When it comes to consumer attitudes on purchasing, independent agents still have an edge.
visit with was third at 13 percent, after “protecting my assets/possessions.”
Online purchasing A record 2.8 million policies were purchased online in 2009 – an increase of 22 percent from the previous year. For some perspective, only 700,000 policies were purchased online in 2004.
Self-servicing Retaining customers is crucial for both agents and insurers. One of the most important aspects is payments. Fifty-five percent of customers pay for their bills on a monthly basis. While a little over one-quarter of all customers pay their premiums in full up front to obtain discounts, there is a large opportunity to provide ease of use functionality to the customer who makes monthly payments, by providing this functionality through the agent’s Web site (as well as at the carrier’s site) – to keep the agent’s Web site in the forefront of the customer’s mind.
The opportunity for independent agents lies with assisting the consumer in understanding his/her insurance needs. Seventy-eight percent of consumers are still purchasing offline, and by far the largest reason is that they want to speak with someone who can guide them. Seventy-one percent listed this as their primary reason for purchasing offline. The key is making it easy for the consumer to find agents on the Web, as well as connecting the consumer to the agency via technology tools like online quoting on the agency Web site, live chat, online forms requesting agent call-back and using social media. Additionally, more consumers are able to sign all needed policy documents online. A full 82 percent reported using online tools such as electronic signature in 2009. Overall, consumers are expecting easy-to-use functionality and rapid service. Agency carriers are producing better long-term retention. Thirty-nine percent of all shoppers switched their auto insurance in 2009. However, State Farm and Nationwide had the highest retention of those consumers staying with their insurer five years or more. GEICO and Progressive had the lowest five-year retention. While price was the biggest driver for switching insurers (49 percent), having a real person with whom the insured can
Many carriers provide eService links that can be placed on their agency’s Web site, allowing clients to go the agency Web site first and then link to the carrier’s sign-in and make a payment function. In total, 34 percent of customers pay their bills online – either at the insurance carrier’s eService Web site or by online banking. Online activity varies with age For those shopping online for Auto insurance, the biggest increases were between ages 18-24 and 25-34. All age ranges over 35 decreased. Twenty-three percent of 18-24 year olds purchased their policies online in 2009, compared to only 9 percent for 55+. Percentages purchasing online decreased for each range: 18-24: 23 percent 25-34: 21 percent [ 26 ]
35-44: 18 percent 45-54: 15 percent 55+: 9 percent Conversely, the percentage of those purchasing through an agent rises from 60 to 70 percent as age ranges increase. Buying with or without an agent The top four reasons consumers give to have bought through an agent include: wanted a real person to visit with or call (38 percent); have always used an agent (34 percent); wanted local agent from one company who could help with all insurance needs (26 percent); agent quoted best price (25 percent). The top four reasons consumers chose not to go through an agent in making their purchase were: more convenient to use Web site or 24-hour toll-free number (27 percent); faster to purchase online or through toll-free number (23 percent); got a quote with a toll-free number and decided to purchase (23 percent); prefer Web site or toll-free number (16 percent). Agents can employ available technology tools to offer the same convenience and speed as the direct carriers, but add on top of that the personal advice and local presence they offer. Seventeen percent of respondents indicate they purchased a policy through an affiliation with an association or a group. Thirty-one percent indicated they would definitely purchase “pay-as-youdrive” insurance – more evidence that consumers are looking for discounts wherever possible.