 100 company with over $39 billion in revenues in 2014. It’s financial portfolio has been ranked as positive or strong by several rating services. In April 2014 “Standard & Poor’s Ratings Services announced that it has raised its ratings on Liberty Mutual Insurance Co. to ‘A/A-1′ from ‘A-/A-2′, as well as its ratings on parent company Liberty Mutual Group Inc. to ‘BBB’ from ‘BBB-‘, and its ratings on all of the group’s other companies by one notch. At the same time S&P revised the outlook on all of the companies to stable from positive.” (Insurance Journal) Liberty’s strong financial position allows them to invest their earnings elsewhere, think long-term solutions even if there are short-term downfalls, and be more aggressive when selling insurance in riskier markets.

In April 2008 Liberty acquired Safeco Insurance for approximately $6.2 billion. This acquisition improved the Liberty brand by accomplishing two important factors. First, this expanded the Liberty brand nationwide. Liberty headquarters is in Boston, MA and much of their business is on the East coast and expands to the Midwest. Safeco insurance headquarters is in Seattle, WA and their business is mostly West coast with some Midwest exposure. Together their brand expands nationwide. Secondly, this allowed Liberty to sell insurance through multi-line distribution effort. Liberty traditionally sold their policies direct through a call center while Safeco utilized independent agents. Now “Liberty Mutual Group and its companies are dedicated to our Customer Choice Model, allowing you to do business with us whatever way you want. You can access Liberty Mutual via our call center, website, your agent/broker, or our reps from our network of regional independent agent companies.” (Libertymutual.com)

Weaknesses:

- High employee turnover

- Declining JD Power service scores for Personal Insurance

Liberty has struggled to maintain a consistent work team on the front lines in both the personal insurance and commercial insurance organizations. While the sales team continues to increase, creating more customers, the claims staff was stagnant. This resulted in more claims per representative which increased overtime, customer complaints, stress, and ultimately employee turnover. This has a domino effect on each organization. The high employee turnover puts pressure on the remaining employees to “pick up the slack” creating poor employee morale and low employee engagement. High turnover rates create a need to hire more employees which takes time away from claims managers. Instead of focusing on their office goals they are constantly interviewing candidates to achieve acceptable staffing levels. In turn, new employees need training. This increases expenses, to train the new employees, and takes away training needs for the current staff. All of these situations negatively affect the customer experience when a claim does occur.

The standard for service rankings in many industries is JD Powers. “Organizations around the world have relied on J.D. Power as a trusted advisor for deep expertise in the industries we serve, advanced research science to drive insights, and a proven success record for driving results.” (JDPowers.com) Liberty ranks in the bottom third for JD Power claim satisfaction for both auto and home. They have fallen from just below average to bottom third over the last couple years. Traditionally, Liberty’s pricing has been higher than their competition because of the coverage they provide and the service they offer. If their JD Power rankings do not improve their sales could suffer because customers will switch when another company offers the same product with better service.

Opportunities:

- Continue global expansion

- Expand insurance offerings beyond traditional means

- Develop technology

The last few years Liberty has expanded their name globally and has been very aggressive in more volatile markets. “Liberty