Online insurance buying increases

Individuals in developed markets are more likely to be insured than people in developing markets. In developed markets, consumers increasingly are purchasing insurance online rather than through an agent, the traditional channel.
This internet disintermediation is most pronounced in the UK. But the global trend is clear in BrandZ data, which shows that the number of consumers searching for information online more than doubled during the past six years, increasing to 12 percent in 2011, from 5 percent in 2006. The proportion of brands recommended by users increased over the same period, from 43 percent to 49 percent, according to BrandZ data.

The key question for insurers is whether to sell insurance direct or go through insurance agents, partners and intermediaries. With no single right answer, the insurers experimented with various approaches, attempting to improve the brand experience by simplifying purchasing.
They followed a linear logic. By winning in search, the brands expected to increase their share of online insurance quotes and convert the quotes into an increase in policies signed. As an added benefit, a shift to direct online insurance sales could reduce reliance on insurance agents and the size of commissions.


To maximize search results and capture more leads, Allstate last year purchased an insurance online aggregator called esurance. Esurance provides online visitors with insurance quotes from Allstate and Allstate competitors because, as the website’s headline explains, “The key to saving is comparing, and you can do all the comparing you need right here.”

Ensurance complements the Allstate brand website and the brand’s agent network. And it enables Allstate to compete in the direct channel with companies like Progressive and Geico. The Progressive value proposition is about easy, transparent one-stop shopping where the consumer can obtain several insurance quotes online from competing companies. While Progressive may not always win the business, it receives a high share of quotes.

In the life insurance business, Metlife expanded its distribution into the midmarket by investing heavily in developing a website option for purchasing term life insurance without face-to-face agent involvement. The online approach addressed the fact that the US is relatively underinsured as a nation.
Also, simplifying life insurance with the online option lowered a barrier to purchase. Selling direct should make life insurance accessible to a younger, technology-oriented generation more comfortable engaging online than completing paper questionnaires. The online option potentially lowers costs and helps advance Met’s brand proposition of providing the right coverage at a reasonable price.

In B2B, Zurich similarly invested heavily in digital as a supplementary channel to its agent-generated business, in an effort to more effectively reach small business owners. Zurich intended to influence risk managers at small businesses to make the brand became a larger part of the decision process.

For more information, check out consultancy firm Millward Brown's BrandZ Top 100 Most Valuable Global Brands 2012 findings.

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