Consumers Favor Agents Over Web For Insurance Buys, Poll Says

NU Online News Service, May 19, 3:36 p.m. EDT

Three-quarters of U.S. consumers prefer buying insurance products through agents and other trusted sources, but younger and higher-income consumers are more inclined to buy products via the Web, a survey has found.

Accenture, the global consulting firm in Chicago which took the poll of more than 1,000 U.S. consumers, said younger and high-income buyers are also more inclined to switch insurers.

An executive with the firm said insurers are failing to utilize the Web to gain new customers.

Overall key findings include: 73 percent said they prefer to buy auto and home insurance products from an agent, and 75 percent prefer to buy life products from an agent or another trusted source, such as an employer or financial advisor.

Younger and more affluent customers were found more inclined to purchase products via the Web versus purchasing products through an agent. The survey showed that 39 percent of consumers aged 18 to 24 and 28 percent of consumers in the higher-income bracket with incomes above $60,000 said they would prefer to buy insurance products online versus with an agent.

Even more youthful customers were inclined to purchase auto and home products online; 43 percent of consumers aged 18 to 24 and 39 percent of consumers aged 25 to 34 said they are more likely to buy auto and home products online.

Sixty-eight percent of auto and home consumers said they do not have sufficient income to pay the bill, and 53 percent said they feel they are paying too much for their policies.

One in six respondents is "in play," meaning they are considering purchasing an auto or home insurance policy with a new insurer over the next twelve months--with cost savings as the primary goal for 46 percent, Accenture found.

The company said consumers aged 18 to 24 (29 percent) and 25 to 34 (27 percent) were more likely to switch insurers when compared with elder groups. Additionally, consumers with incomes above $60,000 (22 percent) were more likely to switch compared with consumers who had incomes below $60,000 (13 percent).

Consumer confidence in auto and home insurance carriers was found to vary by age, with younger consumers questioning their insurance companies' ability to provide sufficient coverage for them during the current economic times.

Of individuals aged 18 to 24, 43 percent either had some concerns or didn't have confidence in their carriers' ability to provide coverage, compared with just one quarter of those (26 percent) in the 45-plus age groups.

Michael Costonis, director of Accenture's insurance practice in North America, said, "Product complexity and customer service appear to be a driving force behind consumers' preference for agents and their resistance to new insurance purchases."

He noted, "The promise of the Internet is strong, yet insurers have lagged behind other industries in harnessing it to improve customer acquisition and retention. Insurers have an opportunity to attract younger and higher-income consumers to more straightforward products via the Web. Distribution needs to match customers' needs, and insurers need to take a targeted approach for younger and higher-income consumers."