Auto Insurers See Pickup In Policy Sales Over Web
Lavonne Kuykendall
May 23, 2007
Auto insurers have been investing for years in Web sites that allow customers to shop for and buy their insurance online, even as most drivers say they much prefer to do business with an agent, a recent survey found.
Even if doing business with an insurance agent adds as much as $150 to the annual cost of a policy, 85% of 1,001 adults surveyed by International Business Machines Corp.'s consulting business in March said they would stick with the agent. Just over half said that no amount of money would make them drop their agent in favor of doing business over the Internet.
"People will go to the Web for convenience, but if somebody has an accident, they want to pick up the phone" and talk to an agent they know, said Jamie Bisker, global leader for the insurance industry at IBM. "People tend to value the agent."
Mr. Bisker said he has been seeing the same results in the company's surveys for years, but a study by another research group suggests that consumers finally may be growing more open to buying auto insurance online.
Last year, the Internet finally began to take off as a place to buy insurance, according to Internet researcher comScore Inc. In an April report, it said that in past years, consumers tended to shop online for insurance pricing, but few made the buy online, instead turning to an agent or toll-free number to make the purchase. But that is beginning to change.
In 2006, the number of auto policies purchased online rose 58%, the report said, although it did not give the actual number of policies bought. Its research indicated that 65% of Internet users with auto insurance said they would consider purchasing their next auto insurance policy online. Of those who said they wouldn't consider an online purchase, 69% said the reason was that they would prefer to deal with an agent, comScore said.
In an interview last week, Allstate Corp. President and Chief Executive Thomas Wilson said the Northbrook, Ill., insurer, the second largest in the U.S., is revamping its Web site in order to make customers feel more comfortable making the purchase online.
So far, Allstate's Web site has attracted shoppers, but "has not been as good at closing the sale as we would like," Mr. Wilson said.
One reason may be that drivers have extremely positive relationships with their agents. Asked to say what they like least about their agent, 63% of those surveyed by IBM said either they didn't know or couldn't think of anything they didn't like. The biggest peeve for customers was the thought of paying higher rates, which 15% named as the quality they liked least about dealing with their agent.
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