When consumers make an insurance purchase decision, there are often many questions: coverages, coverage levels, deductibles, which company to buy from and how best to make the purchase. It can take anywhere between just minutes to several hours to compare prices, talk with family and friends about options and weigh the pros and cons of different coverage levels. The process is arduous, but there’s help.
With the rise in online comparison sites and tools, buying car insurance is becoming more transparent and easier to navigate. Anyone with internet access may now go to a website, type in their information, receive a rate and purchase a plan without having to speak to anyone. While the future of buying car insurance may be moving online for some, this does not mean the imminent, or even long-term demise, of the local insurance agent. They can, do and should still play a very important role in the process, due to the perceived and actual complexity of the product and the personal touch that many consumers desire.
Insurance is complex. Often, the notion is that the internet will eliminate the need for insurance agents, just as the rise in online travel sites put travel agents out of business. But this analogy is not comparable. It’s more pertinent to think of the insurance agent more similarly to a real estate agent. One can research houses online, visit the property and even come to the decision to purchase on their own. However, when it comes to completing the sale, it’s likely that a real estate agent would be worth having involved in completing the purchase. The real estate agent will know the lenders and bankers who can help you get a mortgage. They will have names of lawyers to facilitate the closing process, home inspectors to contact and will coordinate the purchase with the seller’s agent. The real estate agent streamlines the process and makes a difficult transaction as easy as possible.
Stock brokers are another example of humans remaining relevant in a computer-based industry. With the rise in trading sites and the ability to purchase stocks directly over a computer, it would seem likely that brokers are unnecessary. However, they stay in the process because they hold an expertise in an industry that is difficult to navigate alone. While a person might do research and think about their stock options regularly, it pales in comparison with a broker, whose sole job is to understand the market. Similarly, an insurance agent can help consumers navigate the complex and often confusing insurance purchase process and play an important role for the consumer long into the future.
The real challenge for insurance agents is remaining part of a consumer’s consideration. With more than $3 billion spent for advertising by the big four auto insurance companies, it is essential to find a new way to stay relevant. A whole generation now is shopping for insurance and know nothing more than geckos, discount double checks, Flo and Mayhem. How can any independent agent company or a local agent compete against the onslaught of advertising? Agents need a partner, one that will ensure they are still in the consumer’s consideration, one that highlights the value agents can contribute to the process.
Agents make buying car insurance more personal. Buying car insurance directly online makes the process a transaction. Some people want to get rid of the middle man and buy a policy on their own time without having any human interaction. But some refuse to buy car insurance without speaking to someone about the decision first, and not everyone will even start the process online. The combination of online opportunities and going directly to an agent appeases shoppers in every avenue.
New business volume. Online shopping avenues can be made more personal and understandable to consumers with the option to speak with an agent, but agents will also benefit from online comparison tools. For agents who work through smaller insurance companies, being more available online may bring them new consumers, who would never have heard of their company on their own. The internet may deliver streams of new potential clients straight to their doorstep, without having to do their own marketing, which saves the agent time and money.
The insurance environment is changing, but the only ones getting left behind are those not adapting to the new current. For those agents who do follow the trend toward online insurance options and work with the new comparison technology trends, the rewards will be a wider reach of marketing effort for lower costs to acquire new clients.
This blog has been reprinted with permission.
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