J.D. Power and Associates have found that a majority of the first-time buyers prefer to obtain their quotes online, instead of taking the traditional route such as agents or call centers. The California-based company has found that for the first time over 50% of the first-time insurance buyers have actually obtained online quotes.
During the 2011 US Insurance Shopping Study over 54% of the shoppers had turned to the net to obtain their first quote, but there is the majority that still purchase auto insurance through independent agents or call centers.
Since the last five years and ever since the study has taken place the insurer’s website has played a huge role in generating business by bringing in new buyers. Business is steadily increasing through these websites but at the cost of call centers and local agents.
This transition from the traditional channels to the company’s websites is a dominant trend that insurers need to recognize. They must now develop new sales strategies and develop new marketing strategies as well, states Jeremy Bowler, Senior Director of the global insurance practice, J.D. Power and Associates. Around 50% of these accepted web quotes are closed either through call centers or through agents. Customers in general look into the insurer’s websites or other third party website during the initial stages of their shopping process. Due to this shift in behavior, the manner in which business was done traditionally is slowly disappearing.
Even agents are noticing a dip in the insurance policies that they could sell earlier. Since the last five years, their sales have certainly come down. During 2007, around 57% of them had purchased insurance through these agents, but that figure went down to 52% during 2011. There was a drop in the insurance purchased through the call centers as well as it went down from 22% during 2007 to 20% in 2011. But there has been a steady increase in purchases over the internet. It has gone up from 22% in 2007 to 28% now.
Now there are more buyers who are keen on purchasing a fresh policy every year, as per the details available from the survey. During 2009 it was at 27%, 30% in 2010, and 33% now in 2011.
Bowler also states that the insurance companies had spent a whopping $5 billion on marketing & advertising during 2010. He feels that this may have increased customer shopping to some extent. But the real shoppers do so in order to get a good deal or due to some life-altering event.
