Clearsurance recently conductedconsumer research to understand how online car insurancedistributors are impacting consumer shopping experiences.(iStock)

The number of online distributors for personal lines insurance products has grownrapidly over the past several years. These websites are known toinsurance industry experts as aggregators, quote comparisons sites,and lead generators. They serve as an alternative for consumers whowork with traditional insurance agents, or visit multiple carriers'websites one at a time to receive car insurance quotes. Consumersfind these companies by searching online, and the leading amongthem attract nearly 800,000 visitors from search engines eachmonth. This is a primary reason why many insurance companies chooseto engage with them.

Clearsurance recently conducted consumer research to understandhow online distributors for car insurance areimpacting consumer shopping experiences. We wanted tounderstand if consumers were pleased with their experience, if theyfound these sites easy to use, and if they had any concerns abouthow their personal information may be used. With these objectivesin mind, we gathered feedback from nearly 800 consumers on theirexperiences with the top aggregator/quote comparison websites.

Here, we share insights from this research that may enableinsurance companies and agents to better understand how onlineinsurance distributors are disrupting the market, impacting thecustomer shopping experience, and altering customer retentionstrategies.

No. 1: Consumers are used to doing their shoppingonline; getting comparative car insurance quotes is time consuming.Online distributors are a convenient way for consumers toshop.

Eighty percent of participants rated their overall experiencewith these companies as being positive (providing a very good orexcellent rating). Consumers talked about how easy the online formswere to complete, the fact that multiple options were offered,and how little time it took to receive quotes.

For carriers and agents

How can insurance companies and agents compete with theconvenience factor these companies provide? How can they improvethe buying process by making it easier and by providing differentcoverage and price options?

No. 2: Consumers don't mind being contacted, evenmultiple times, after initiating the online quoting process becausethey believed they would save money in the end.

We asked participants about the level of communications theyreceived after providing their personal information to obtaininsurance quotes, and it was clear from their responses thatconsumers are willing to deal with multiple emails and telephonecalls, although their tolerance for emails was higher than fortelephone calls. The tipping point for when the level of contactbegan to frustrate them was at 4-5 calls, and 7-8 emails.

For carriers and agents

How many times do insurance company representatives or agentsreach out to potential policyholders during the applicationprocess to gather additional information and to establish arelationship? Is it possible more contact could result in a bettercustomer experience particularly if that contact results in themproviding more options?

No. 3: Try as they might, oftentimes consumersdiscovered they couldn't get a better deal even after completingthe online applications.

Although consumers believed they would save money when theybegan the process of shopping through an online distributor, manyfound they would not. While the overall experience using thesesites was positive, fewer than half of participants actuallypurchased a new auto insurance policy from a company that provideda quote. The primary reason given for not purchasing was the pricethey were offered wasn't low enough to motivate them to switch.This result tells us that consumers using these platforms aresimply looking for a better deal.

For carriers and agents

How do insurers differentiate themselves other than on price?Knowing the appeal of online distributors, can insurers and agentsbe more proactive in explaining rate increases or testing themarket before consumers do so?

No. 4: Consumers are willing to providepersonal data, and are comfortable with how it may beused.

More than 60% of participants stated they were extremely or veryclear on what happened to their personal data once they provided itto an online distributor. However, some of these same individualsadmitted they didn't recall reading anything regarding data use andprivacy on the websites.

For carriers and agents

If insurance companies collected more data from consumers, wouldit change their ability to charge lower rates? What alternativedata sources are being utilized by online distributors thatinsurance companies are not leveraging today?

Parting thoughts

According to our research, consumers find online distributors to be a veryhelpful tool to receiving a variety of quotes. There are manypotential kinds of shoppers who use these methods, from the curiousshopper, to someone who just wants to see if they can get a lowerprice, to the serious shopper who is definitely going to switchtheir car insurance company.

The challenge for insurance carriers and agents alike is tounderstand why consumers choose this method of shopping and howthey are enhancing the shopping (and buying) process. Car insuranceprice comparison websites have found a niche and are meetingconsumers' desires to shop (and buy) online. We believe thesewebsites — in all their forms — are here to stay. Time will tellhow insurance companies and agents will engage and/or compete withonline distributors.

To read our complete survey findings, visit us here. You can also check out these companies'profiles, along with ratings and reviews from consumers on ourwebsite.

Marcy Updike is vice president of Consumer Insights &Analytics for Clearsurance.

See also:

10 trends impacting the insuranceindustry

5 most expensive moves for car insurancerates

20 most helpful state insurancewebsites