Liberty Mutual by Yuan Cao

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Liberty Mutual

Published on Nov 18, 2015

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PRESENTATION OUTLINE

Liberty Mutual

Brendan Ronish, Adrianne Sarale, Michael Cross, Phillip Broussard, Yuan Cao

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2014 Revenue: $446.2 billion
Profits: $48.2 billion
1.8% growth rate
Revenues to be $486.9 by 2019

Market is mature and saturated, not many new entrants and because of growth rate is modest

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$3.3 Billion – $5.7 Billion

From 2006 -2011 advertising in the insurance industry rose from 3.3 bill to 5.7 billion

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This increase in advertising brought us… Flo

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Mr. Mayhem

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And Jake… from State Farm..

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Are these giant advertising expenditures really proving profitable though??

"When everyone's on one side of the boat, you need to get to the other side to avoid getting soaked."
- Warren Buffet

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Profits are driven by customer retention. Customer retention is created by positive experiences and an insurance agency’s ability to create value for their customer

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Investment for an insurance horizon spans multiple years, which is why retention rates are vital for profitability. Source: Hoopes, Stephen. “Balance Sheet: Rising premiums and interest rates will improve as the national economy stabilizes.” IBISWorld. July 2014

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According to JDPA, 81% of customers stay with their insurer if they feel “highly satisfied” in their first year source: http://www.jdpower.com/press-releases/2014-us-insurance-shopping-study

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Only 61% of customers stay with the same insurer if they experience poor service in their first year. Source http://www.jdpower.com/press-releases/2014-us-insurance-shopping-study

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