It’s no secret that aspects of the current insurance system are at best antiquated, at worst broken. While a large percentage of insurance consumers still buy from a local agent, many are now considering alternative, direct ways to buy insurance.
If you take a quick scan across the web you’ll discover several dozen insurance quoting solutions aimed at connecting consumers to the right insurance company. It makes sense. We are familiar with comparing product options at other retail sites, so why not have the same experience when shopping for insurance?
We all want a hassle-free, reliable insurance experience, at a good price. But does that mean we should stick with the traditional approach of using a local agent, or trust a new online alternative, such as insurance reviews?
Buying insurance through a local agent
A recent Clearsurance survey of more than 700 insurance consumers across the country showed that many still want to buy insurance locally, through an agent.
The reason why is simple. Consumers still buy based on the recommendations of people within their network — family, friends, trusted co-workers and “Ned” — the insurance agent you see every week at your kids’ game.
People trust their agent. Forrester Research reported US online adults have purchasing relationships with their insurance agencies when buying auto (10.1 years), home (10.4 years), and life (13.9 years) insurance. To put that in perspective, that’s longer than the average American marriage that ends in divorce, which Forrester notes is eight years.
Does this mean innovation won’t change this trusted relationship between consumers and local agents? Sixty-five percent of surveyed Clearsurance respondents believe that buying insurance online will be the most common way, and will most likely happen within the next five years. In fact, how we find and buy our insurance is already changing, which opens up more options for us to research, compare and decide on our own best fit.
The challenges of choosing an insurance company
Consumers are open to buying insurance online –nearly 50 % percent of surveyed Clearsurance respondents say they would purchase an insurance policy online. Whether using a local agent, or a new online service, consumers want insurers to have an open and unbiased approach, with no hidden fees or confusing fine print. Say what you mean, and deliver what you promise.
Just as there’s no such thing as a truly independent agent, since they’re compensated by commissions and supplemental pay, there’s no certainty that price alone leads to the right insurance recommendations for consumers.
While price uncertainty remains a major challenge when purchasing insurance, our ability to trust our insurer to pay a claim properly is also critical. Consumers want a truly unbiased analysis of how insurers compare to one another on service and other factors, to help us narrow down all the options to our one well-matched choice.
The importance of the customer experience and insurance reviews
Insurers must deliver great customer experiences. By managing their reputation based on crowdsourced reviews and ratings they have another avenue to do so. Online reviews make a difference in consumers’ buying behavior for a wide range of goods and services, and many report trusting them as much as personal recommendations.
I recently heard an agent say insurance company reviews may be more important than an A.M. Best rating — that speaks volumes to the importance of the consumer experience.
One thing is certain: whether consumers choose a local agent or online insurer, with crowdsourced reviews, we are more empowered than ever to research, compare and select our own best insurance fit.
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