For the first time, a majority of new buyers of auto insurance initiated their policy purchase by applying for a rate quote online, according to a new study by
The “2011 U.S. Insurance Shopping Study,” the fifth of its kind, examines consumer shopping and purchasing behaviors. The study found that while 54% of insurance shoppers now report getting their quotes online, the agent channel remains vital to closing sales.
“This transition to websites as the dominant lead-generation channel is an important shift for insurers to recognize and address in their marketing and sales strategies,” says Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. “While nearly one-half of all accepted Web quotes are closed by either an agent or call center representative, customers are clearly more often looking to insurers’ sites or third-party sites in the early stages of the shopping process, and this behavior is blurring the lines of how we traditionally think about the discrete sales channels.”
The study also found that this proclivity to price shop was adding to the rate of policy churn in the U.S. market. Among insurance customers who indicate shopping for insurance in 2011, 40% switched to a new insurer—up from 33% in 2010.
“In 2010, the insurance industry spent $5 billion on marketing and advertising, with the top four companies alone spending more than $2.6 billion,” Bowler says. “As a result, the rate of shopping has increased significantly year over year, as has the policy defection rate.”
