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What You Should Know About How Consumers Purchase Insurance Today

What Agents Should Know About Client’s Approach To Purchasing Insurance

From retail to real estate, technology makes a diverse range of industries more accessible to consumers. Artificial intelligence is even expected to boost retail profitability by up to 60 percent. So, why should health insurance be any different? More consumers are searching online for​​​​​ your insurance products every year, so what’s stopping you from going digital?

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It’s About Time the Insurance Industry Catches Up

Over the years, technology has drastically changed the way consumers shop. Instead of visiting retail stores, consumers can now purchase whatever they need with just a few taps on their smartphones.

To back this up, the Internet of Things and digital marketing are converging to track consumer behavior, purchasing history, and location to boost sales and profitability. This means businesses can now take care of their customers the way they want to and, more importantly, the way customers expect them to. This is applicable to retail as well as to many other types of purchases, like insurance.

For the longest time, the insurance industry fell behind the times. The industry wasn’t incorporating technology into operations as quickly as other industries were doing, if at all. Adding to that, many insurance companies just weren’t interested in the implementation of online search tools.  But the times are changing, and insurance marketing companies are slowly gaining momentum in the digital age.

Today’s Consumer Behavior Points to the Internet of Things

Consumers engage in thorough discussions with insurance agents regarding the type of insurance they plan to purchase. Keep in mind, however, that these consumers do not make purchases without doing at least a little bit of research. Many people start their search for health, life, and long-term care insurance online. The industry, then, has no choice but to adapt to this trend in consumer behavior.

To be visible in the long run, insurance companies and agents must readily answer the questions that consumers ask. They must provide adequate online information about consumers’ general concerns. They must also readily answer the questions that potential customers have about specific policies. This way, insurance agents give consumers the ability to make informed purchasing decisions right at their fingertips.

On the other hand, consumers might feel overwhelmed at the amount of content that pops up online in an effort to inform them about the type of insurance they should consider. From myth listicles to online guides, too much information might put consumers off. As a result, people who have every intention of researching and purchasing from you might ultimately feel discouraged to do so.


 

Pro Tip: To prevent potential customers from feeling discouraged.


As an agent, understand that your prospects will research online before settling for any insurance policy you offer them. Just because they can readily find information online, however, doesn't mean that you should depend on the blogs circulating there.


Be prepared to dispel insurance myths and lead your potential customer in the right direction. Establish your confidence and expertise from the get-go.

Step 1: Research Is the Key to Success for Both Insurance Agents and Consumers

Connecture, a health involvement software company, conducted a study from 2012 to 2017 of more than 8000 American adults who get health insurance on their own, through their employer, or through Medicare. The study encompassed the period when the Affordable Care Act went into effect.

Comparing the number of people who began the online search for insurance throughout the study, the company discovered a notable increase from 14 percent in 2012 to 42 percent in 2017. In other words, online shopping for health insurance increased by more than three times in a five-year period.

On a related note, the study showed a fourfold increase in Americans leveraging online tools when shopping for employer-sponsored health coverage. From 9.5 percent in 2012 to 38 percent in 2017, noticeably more Americans are taking advantage of the convenience of online insurance purchasing.

The study also showed the number of American consumers who prefer self-service options when purchasing health insurance. About 56 percent of consumers in 2017 were comfortable enough shopping for insurance with little to no assistance — a stark difference from 37 percent in 2012.

This is noteworthy for insurance agents who aim to form personal relationships with customers.

Similar to the way consumers research insurance policies before they purchase, you also have to do your homework. Conduct research — or track trends — about where your potential customers are spending their time online and how much time they spend online. Then, develop a strategy based on that.

To have a better grasp of your consumers and what they are looking for, pay attention to the following:

  • Websites and online offers of competitors, to know what you’re up against.
  • Purchase behavior and satisfaction of consumers, to know how you can improve.
  • Time spent researching by people purchasing insurance, to determine the best approach.

Based on the study conducted by Connecture, consumers are still rushing their insurance purchasing decisions. In fact, 59 percent of participants with employer-sponsored insurance spend one hour at most to research and choose their health plan. This may be because of lack of time, attention, or both.

Either way, given a short timeframe to convince customers, insurance agents must provide reliable online information that is easy to find and digest. Moreover, agents must make sure that this information is available on the online platforms that their target consumers most often use.

As such, do your research well and determine what appeals to your target market.

Step 2: Be Present Where Your Potential Customers Are

To insurance agents, a solid one-on-one connection with customers is important. This is why traditional agents are diligent in making phone calls and visiting customers whenever possible. Today’s consumers may not always have time for this, though, so insurance agents must adjust to their pace and platforms.

