A lot of readers were miffed to learn in one of my recent columns that most car insurers have yet to fully comply with a state regulation requiring that people's driving records, rather than their ZIP Codes, be the primary factor in setting rates.
West L.A. resident Liz Brown was so incensed that she wrote to the chairman of her insurer, Mercury Insurance Co., to complain about the $1,256 she's charged annually for her 1997 Honda Del Sol.
And you know what? He called her back.
"I have to admit, I was blown away that he took the time to call me," Brown, 53, said. "I wasn't really happy with what he had to say, but what great customer service!"
I'm not exactly known for handing out milk and cookies to corporate leaders. But it's worth taking a moment to acknowledge a local executive who gets it right -- and to ask why more execs don't understand the importance of showing customers a little respect.
Mercury's chairman is George Joseph, who founded the Los Angeles company in 1962. He served as chief executive until early last year.
Joseph, 86, began his career as an insurance actuary earning $225 a month and later sold policies to consumers. He now has a net worth of $1.2 billion, according to Forbes magazine.
We met in Joseph's modest red-carpeted office off Wilshire Boulevard near Hancock Park. He moved a bit slowly, which wasn't surprising for a man of his years, but spoke with confidence and precision, easily calling up facts and figures from memory.
Joseph and I didn't agree when it came to using ZIP Codes for insurance rates -- he's for and I'm against -- but we'll get to that in a moment. What we did agree on was the importance of customer service, which has become a lost art in corporate America.
"You used to be able to pick up a phone and talk to people," Joseph said. "That doesn't happen anymore. Now there's e-mail and automated switchboards.
"People want to talk to people," he said. "They want to talk to people who are knowledgeable and who can answer questions."
Mercury, California's third-largest vehicle insurer in terms of market share, has about 1 million policyholders and 5,000 agents nationwide. But Joseph said any letter addressed to him personally or to the chairman of the company will find its way to his desk.
He said he typically receives eight or nine such letters from customers each month, mostly involving problems settling a claim.
In most cases, he'll call the letter writer to either discuss the situation or get more details. Then he'll make sure someone at Mercury addresses the problem.
That's not to say all claims or complaints get settled to the customer's satisfaction. Consumer advocates say Mercury has a reputation for being unusually stingy toward policyholders.
But for the chairman of the company to make it his business to reach out to customers and show some good old-fashioned courtesy, that alone makes Mercury a rare breed among corporations that all too often make customer service their lowest priority.
Joseph blames this on chief executives who hop from company to company, typically staying only long enough to make shareholders happy and cash in a pile of stock options.
"There's no loyalty," he said. "There's only loyalty to their profession, not to their company. There's no loyalty to customers."
Joseph, who came of age during the Great Depression, also observed that most CEOs have never experienced truly hard economic times. They don't understand that when trouble hits, your customers may be your last bulwark against catastrophe.
"Some companies treat customers like an adversary," Joseph said. "I believe you can't do that."
When it comes to using ZIP Codes to set rates, though, Joseph hasn't been the consumer's best friend.
He and Mercury were the most active opponents of Proposition 103, a ballot initiative passed by California voters in 1988 that limited what insurers could charge for premiums. It also required that car-insurance rates be based primarily on a person's driving record and miles driven, not where he or she lives.
"Of all the insurance industry executives, George Joseph has been the most hostile to Proposition 103," said Jamie Court, president of Santa Monica-based Consumer Watchdog. "He hates 103. There's been no bigger opponent."
Implementation of Proposition 103 was held up for years by challenges from Mercury and other insurers, which insisted that the measure unfairly penalized rural dwellers who may not face the same road hazards as drivers in congested cities. ZIP Codes, insurers argued in vain, are the best way to reflect this distinction.
The change will finally take effect July 14. As of the beginning of this month, 54 insurance firms had readjusted their rates to fully comply with Proposition 103, according to the state Department of Insurance. More than 230 others had not.
Joseph said Mercury was "about 90% compliant" with the regulation.
"I think it's a tremendous waste," he said. "It doesn't accomplish anything. Some people in West Los Angeles or Beverly Hills may see lower rates, but rates are going lower overall because there has been a drop in accident frequency."
Be that as it may, Proposition 103 ensures that rates stay low, at least for drivers with clean records.
Joseph made his case to Brown after she wrote to complain about the ZIP Code-based rate for her Honda, and she remained unconvinced.
"I've been driving safely for 37 years," she told me. "That's what my insurance should be based on."
Brown said she'll be shopping around for a new insurance provider.
No matter how much I disagree with Joseph on his Proposition 103 stance, I still give him enormous credit for reaching out to customers and taking personal responsibility for his company's actions.
"I treat people like I'd like to be treated," he told me.
Such a simple idea. It's a wonder more business leaders haven't figured it out.
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