how do consumers buy insurance online?

What You Should Know About How Consumers Purchase Insurance Today

  • September 6, 2017

The insurance industry is traditionally behind the times when it comes to incorporating technology, but there is data to indicate that this could be changing. Part of the challenge for bringing the insurance industry into the digital age has been a lack of implementation of online searching tools.

Given that many people start their search for various types of insurance including health, life and long-term care online, it is important for the industry to be able to adapt and to provide the information that consumers need to make informed decisions at their fingertips. Another challenge for the insurance industry has been the number of blogs and other types of information that have popped up in an effort to educate people about insurance needs. However, there is now so much information that it could almost be overwhelming for someone who is interested in researching their options.

There are plenty of different myths out there in particular about health insurance and long-term care insurance that could ultimately dissuade consumers who had every intention of researching and purchasing from following through. Although there is current uncertainty related to health care reform and the fate of the Affordable Care Act, for example, consumers have become increasingly confident in shopping for insurance online.

Research Process Begins Online

According to a new study conducted by Connecture, the health involvement software company showed researched results for more than 8000 Americans who tried to get health insurance on their own.  They found that there was an increase from 14% to 42% when comparing the number of consumers who began their search online in 2012 through 2017. Four times as many Americans are using online tools to shop for insurance online and this has important implications for the insurance agents in the industry who are looking to form personal relationships.

Connecting one-on-one with the potential customers in-person can be an extremely powerful experience but it is one that today’s consumers rarely have time for. Given the ease of online tools, it is important for insurance agents to adapt their own strategies to meet the consumers where they are at.  If a consumer, for example, is interested in shopping online, the agent should have an online presence that is replicated throughout social media, a website and elsewhere.

Consistent engagement with consumers in this way and publishing high-quality content whether it is in the form of a video or written material can help to illustrate the expertise the insurance agent and provide meaningful information that empowers consumers to make informed decisions about their future.

Every year, JD Power conducts a U.S. Insurance Shopping Study to illustrate how consumers are engaging with auto insurance, health insurance, and life insurance. The 2016 results showed that insurers that lead in a digital shopping channel are also the leaders in terms of premium growth. The study which has been conducted annually for a decade looks at purchase behavior, purchase experience satisfaction and auto insurance shopping behavior among customers who recently purchased insurance.

They look at distribution channels, price, and policy offerings to determine a consumer satisfaction. Since shopping for insurance has become more popular online than ever before, trends in auto insurance are likely to transfer over to health, life, disability and long-term care. Those insurance companies that invested in making their website easy to use and improving functionality experience a much higher percentage of premium collected than their competitors.

Reach Them Where They Are At: Consumers Want Insurance Research Online, Purchase with Person

Consumers who are shopping for an insurance provider often go online to do so: since 74% of shoppers will investigate their first options by getting quotes, researching information or using insurance aggregators. It is important to realize however that although many people start their search online, it rarely concludes that way. The JD Power Study showed, for example, that only 25% of people purchased their policy online.

Did you know that the vast majority of closed policies come directly from an agent? Up to 22% of people who ultimately purchased a policy did so through a call center but 50% came from an agent. This means that as an agent you should tailor your opportunities and conversations to initiate the communication online but still rely on the in-person communication that can help to close the sale. The truth is that while many people want to arm themselves with information before making a decision, they ultimately want to close the experience by working directly with an agent.

This can help you craft a 2018 marketing plan aligned with these facts and your individual preferences. While many people want to shop online they want to talk to someone when they purchase that insurance to ensure that they get their questions answered about the policy and to verify whether or not they are getting the right coverage. This opportunity for agents is a huge one that can be exploited both in the fourth quarter of 2017 and throughout 2018.


About the Author Laura Pennington