More Auto Insurance Buyers Willing to Abandon Agents

An agents' group representative said the results should serve as a "wake-up call" to agents, who should be planning ahead with new market strategies.

The report said an increasing number of adults between the ages of 35 and 49 are willing to make a purchase without an agent. The number grew from 30 percent surveyed in 2003 to 45 percent in this survey.

The survey of 2,000 consumers was done by telephone during the last few months of 2006 and has a differential rate of plus or minus 3 percent. The survey was part of a more comprehensive consumer behavior survey examining a wide range of industry segments.

Jim Litwin, vice president of market insights for Vertis, noted in a statement that the survey shows a younger generation is more willing to access information through various media, and the insurance industry has turned to new methods to reach them.

However, he noted that effective selling requires multiple avenues of contact to be effective.

The survey found that, when asked what is the most important service a company can provide, respondents noted a knowledgeable agent as their number-one choice.

The importance of an agent increased from 25 percent of those surveyed in 2003 to 27 percent of those asked in the current survey.

The second most important service was 24-hour, seven-day-a-week access. Twenty-two percent of respondents said this was most important to them, up 2 percent from 2003.

For those between the ages of 18 and 24, round-the-clock access was most important to 29 percent of those surveyed (up 6 percentage points from 2003), while a knowledgeable agent fell to second place at 22 percent of those surveyed (down 4 percentage points from 2003).

Prompt claim payment came in third at 19 percent among all adults.

Online accessibility was near the bottom at 5 percent for all adults. But the survey noted that for those adults between the ages of 25 and 34, its importance grew 7 percentage points to 9 percent, while for the 18-24 age group, the percentage increase one percentage point to 7 percent.

In marketing, the survey found that when it comes to direct mailings, men between the ages of 50 and 64 and young men ages 18-24 are more likely to read the literature–23 percent and 22 percent respectively. Among women ages 35-64, 15 percent would read direct mail. Least likely to read direct mail were men ages 25-34 and women 65 and older.

Reviewing additional survey results, Scott Marden, director of marketing for Vertis, said while direct auto marketing material was the third most read, behind health and life products, people were more willing to purchase an auto policy from that material than the others.

He also noted that one of the trends the survey shows is that older individuals are less willing to purchase auto insurance without an agent than younger people.

"It's all about targeting your customer and how well you do it," he said. "Baby boomers are a key target for agents. Our survey shows that half the country is willing to buy without an agent, but the other half is not. That's plenty of people [for agents] to target."

Madelyn Flannagan, vice president with the Alexandria, Va.-based Independent Insurance Agents & Brokers of America, said the survey does not come as a surprise. She said independent agents need to understand these changes that are taking place, and companies are pushing them in that direction.

While there remains plenty of market from older customers and those with complex risks, she advised agents that they need to plan ahead.

"Research like this should begin to give agents a wake-up call that people are looking for information and service online. Independent agents need to start thinking now about those changes and responding to those future customers," she said. "And I hope they will look to their associations for that help."