What does the short-term future look like for personal auto insurance in the U.S.? Novarica principal Chad Hersh has authored a study on the market and believes challenges lie ahead for carriers, particularly the ones he refers to as "laggards." Those would be carriers new to direct writing, the Web, or online self-service. "It's an almost impossible situation for them to succeed if they haven't, for example, developed the ability to quote online," he says.

Some carriers have held off on changes because they are agent based and don't want to antagonize their partners. But even the independent-agent-based carriers need to realize the importance of providing potential customers an online quote and turning that request into a lead for an agent, explains Hersh. "If you are not that far, you are pretty far behind," he says.

Carriers that are agent based typically feel customers need to speak to an agent if the consumer expects to get the proper coverage, but Hersh doesn't believe that's an issue today. "In reality, most people are perfectly happy to buy a policy that has their existing coverage limits in it," he says. "The agent-based carriers can say until they are blue in the face that you have to talk to an agent, but the reality is Progressive seems to be doing just fine in gaining market share, as are all the direct writers."