The economic downturn hasn't taken the pressure off insurers to find ways to build closer, more profitable relationships with their field forces. There were a number of offerings at this week's ACORD LOMA Insurance Systems Forum focused on agent portal capabilities, channel analysis, enhancing mobility, and in general automating and speeding agent/carrier interactions.
And the competition to retain the best, most productive agents won't get any easier, according to new research released by Accenture at the conference. Three-quarters of U.S. consumers prefer buying insurance products through agents and other trusted sources, but younger and higher-income consumers are more inclined to purchase products via the Web -- and also are more willing to switch carriers, reveals the new study.
Seventy-three percent of the more than 1,000 U.S. consumers Accenture surveyed said they prefer to buy auto and home insurance products from an agent, and 75 percent said they prefer to buy life products from an agent or other trusted source (e.g., employer or financial adviser). But 39 percent of consumers aged 18 to 24 and 28 percent of consumers with incomes above $60,000 said they would prefer to buy insurance products online versus with an agent. The trend is even more pronounced when it comes to buying auto and home products online: Forty-three percent of consumers aged 18 to 24 and 39 percent of consumers aged 25 to 34 said they are more likely to buy these products online.
Another red flag (or opportunity) for insurers revealed by Accenture's research is that 25 percent of the respondents said they do not feel they have adequate information about the impact the economy will have on their life policies, and the same number said they are interested in receiving more information about their life insurance. Meanwhile 17 percent of respondents said they are "in play," meaning they are considering purchasing an auto or home insurance policy with a new insurer over the next 12 months with the primary goal of cost savings (46 percent). According to Accenture, 29 percent of consumers aged 18 to 24 and 27 percent of consumers aged 25 to 34 were more likely to switch when compared with older demographic segments. Additionally, 22 percent of consumers with incomes above $60,000 were more likely to switch compared with 13 percent of consumers who had incomes below $60,000.
"Younger consumers were more skeptical about [insurance] companies, and more willing to buy online," noted Michael Costonis, director of Accenture's insurance practice in North America. This isn't just a branding matter, but also has a strong "cost and service element," he said. When it comes to the evident lack of loyalty in the P&C business, Costonis added, "We were surprised at the number of consumers in play."
On the live side, noted Pierre-Louis Seguin, managing director of Accenture's life insurance practice in North America, these trends are not about "the demise of the agent." Rather, he said, the issues for life insurers involve transparency (lack of) and product complexity. In fact, he pointed out, there is typically "no interest in the agent to simplify" products and what goes into selling and supporting them.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio