Are Insurance Customers Leaving The Agent Behind?

auto insurance quote

Photo from Ian Friemuth

According to a recent article from Independent Agent Magazine (IAM), the insurance customer of today is starting to edge away from local agent loyalty, though a majority continue to be in favor of buying in-person or over-the-phone from a professional within their community. Online shopping, mobile devices, and buyer uncertainty, have resulted in something of a multi-channel approach to buying insurance, and that’s not an entirely bad thing for the independent insurance agent.


Online Quoting

Retrieving online insurance quotes is hardly a new activity. Customers have been using the Internet to compare prices since the days of dial-up. However, with changes in the speed of Internet connections and an influx of media accessibility, more customers are taking the next step and buying directly from the companies themselves. In fact, since 2009, when only 16 percent would avoid their local insurance agent, 22 percent are now finding alternate routes of purchasing insurance coverage.

At the San Antonio-based Big “I” Young Agents Leadership conference in September 2013, comScore senior director Susan Engleson addressed online quoting as well as the growing connection that consumers have to digital.

“One very important trend we’ve seen—we’ve been doing the study since 2008, and this has been very consistent—is that people go online to get a price, and then they go offline to purchase,” Engleson said. “Tons of people quote online and then buy offline, and most often with a local agent in person.”

Putting numbers to the findings, it’s clear that the“multi-channel” approach is more commonplace among consumers wishing to shop online in addition to using other methods. When asked if they have ever purchased auto insurance offline after receiving a quote online, 81 percent said they had, with 52 percent of those having bought from a local insurance agent in person, and 32 percent with a local agent over the phone.


Migration To New Devices

Engleson also pointed out that between June 2012 and June 2013, the percentage of US mobile owners, who own or have access to a smartphone increased from 47 percent to 59 percent. Furthermore, these devices have more than doubled the amount of time customers spend with digital media over the last three years while desktop usage has stayed approximately in the same place as before.

“When we think about the digital landscape, it’s very important to keep in mind that it’s not just what people are doing on their PCs,” Engleson said. “Just looking at the total digital population, you can see it’s very flat for people using desktops. When we look at the mobile audience, we can see that the mobile trend is definitely going up.”

Engleson dismissed the idea that mobile usage is “just a fad,” adding, “There’s just been rapid, rapid adoption, and we do see almost half the people who have a mobile device doing some sort of financial service activity.”

Most mobile activities are tied directly to banking, but Engleson believes it is only a matter of time before that expands, stating that behaviors typical of the PC are “definitely moving to mobile devices.”

“Even as quick as people have adopted smartphones, tablet adoption actually had a much steeper adoption curve,” she explained. “A few years ago, tablets barely existed. And now you can see that a huge amount of time is being spent on smartphones and tablets.”


Social Networking

Continuing the last point, it’s important for independent agents to know that where there’s mobile, there’s also social media. If consumers have made the jump to smartphone or tablet, then they most certainly have some form of social media account, whether that’s Facebook, Google+, Twitter, or all three.

Having a social media strategy is as important to the independent agent as it is to insurance companies. After all, if you want to attract new business and placate existing clients, you need to be accessible, and that means going where they are.

Connecting on social media adds a layer of immediacy that customers respect and appreciate.


Multiple Quotes

Engleson suggests that for independent agents to succeed in the digital age, they need to capitalize on areas where they have a distinct advantage. Pointing out comScore data that “shoppers most of all want multiple quotes,” Engleson believes agents are in a great position to deliver.

“For people who called or visited local agents who are captive, most of them aren’t getting multiple quotes,” Engleson said. “And people who are going to independent agents, it’s much easier, obviously.”

Engleson also thinks that agents shouldn’t be lulled into a false sense of security simply because 71 percent of customers still prefer to work with a live person, adding that agents need to continue being price-competitive.

To support that belief, comScore data found that “the local agent quoted me the best price” was the No. 1 reason consumers chose to continue their pursuit of the agent channel.

“Ten years ago, people thought the Internet didn’t exist,” Engleson said. “So their only option was to go to an agent. What we’ve seen is that the reasons people are going to an agent are changing as they get more options.”


In Summary

Despite some doom-and-gloom predictions about the future of the independent agent, the evidence still clearly favors the contrary. Thus far, agents have shown a resilience in the face of changing technologies. For continued success, they should embrace digital as much as their customers have and take advantage of pricing and other customer service opportunities that lay beyond the reach of digital media.

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