After researching your target market and their interests, come up with a strategy to connect with people who plan to purchase insurance. Strategies ultimately depend on each agent and their target market. But online search tools are undoubtedly the best way to connect with consumers who spend increasingly more time purchasing what they need online.

Here are some different ways you can reach out to consumers:

  • 1
    Optimize your website. When researching online, consumers pay more attention to what shows up on top of search engine results. To them, those results are the most reliable. If you don’t have one yet, consider putting up a website. If you already do, make sure it is updated — this is the first step to ranking high on search results and being more visible to consumers. Make sure your website is informative and user-friendly. Visitors should easily access it from their desktop or via mobile.
  • 2
    Create a social media presence. Consumers may pull up their Google tab and search for their best insurance options. But this is not their only research platform. They also consider social media. Social media sites have already surpassed print newspapers as a news source. Although still ranked lower than television and news websites, the fact that more Americans get news via social media implies that they trust the content on these sites. Take advantage of this by opening social media accounts and interacting with your target market there.
  • 3
    Publish informative and high-quality content. It is not enough that you have an online presence. You need to build on it — the best way to do so is by publishing content that consumers will appreciate. Keep in mind that consumers have limited time to research insurance options. So, you have to be direct and engaging when it comes to the type of content you share with them. Whether you plan to publish blog posts or create videos, your content must have the information that consumers are looking for. And because insurance is a complex subject, you should present your content in a way the online community can easily understand.

You don’t need to choose just option among these strategies. In fact, the most effective way you can connect with consumers online is to combine the three. This way, you cover all your bases and are present on all platforms that your target market uses — or on the ones they prefer.

Step 3: Maintain a Strong Online Presence

Many Americans are searching online for the best insurance policies. These consumers may not completely understand what they pay for. In this case, they are willing to discuss and iron out details with their insurance agent. If you want to be their go-to insurance agent, make sure you have a strong and reliable online presence that your target market will encounter while researching.

These are the different ways you can make an online impact:

Be consistent across your online platforms.

The first step toward maintaining a strong online presence is actually being present where your consumers are. For example, if your research shows that the target market is heavy on social media, then interact with them on Facebook, Twitter, Instagram, or Pinterest.

More than a constant presence, however, you have to be consistent. Your branding has to match the tone of your social media posts, the layout of your website, and even the graphics that you put up on your platforms. This consistency makes you more trustworthy to consumers.

Produce content that contributes to informed decision-making.

Consistent engagement is not enough. If you want consumers to consider your insurance offers, you have to provide relevant content. For example, you can publish a written guide to the best insurance policies for specific concerns. You can also put up videos that compare different types of insurance so that potential customers can have a better grasp of what they will purchase.

Your content must contribute to informed decision-making. Consumers will look for distribution channels, prices, and policy offerings — be open with your target market about these things that determine their satisfaction and influence their purchasing decision.

Tailor your strategy based on the needs of your target customers.

The existence of online tools makes it easier for you to determine the interests of your target market. Also, the internet lets you gather the demographics of your consumers in a split second — just be sure the data is from reliable sources. This simplifies your strategy making process.

Take advantage of the internet and online tools when creating an online strategy that catches the attention of online consumers. The right tools let you narrow down your target market as well as create campaigns and produce content based on their interests.

The transition to the digital world might have been slower for the insurance industry than it was for other industries. This does not mean, however, that it will be difficult to catch up. Keep these tips in mind when establishing and maintaining your online presence — more customers will find you.

Key Takeaways In This Article

  • Consumers are increasingly receptive of online shopping. This is not limited to retail. More people are purchasing their health, life, and long-term care insurance online.
  • Customers go online when they research on the most suitable insurance policies for them. Many of them get in touch with an agent before purchasing, but some actually purchase their insurance online without speaking to an agent.
  • Current consumer behavior trends show the relevance of online research and purchasing. So, develop a digital strategy that connects with your potential clients through various platforms. Create high-quality content for your website and social media pages.
  • Although information is readily available online, customers still need you for clarification and reassurance before purchasing insurance. They still rely on in-person communication for informed decision making. So, always be visible and present. Keep your ears open for their concerns.

Over to You

We'd love to hear your opinion about the way customers purchase insurance today. Leave a comment below. Here are some thought provoking questions to get you started.

  1. How has digital insurance affected your business?
  2. Will Artificial Intelligence eventually replace insurance agents?
  3. What strategies are you using to secure your future with insurance?

If you have any concerns or clarifications, please leave a comment below. We will carefully read each one and provide comprehensive answers for you. Happy selling!

About the Author Matthew King

Matthew King is a co-owner of TR King Insurance Marketing and partner at Independent Life Insurance Agent Association. When he's not creating processes, content, and developing SEO strategies, he likes to immerse in gaming with his wife and friends.

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