How will driverless cars impact the auto insurance market?

Insurance star from a family-owned agency shares his insights about this growing tech

How will driverless cars impact the auto insurance market?


By Gerv Tacadena

For most family businesses, there is always the challenge of ensuring that the legacy lives on. It takes commitment and undying love for the business to thrive and continue.

Following in the footsteps of his grandfather and father, Scott Saunders (pictured) is the third generation of Saunders to further the legacy of Howard Baker Saunders, who established the Saunders Insurance Agency in 1951. After finishing his bachelor’s degree in business management and marketing at the University of Rio Grande in 2009, Saunders joined his father, John Saunders, and worked for the family-owned and operated agency.

Now, Saunders serves as the agency’s vice president and an agent/broker with a specialization in commercial, public entities, farm, employee benefits, and personal insurance. Over his first five years with the agency, he was able to grow the direct P&C premium by 22% and has also been instrumental in the agency’s 45% jump in gross profit over a decade period. In 2010, he was named Producer of the Year by the Mountain State Agency Alliance Ohio.

Today, Saunders is leaving his own legacy for the company by transforming and rebranding the agency’s marketing strategies through the use of digital media.

Outside his career in insurance, Saunders has been active in his participation in the Downtown Revitalization Project, where he serves as board secretary. He is also a member of the Business School Advisory Board of his alma mater.

In this exclusive interview with Insurance Business, Saunders shares how the family business has been changing the game since the 1950s and how important it is to honour its legacy. For those in the auto insurance market, Saunders tackles the challenges posed by the growing market share of driverless cars. He also paints a picture of a world where insurance does not exist.

Please share with us how you got into the insurance industry, what led you to this career?
Insurance is a family tradition for me. My grandfather, Howard Baker Saunders, started our family business in 1951 upon graduating from Ohio State University where he has since been inducted into the Hall of Fame for Golf. 

My father followed him by joining Saunders Insurance Agency in the late 1970s. I joined the agency after graduating from college – marking the 3rd generation of Saunders to take on the family business.  Unfortunately, my grandfather’s golf game wasn’t passed down to me but luckily his knowledge of insurance was.

Tell us briefly about your company and its role in the insurance industry. What makes it different from other companies in the same space?
Saunders Insurance Agency (SIA) is a family-owned and operated independent agency in Gallipolis, OH along the Ohio River. SIA has a strong reputation in Southeast Ohio and a track record of serving our clients for generations.

Our competitive advantages include strong referral programs, creative digital marketing, and a wealth of great companies to offer clients.  SIA’s newly formed Community Referral Program turns every referral into a charity event: for each referral SIA receives, we donate $10 to a local charity of the year (A Heart Like Ava for 2018). 

SIA also takes advantage of creative digital marketing strategies including an enhanced website that hosts our blog and community events, use of social media accounts on Facebook, Twitter, Instagram, & LinkedIn, e-newsletters, digital billboards through Rocket VII Interactive LLC, video marketing through our local theater- Silver Screen VII, and offering free Nike & Under Armour SIA branded swag to clients.

We also offer clients the choice among the best insurance companies in the industry: Nationwide, Liberty Mutual, Auto-Owners, Grange, Travelers, Allstate, Safeco, Progressive, and State Auto in the property & casualty segment with United Healthcare, Medical Mutual of Ohio, Anthem Blue Cross Blue Shield, and Aetna in the healthcare segment. Our agency niche markets include farm, public entitles, employee benefits, personal packages, & commercial business packages. The agency’s location allows us to compete for clients in both Ohio and West Virginia. 

What or who do you think has been the secret to your professional success? How do they motivate you?
The fact that my family’s name is on the door provides all the motivation needed.  Knowing that clients have trusted our family to protect what matters most to them for over 50 years is extremely humbling. 
What do you think are the most challenging issues facing the insurance industry today?
The most challenging issue facing the insurance industry to me is the future of the auto insurance market with the use of driverless cars and its growing market-share. The issue of who is responsible for liability damages from accidents involving driverless cars will be a huge determinate of the insurance agent role within the auto insurance segment. 

If the car manufacturers take sole responsibility, personal auto insurance carriers will have to transform their coverage offerings to become excess over the manufacturer’s coverage. The possibility that car manufacturers will follow Tesla’s lead and begin offering auto insurance with the purchase of driverless cars creates an additional challenge to the role of agents in the future auto insurance market. Insurance brokers who previously focused on personal auto insurance will have to shift their focus to property and commercial lines. 

What are your hopes for the insurance industry moving forward?
As an independent agency, I’m excited about the recent trend with major captive insurers like Allstate & Nationwide expanding the role of independent agents within their companies. The more choice for consumers, the better the chance that independent agencies can compete with direct insurers.

Hopefully, the insurance industry focuses its marketing to consumers on coverage rather than price. I think the biggest detriment to insurance in the past has been the focus of some carriers on price only - forcing our product to be seen as a commodity rather than the financial tool it really is.

Describe a world without insurance.
It would definitely be chaotic. People really don’t think how much insurance impacts their lives. You can really translate the need for insurance into every news event you see. Without insurance, family finances would be wrecked in the process of rebuilding after a major weather event. Without insurance, corporations would have to charge consumers more in order to fend off the various lawsuits you see today. Your loved ones’ futures would be less secure without the benefit of life insurance and each medical emergency would bankrupt your family without health insurance.
If you were not working in the insurance space, what would you be doing now?
If I hadn’t chosen the family business of insurance, I would be working in someone’s marketing department or else running my own marketing firm. My passion has always been the marketing side of business, which thankfully I can run in our agency while still acting as a broker. 
What are your passions or hobbies outside insurance?
I’m a sports fanatic, so I gravitate to any sporting event. However, my favourite sport is football and my favourite teams are Dallas Cowboys and Ohio State Buckeyes. I also enjoy working out as release from the stress of insurance. I’ve been at a local Crossfit box (Crossfit Gallia) for the past three years.  Outside of athletics, I enjoy my work on the Downtown Revitalization Project board which is a non-profit with the goal of bringing new businesses and developing existing businesses in Downtown Gallipolis.
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