Some 93 percent of people 25 years and younger are willing to buy insurance online compared to only 63 percent of people 26 and older, according to a new Celent report called “The Online Consumer: Reading the Insurance Customer’s Mind.”
“Insurance consumers are influenced by what they see and experience in other channels like Amazon, Netflix and Uber,” said Luis Chipana, an analyst with Celent’s insurance practice in Bowling Green, Ohio.
As a result, insurers have started to open new channels and are improving existing online channels.
“The way these companies operate has made consumers expect the same experience from other industries,” Chipana said. “They want reviews, suggestions and ease of buying by click.”
About 33 percent buy insurance on social media and one way to increase the chances of a sale is to offer the ability to personalize a policy online.
“Allow for customization of productions so that clients don’t have to buy the whole package of insurance,” Chipana said. “Also lower the limit available and type of coverage, starting from a basic plan.”
A trend among insurers trying to improve online sales is to separate the digital channel from the overall company’s website. For example, CUNA Mutual Group created trustage.com.
“Insurance companies keeping their original channels are improving their distribution channels, including client and agent portals, to provide the clients and prospects with a different customer experience, such as one that you may see when buying from Amazon.com, for example,” said Chipana.
Technology is influencing both supply and demand but 71 percent of online shoppers still prefer to communicate by phone or in person and only 29 percent by website or social media chat.
Although only 26 percent of consumers will buy insurance online and typically already have a policy in their name, insurers can use the eyeballs to collect information.
“Younger generations like millennials are more inclined to buy insurance online as long as they get discounts and have a clear idea of what they are being offered,” Chipana said.
Specifically, 32 percent say they are willing to share their information with insurers but only if they are compensated in some way and 65 percent are willing to receive notifications for driving behavior. About 21 percent would be willing to share data if a future discount is applied and 35 percent would receive an offer on social media.
“If insurers offer a lower premium or discount of some kind as compensation for data sharing,” said Chipana, “online customers are more likely to share their information from social media, smart phones and wearables.”
Juliette Fairley is a business and finance journalist who has written four personal finance books and has written for major news organizations. Juliette can be reached at [email protected]
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