Young consumers more inclined to purchase insurance online
Consumers show interest in using insurance aggregators and social media
SAN DIEGO, CA; May 24, 2011 – Nearly two-thirds (64 percent) of U.S. and Canadian consumers are planning to renew or purchase insurance products through an agent in the next 12 months, according to a survey of 2,500 consumers in both countries by Accenture (NYSE: ACN).
While younger consumers also predominantly favor agent networks – 59 percent of 25- to 34-year-olds prefer buying insurance through this channel – almost one-third (31 percent) of them said they plan to purchase online in the next 12 months.
“In an environment with tighter margins and increased regulatory pressure, it is critical for insurers to know what consumers want and how they want to purchase it,” said John DelSanto, global managing director of Accenture’s Insurance practice. “We believe that multiple distribution channels will continue to co-exist and insurance carriers should continue to better integrate their channels. Insurers with sophisticated analytic capabilities will be able to better understand their customers’ evolving needs, which products and services best address those needs and which channels are most effective for their situation.”
According to the survey, the top criteria for consumers in choosing an insurance provider are speed of problem resolution and the their ability to offer insurance products and services that meet their needs, with 68 percent and 67 percent saying this is very important, respectively. Competitive prices and price transparency were also near the top of the list at 65 percent and 63 percent, respectively. Consumers’ interest in price and price transparency was further supported by the finding that more than half of respondents (55 percent) said they would be interested in using insurance aggregators – websites that compare quotes between different insurance companies. The proportion is even higher for younger consumers, with 75 percent of 25- to 34-year-old respondents expressing interest in doing so.
While the survey found that the use of social media to perform research on insurance products is in its early stages, with 21 percent of respondents using or considering using social media for such purposes, younger respondents again demonstrated much greater interest in this channel. More than a third (36 percent) of respondents under 34 would consider using social media to perform such research.
“With the rise of Internet usage, new purchasing behaviors have emerged that insurers cannot ignore,” said Erik Sandquist, a senior executive in Accenture’s Insurance practice. “Before buying, more and more consumers perform their own research online, compare options and seek recommendations from others, using social media sites or referral sources. This is very common in sectors like travel and electronics, but our survey demonstrates that insurers should expect similar purchasing behaviors from their customers.”
Among other key findings:
- Two respondents out of ten (21 percent)are considering switching to a new insurance provider the next time they purchase or renew their policy. Younger respondents are more willing to switch providers, with almost a third (31 percent) of those aged 18 to 24 saying they will not purchase or renew their policy with their current provider, or will look around.
- Younger respondents were much more willing to pay a premium for personalized advice or assistance when purchasing insurance products, with 39 percent of those aged 18 to 24 saying they would do so, compared to 23 percent across all age groups.
- Banks are perceived as stronger than insurers with respect to offering financial advice. Respondents said they were more likely to see banks as potential “one-stop shops” for financial services, with 47 percent for banks versus 18 percent for insurers. Also, 39 percent said they see their bank as their preferred financial advisor, versus 13 percent for insurers.
- Consumers seek a consistent experience from insurers, no matter what distribution channel they use. A high proportion of consumers (84 percent) said it is important that insurance products and services be identical across available channels, such as agents, online and call centers.
“While our research points to significant opportunities for insurers who can reach consumers with the right products through the right channels, the personal lines insurance market remains extremely competitive,” Sandquist said. “Our survey shows that consumers want speed, products that fulfill their needs and competitive and transparent pricing. It is increasingly important for insurers to align their channels to meet these rising expectations.”
Accenture commissioned a survey of 2,502 individuals in the United States and Canada of at least 18 years of age who own at least one insurance product. The survey was conducted to assess consumers’ purchasing behaviors, intentions and drivers for individual auto, home and life insurance products. The online survey was designed by Accenture and conducted by Lightspeed Research during January and February of 2011. Respondents were representative of the population in gender, age and income. The 2,502 respondents included 2,001 from the U.S. and 501 from Canada.
Accenture is a global management consulting, technology services and outsourcing company, with more than 215,000 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$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.
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