Spreading Its Influence

After marketing and selling their products in a certain way for decades, it's easy to understand what a jolt the Internet gave to insurance sales and marketing. As the industry has gotten more comfortable with the capabilities and realities of it all, carriers need to refine their approach for today and the future.

Insurers have to offer what research and consulting firm Celent calls a hybrid approach to their Web presence, according to Matt Josefowicz, who directs Celent's insurance practice. Carriers can reach online customers through a variety of ways: via the carrier Web site, search engines, or a comparative rating or lead-generation site that describes a carrier's products. "There is no one way to attract and retain online shoppers," he says.

There has been too much focus in the past on the 100 percent online shopper, Josefowicz asserts, since those customers are fairly few. He estimates only one in 10 shoppers conducts all personal auto business on the Web, and the number is even smaller for other lines. Web-initiated and Web-influenced sales, though, are significant pieces of the market. "The people who eventually call a call center or an agent typically have started the process online," says Josefowicz.

With that in mind, Josefowicz recommends insurers need to look at their consumer Web sites as a marketing tool as opposed to a transactional platform. "A marketing tool means providing a rich level of information such as online quoting, product design, needs analysis, and that kind of functionality," he says.

A carrier's Internet presence enhances the independent agent, Josefowicz contends, since few consumers rely completely on the Web to purchase a policy. "The closest analogy for buying insurance online is buying a car online," he says. "It's not the kind of thing you do all the time."

Consumers do their research online and typically go to a car dealership with a printout from a Web site. "They have done their first round of shopping online without engaging the direct sales channel," says Josefowicz.

The Internet has created a shift in the way consumers shop for insurance. "In the old days, the only way for people to get product or pricing information was to talk to an agent and begin the sales process," notes Josefowicz. "Now, people can do that on their own with a certain level of anonymity."

Online aggregators also play a role in drawing leads for a carrier and sending them along through the agent channel, suggests Josefowicz, who recommends carriers explore relationships with aggregators. "They are fairly low cost in terms of generating leads," he points out. Aggregators are no longer the province of midtier insurers. "Larger insurance companies are active in it," he adds. "Some of the biggest personal auto insurers are gathering leads from NetQuote."

At one time, midtier insurers could claim an advantage over top-tier companies through their Web presence, but Josefowicz believes those days are over. "Smaller companies were more aggressive in terms of establishing their Web presence and building rich functionality and were able to gather more of that traffic with the online shopper," he says. "But what we see now, if you look at search engine results or advertising spending for personal auto, [is that] it is primarily the large national brands that are aggregating that traffic. The regional players have to be very clever in terms of what type of search engine traffic they can bid for. There are niche sites that are more likely to correlate to their target market. In a way, the Internet has caught up with the rest of media, which is a way of saying the people who can spend the most money have a bigger advantage."

Penetration of Internet usage is no longer defined by any socio-economic group, according to Josefowicz. "Anything after the World War II generation, you have a pretty high penetration of Internet use," he says. "Anyone who thinks the Internet is a phenomenon for the educated, the upper class, or young people needs to go to any urban high school and count the number of kids who have Sidekicks. The idea of 10 years ago that this was a distinct segment of the population is not true."