Clearsurance recently conducted consumer research to understand how online car insurance distributors are impacting consumer shopping experiences. (iStock)

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

Clearsurance recently conducted consumer research to understand how online distributors for car insurance are impacting consumer shopping experiences. We wanted to understand if consumers were pleased with their experience, if they found these sites easy to use, and if they had any concerns about how their personal information may be used. With these objectives in mind, we gathered feedback from nearly 800 consumers on their experiences with the top aggregator/quote comparison websites.

Here, we share insights from this research that may enable insurance companies and agents to better understand how online insurance distributors are disrupting the market, impacting the customer shopping experience, and altering customer retention strategies.

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

Eighty percent of participants rated their overall experience with these companies as being positive (providing a very good or excellent rating). Consumers talked about how easy the online forms were 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 the convenience factor these companies provide? How can they improve the buying process by making it easier and by providing different coverage and price options?

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

We asked participants about the level of communications they received after providing their personal information to obtain insurance quotes, and it was clear from their responses that consumers are willing to deal with multiple emails and telephone calls, although their tolerance for emails was higher than for telephone calls. The tipping point for when the level of contact began to frustrate them was at 4-5 calls, and 7-8 emails.

For carriers and agents

How many times do insurance company representatives or agents reach out to potential policyholders during the application process to gather additional information and to establish a relationship? Is it possible more contact could result in a better customer experience particularly if that contact results in them providing more options?

No. 3: Try as they might, oftentimes consumers discovered they couldn't get a better deal even after completing the online applications.

Although consumers believed they would save money when they began the process of shopping through an online distributor, many found they would not. While the overall experience using these sites was positive, fewer than half of participants actually purchased a new auto insurance policy from a company that provided a quote. The primary reason given for not purchasing was the price they were offered wasn't low enough to motivate them to switch. This result tells us that consumers using these platforms are simply 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 agents be more proactive in explaining rate increases or testing the market before consumers do so?

No. 4: Consumers are willing to provide personal data, and are comfortable with how it may be used.

More than 60% of participants stated they were extremely or very clear on what happened to their personal data once they provided it to an online distributor. However, some of these same individuals admitted they didn't recall reading anything regarding data use and privacy on the websites.

For carriers and agents

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

Parting thoughts

According to our research, consumers find online distributors to be a very helpful tool to receiving a variety of quotes. There are many potential kinds of shoppers who use these methods, from the curious shopper, to someone who just wants to see if they can get a lower price, to the serious shopper who is definitely going to switch their car insurance company.

The challenge for insurance carriers and agents alike is to understand why consumers choose this method of shopping and how they are enhancing the shopping (and buying) process. Car insurance price comparison websites have found a niche and are meeting consumers' desires to shop (and buy) online. We believe these websites — in all their forms — are here to stay. Time will tell how insurance companies and agents will engage and/or compete with online 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 our website.

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

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