U.S. consumers are turning to digital sources for insurance quotes and other information, but still prefer personal contact with agents when purchasing insurance products, according to an Accenture survey of more than 4,000 U.S. automobile and home insurance customers.
Major findings include:
- Nearly three-quarters (76 percent) of consumers express a preference for setting up and paying for their auto and home insurance policies in person with an agent, and more than half (58 percent) indicate a preference for doing so via the Web.
- When asked where they prefer to obtain quotes, 43 percent of respondents choose websites, while 26 percent choose over the phone and 26 percent in person. A much smaller percentage (four percent) chooses mobile applications.
- Almost three-quarters (72 percent) of respondents also express a preference for getting information about products and prices from an insurer's website. Exclusive insurance agents rank third with 56 percent of respondents, behind friends and family, cited by 61 percent of respondents. Search engines and aggregators rank fourth and fifth at 55 and 54 percent with respondents, respectively.
"In defining their distribution strategies, insurers must recognize that consumers are becoming more diversified in their channel preferences at different stages of the buying process," said Erik J. Sandquist, a managing director in Accenture Property and Casualty Insurance Services. "Direct insurers continue to gain share as consumers grow increasingly comfortable buying policies online. This means that insurers with an agency distribution model must adapt to customers' changing preferences and integrate their agent networks with digital, mobile, and social media capabilities."
Age is not a consistent predictor of channel preference
Also according to the survey:
- Only 37 percent of respondents aged 18 to 24 say they prefer to obtain a quote via a website, compared to 53 percent aged 25 to 44 and 41 percent aged 45 to 64. However, 10 percent of the respondents aged 18 to 24 say they prefer to obtain a quote via mobile applications, compared to five percent aged 25 to 44 and one percent aged 45 to 64.
- Nearly one-third (32 percent) of respondents aged 18 to 24 say they prefer to obtain a quote in person; only the oldest respondents (aged 65 to 74) are more likely to prefer obtaining a quote in person (39 percent).
- More than two-thirds (68 percent) of respondents aged 18 to 24 say they would be willing to pay more for personalized advice when purchasing auto or home insurance policy, compared to 27 percent of those aged 45 to 64 and just 16 percent of those aged 65 to 74.
"Much has been written about young consumers - with their strong propensity for Internet, social media and mobile - fundamentally changing insurance distribution," said Sandquist. "Our survey reveals that many young consumers desire personalized advice and are willing to pay more for it - and a significant percentage prefers to obtain their quotes face-to-face. There are many demographic, psychographic, lifestyle and other factors which can account for differences in how customers would like to be treated. Some customers make decisions almost exclusively on price while others seek the best advice available, and this is not consistent by age groups. More sophisticated digital marketing, customer segmentation and analytics are needed to attract customers and deliver more personalized and relevant products and experiences."
Insurers have opportunity to build customer loyalty and establish differentiation
Among the survey's other findings:
- One-quarter (26 percent) of respondents either do not plan to renew their auto or home insurance policy with their current insurers or plan to look at other insurers' offerings.
- Nearly half (46 percent) of insurance customers think that the products and services offered by different insurers are essentially "all the same."
- More than one-third (38 percent) of consumers are willing to pay for personalized advice about the insurance that is best for them - and, of that group, more than half (56 percent) are willing to pay at least 10 percent more.
"Our survey research reveals a significant opportunity for insurers to grow market share as many customers plan to shop around when renewing their policies. Price remains the most important buying factor which will continue to put pressure on insurers to improve their cost structures. At the same time, our research reveals that a carrier's distribution model can be a strong differentiator, given the relative importance of factors such as interaction channel, advice and speed," said Sandquist.
Accenture conducted a quantitative online consumer survey of 4,067 individuals in the United States, with 2031 answering the questionnaire regarding auto insurance and 2036 answering regarding home insurance. Samples were representative of gender, age, and income as well as regions. Interviews were conducted in August, 2012.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 261,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.