Insurance Companies Increase Web Use for Customer Service

More insurance companies are developing Web sites that improve customer service, according to a survey by IVANS, Inc., but results of a Progressive study found consumers still overwhelmingly use agents to purchase insurance.

IVANS, a provider of integrated e-business and networking solutions for the insurance industry, conducted its 2001 Web Site Survey among 110 property and casualty insurance companies. It found the companies are developing Web sites that improve customer service by providing increased functionality 24 hours a day, seven days a week.

“Outsiders often criticize the insurance industry for lagging behind other financial service industries in using the Internet to sell directly to consumers,” said Clare DeNicola, vice president, IVANS. “But these transactions are still incredibly complex. We in the industry see the Internet as a tool for our agents and our customers, not a sales vehicle, and these results certainly bear that out.”

The dominant trend among insurers, according to the IVANS survey, was the rise in a variety of self-service features at insurance company Web sites, from agent locators to online claim reporting, making insurance a 24/7 operation for consumers.

“More and more Web sites are steering consumers to agents through locators that list an agent closest to the consumer,” said DeNicola. “Of the insurance Web sites recently reviewed, 71 percent have agent locators. If a customer wants to receive a quote or purchase a policy, most Web sites direct them to agents. The role of the agent appears to be bigger than ever, as Web sites direct customers to agents to obtain more information and buy policies. The Internet, initially thought to bypass agents, has in fact enhanced their role — by steering business to them.”

In addition to supporting customer-agent relations, the Internet enhances service by providing tools to facilitate customers’ needs. Of the Web sites reviewed, more than 85 percent provide customer service information, 16 percent allow customers to check a payment, 16 percent allow policy updates and changes, and 20 percent offer online claim reporting. The survey also found that 64 percent of the sites provide access to industry information such as research, and another 34 percent include links to industry Web sites. Only 18 percent of carrier sites offer online quoting, and only 5 percent of the Web sites are selling directly to the consumer.

At this point it seems wise for insurance companies to use the Internet to enhance the consumer relationship with agent. Results of a survey by Progressive Insurance show that while people ages 18 to 34 were more likely to use the Internet to purchase auto insurance than people ages 35 to 64, an majority of consumers (67.6 percent) bought their current auto insurance policy with a local insurance agent with an office in their area.

Progressive surveyed more than 31,500 consumers over the phone in 156 markets countrywide from November to December 2000. Among the findings:

  • When asked how they purchased their current auto insurance policy, 67.6 percent of respondents said with a local insurance agent with an office in the area, 21 percent said directly with an insurance company over the telephone and just under 1 percent said directly with a company over the Internet.
  • Respondents ages 18 to 34, however, were significantly more likely to have purchased auto insurance using the Internet than respondents ages 35 to 64. And, 68.2 percent of respondents ages 35 to 64 said they purchase their insurance with a local insurance agent – compared to 66.2 percent of respondents ages 18 to 34.
  • Both male and female respondents were more than three times as likely to purchase their auto insurance from a local insurance agent than purchase directly from a company over the phone.

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