Insurance Roundtable: Agents Need to Capitalize on Online Traffic

Auto insurance agents need to drop the Yellow Pages and go online to keep pace with the growing number of consumers checking out quotes or purchasing their policies over the Internet, a new report based on a recent roundtable discussion involving West Coast industry professionals states.

According to the report, released this week by the WIAA Education & Research Foundation—a nonprofit group formed by the Western Insurance Agents Association—growing numbers of consumers are choosing to check out quotes and buy their auto insurance coverage online as opposed to dealing with an agent in a brick-and-mortar setting.

The availability of online methods for taking care of vehicle coverage needs has created a “growing distance between the consumer and (independent agents),” Michael Jans—president of Oregon-based Agency Revolution—told those in attendance.

Jans said there has been a major shift in the ways in which consumers shop for vehicle coverage, starting with an initial move toward online commerce that began in the mid-1990s and was made abundantly clear in a 2011 J.D. Power and Associates study that found that 54 percent of consumers buying vehicle coverage for the first time began by applying for online rate quotes.

Finger touching keyboardThree companies that have led the way in direct-to-consumer, online policy sales—GEICO, Progressive and Esurance—supplied more than 70 percent of online quotes in 2010, according to Jans.

The report bolsters a growing body of research that shows that consumers are increasingly opting to bypass agents and shop for vehicle coverage on the Web.

Federal officials say that 70 percent of U.S. households now have access to high-speed Internet service. And a survey released earlier this year by marketing research company comScore found that about 20 percent of respondents had purchased a vehicle policy online—an increase of 5 percent compared to two years ago.

Meanwhile, the number of people who had used the services of an agent had slipped to just over 6 in 10, a 6 percent decrease from 2009.

According to the WIAA Foundation report, much of the switch to online sales is happening because of changes to the high-tech communications devices that consumers use. People who are shopping for vehicle coverage on their mobile devices get search results that are more focused on their geographic location and include fewer advertisement-driven results, Jans said.

They also tend to be more focused than those using the Internet from their personal computers on searching for something specific, rather than just surfing the Web, Jans said.

“Surfing is not something people do on their smart phones,” he told the other participants in the roundtable discussion. “They want it to be easy to use and they want results.”

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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