Insurers Move Hesitantly Towards Online Quote Engines

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In the latest Customer Respect study of life insurer websites (Customer Respect Q2 2010 Life Insurance Benchmark), it is clear that insurers are struggling with the conflict between distribution strategies and online functionality. As with most industries, customers are looking to research products and services online and are looking beyond brochureware content traditionally served. With online travel, banking and shopping commonplace, consumers have grown accustomed to comparison-shopping. The growth in insurance aggregators responding to paid search terms such as ‘life insurance quote’ confirms this trend. Insurers, however, have traditionally sold through agent consultation and self-serve online tools and calculators viewed by some as contradictory to this process.

Not all consumers are the same and while many continue to consult and buy from the agent, the number who demand self-service is growing. Insurers must provide a multi-channel distribution model to maintain the range of customers that they already enjoy. This does not imply selling insurance online, even though we are starting to see that trend for term life. It does indicate a need to help the consumer price out their options prior to consultation.
The most popular online tool, supported by two-thirds of the major insurers, is to help calculate the amount of term life insurance a consumer should have. The quality of these tools varies with many sites using mediocre third party applications. This type of tool does not influence the distribution model too much, hence its popularity and besides, many such calculators exist on personal finance sites.

Helping the consumer choose between term and whole life is much less popular as it directly addresses the type of question a consumer would ask an agent. These tools are generally custom developed and quality is higher. MetLife, New York Life, Western & Southern Life and ING offer the best tools in this category.

As for price estimates, these are becoming more popular, especially for term life. About half of the major insurers now have at least a simple tool. A few allow the quote to be continued into an application, a few others will transmit the quote to an agent for completion but the majority provide a simple quote based upon a few questions and leave it to the consumer to take the next step. The trend is for better quality calculators and MetLife, ING, TIAA-CREF, Prudential, Western & Southern now all provide options.

According to Comscore, aggregators provide 78% of online life insurance quotes. To counter this, insurers need to address this demand head-on while maintaining their distribution channel integrity. Expect to see a transition for greater online self-service websites coupled with greater sophistication in handling a multi-channel process.

Republished with author's permission from original post.

Terry Golesworthy
As the president of The Customer Respect Group for 7 years, I focus on the online experience of consumers. Online experience has always been bigger than the company website, from the response to email to integration to other offline channels. It has now grown to include social media.

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