Filed Under:Agent Broker, Agency Management

Personal-Lines Insurers Can Thrive in a Multichannel World

Auto and home insurers might have a tough road ahead of them when it comes to expanding market share organically, but there are growth strategies they could pursue to capitalize on the evolving needs of today’s increasingly tech-savvy personal-lines consumers.

The challenges facing carriers and how to overcome them have been discussed here in a series of blogs over the past few months, based on the results of a pair of Deloitte Research surveys of 1,080 auto consumers and a separate group of 1,080 homeowners’ policyholders, summarized in a report on “The Voice of the Personal Lines Insurance Consumer: Buyers in the Driver’s Seat.”

The good news for those carriers worried about retaining business they already have is that the two groups surveyed expressed high levels of satisfaction with both the price they pay for insurance and the services they receive, regardless of whether they buy coverage through an agent or directly from a carrier.

The bad news for those looking to grow by taking business away from competitors is that such high satisfaction levels means it won’t be easy to pry these prospects loose and convince them to buy from a different source.

But the surveys did find that a significant percentage of respondents are open not only to changing carriers but to changing channels as well—if the price and benefits were perceived to be worth the switch.

Perhaps the most marketable finding from these surveys is that carriers would be wise to redouble their efforts to capture the business and maintain the loyalty of younger drivers and homeowners, as the results suggest that inertia sets in as a policyholder ages; they become less likely to shop their business aggressively at renewal or to change carriers.

The same goes for those working with agents—the longer respondents remain with their agents, the less likely they are to change intermediaries or to buy direct. Targeting those in their late 30s, 40s, 50s and beyond might be tough sledding. The surveys indicate that insurers will likely find much more open-minded prospects among the under-35 crowd when it comes to changing carriers and distributors.

In contrast, those depending too heavily on a single channel either for distribution or service also could find themselves vulnerable, as consumers increasingly seek multiple touchpoint options to interact with their personal-lines insurers.

And while carriers scramble to find a viable business model during this bleeding-edge phase of developing online (and particularly mobile application) capabilities, they should keep in mind that younger respondents tend to be more demanding when it comes to getting their services wherever they are, at any time of the day or night, over whichever device they choose.

Some policyholders might not yet fully appreciate the value of such multichannel options, and perhaps some won’t in the future. But for the majority of individuals, no matter what their age, the Web has been fully integrated into their daily routines, as they spend more of their personal and professional lives online. Most are open to the idea of doing some of their shopping for products and services and concluding transactions over the Internet. Demand for more insurance information, sales and service options online are sure to follow.

A growing number of consumers today already expect 24/7 service delivered over their computer, laptop, tablet or smartphone via websites, mobile applications and social media. Demand for multichannel access is only likely to increase as today’s tech-immersed teenagers enter the workforce and start insuring their cars and homes.

However, those carriers looking to substitute tech for the human touch by disintermediating their agents and selling personal lines directly to policyholders might be in for a rude awakening, at least in the short term, as a large segment surveyed expressed a very high degree of satisfaction with, and loyalty to, their current intermediaries. In addition, a significant segment who now buy direct indicated strong interest in using an agent the next time they purchase a new policy.

But at the same time, a number of those using agents appear poised to switch to direct channels. These trends may bode well for those offering a direct-purchase option to complement their exclusive or independent agency force.

Offering more options, not fewer, for shopping, transactions and service would appear to be a key attribute for any leading personal-lines carrier going forward—no matter how their customers choose to buy a policy.

What strategies might a carrier pursue to fortify retention and bolster organic growth in this environment? In part, it depends on how an insurer goes about distributing its products and services.

• Direct-only organizations can enhance brand awareness and credibility on social-media platforms; strengthen their ability to provide advice for customers who need it; and also build loyalty by offering more products, a more-satisfying customer experience and value-added services.

• Agent-only carriers can focus on maintaining their retention of existing customers; target direct consumers who want more advice as their coverage needs become more complex; and consider offering telematics-based products to price-sensitive customers.

• Multichannel insurers could develop a differentiated sales and service experience across platforms; strengthen their pricing sophistication; and tailor their product portfolio to appeal to target segments.

Bottom line, no matter how they do business today, those insurers that respond most proactively and effectively to the mounting demands and rising expectations of today’s increasingly high-tech, mobile consumers would be positioned not just to survive but to prosper in the competitive, multichannel market that’s emerging—not in the distant future, but even as we speak.

(You may download the full report on “The Voice of the Personal Lines Insurance Consumer: Buyers in the Driver’s Seat” from Deloitte Research at

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