In 2004 we continued to build a foundation for growth by introducing new products, appointing new agents in our target states, and bolstering our overall marketing efforts. Progress in each of these areas has given us momentum in 2005 to transform opportunities into success.

An Opportunity to Meet Our Customers’ Needs
Our market approach is based on the premise that our customers are not a homogenous group. Therefore, our marketing strategy is designed to accommodate various customer segments that make lifestyle choices based on their specific needs. This approach is materially different from companies that market to consumers with a one-size-fits-all strategy.

Our business development staff describes our marketing strategy as the 4 Ps—Segmented Products, Segmented Pricing, Segmented Agency Plant and Segmented Promotion.

Segmented Products—We offer three distinct personal auto products, each one designed to fit the lifestyle and needs of a different customer base:

Our Low Cost policy is designed for individuals who may have blemishes on their driving records or for those who want to buy insurance to meet their state’s minimum insurance requirements. These individuals are primarily focused on obtaining basic coverage at the lowest price.

Our Value-Added policy is designed for those customers who want to buy insurance to protect their assets, but may have a violation or two on their driving record. This policy has broader coverage than the Low Cost policy.

Our Premier policy is designed for the customer who typically has a clean driving record and wants higher limits and even broader coverage.

Segmented Pricing—We customize our rates using multi-variant analysis based on risk attributes and coverages. Each of our three personal auto products has a separate rating plan.

Segmented Agency Plant—We believe that different insurance agencies market to different clientele. As a result, we segment our agency force and offer them the personal auto products that best fit their customers’ needs.

Segmented Promotion—Our promotional efforts are also aligned with the product and service expectations of our customers and our agents.

We began this successful approach to meeting our customers’ and producers’ unique needs over ten years ago in California. In 2005, we will continue to implement this segmented strategy in our other target states.