Consumers Interacting with Companies Directly Rather than Through Agents

Inductis, a global consulting firm, has released findings that consumers are relying less and less on their agents and instead are going direct to the companies.

“The focus of this white paper is on the fact that the consumers are relying less on their agents and looking at direct insurers and this shift is a result of the gradual but powerful market forces that have emerged over the last decade,” says Mr. Dey.

The paper talks about massive advertising and branding designed to drive consumers directly to an insurer’s call center or web site, the emergence of more sophisticated pricing models to accurately estimate the price point at which any risk profile becomes profitable and should be insured, and increased consumer acceptance of the direct response model, as factors responsible for this shift.

According to Mr. Cacchione, “Over the next decade, these market forces are expected to accelerate the erosion of share of agent-produced business, both independent and captive. Sustainable growth will go to those carriers that can invest in building the right capabilities to grow the direct channel while managing channel conflict.”

What will be the place of local insurance agents in the future? Will the internet make them obsolete? Do you feel comfortable handling your insurance over the internet and 800 numbers? How much is a local agent worth?

Source: Insurance News Net