One thread that has had some legs so far in 2015 centers around the oft-discussed premise that insurance agents are in danger of going the way of the travel agent.
While auto insurance is furthest along in terms of consumers searching for quotes and buying direct online, some people think other lines of insurance are susceptible to carriers targeting consumers directly and cutting independent agents out of the loop. As consumers become ever more accustomed to purchasing more of the goods and services they need online, no doubt there are those who will prefer to search for and buy not only P&C lines but also health insurance and term life insurance. Others believe there will always be a spot for an independent agent that brings value in the form of personalized service that can’t be matched in a purely electronic transaction.
The original post in the thread, titled (which the O.P. readily admits is overly dramatic for the sake of drawing attention) “The End of the Insurance Agent,” claims consumers will demand more availability for web-based sales, and says most agencies will be too small to really compete with a direct approach from large carriers who are actively trying to perfect a direct model.
Certainly this subject – which constantly shuffles from back burner to front and back – moved forward recently when Google unveiled its online auto insurance comparison platform in California. That development isn’t lost on the responses in this thread. But the majority of the posts provide a wide variety of viewpoints on why the days of the agent are – as one commenter says – far from numbered. While the thread contains many more, here are 14 of the more pointed comments Forum members have added to the discussion so far:
• “The average person isn’t proactive when it comes to insurance. It’s why the mandate was added to the Health Insurance law. If you’re not required to get insurance, most people won’t think about it… We still need to educate people on the need for insurance and help them through a process that is often more difficult than an online quote. Find the people that you can encourage and educate, and you will do fine. Otherwise, feel free to leave insurance and the rest of us will pick up the slack.”
• “Yep… and legalzoom is putting all the attorneys out of business too. Self-help is still no-help and no professional advice.”
• “…a lot of the insurance being sold offline (with the help of a telephone) is being done by agents. The insurance companies have a really hard time getting leads that they don’t pay Google for and those leads are expensive. I laid my eyes on an internal document of a subsidiary of a big life insurer and they were paying more money per policy from direct marketing than by paying agents commissions.”
• “…I really feel that Carriers need agents – I don’t see them wanting to distribute their products directly, its not how they are structured. They are probably a lot more profitable not dealing with the crap on a consumer level. They like dealing with business in bulk – its a lot more manageable. The carriers will always try to have a space for the agent so they don’t have to deal with it.”
• “The thing about selling direct, biggest wins. That is great if you are State Farm, Allstate, Metlife, Blue Cross, etc. If you aren’t, and your marketing budget isn’t as big, you are going to have to fight for every dollar of premium. Also for P&C carriers that have historically depended on agents for field underwriting, that is another expense they take on or risk being subject to a higher loss ratio than they their tolerance allows. Agents shouldn’t ignore the internet and all it brings, but the days of the agent are far from numbered.”
• “Planning a vacation is fun for many, so people did not mind spending hours online looking at destinations, reading reviews, etc. Researching insurance online is about as fun as watching a hotdog decompose (it is a very very very slow process). For that reason, agents will remain in business.”
• “Distribution is only half the equation. The other half (where the real value for companies having agents comes from) is Retention. Commercials, pop-ups, and billboards cannot retain business anywhere near as effectively as a human can.”
• Want to chime in? Visit this thread and add your two cents now:
The End of the Insurance Agent
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