Carriers, agents & brokers agree on technology uses but are disconnected
from consumers, according to study
ALEXANDRIA, Va.–The Internet is not being
used by insurance companies, agents and brokers as an effective tool for conducting
business, the just-released 2001 Future One Technology Study has found.
The study, an examination of industry
technology, was conducted by Future One, a cooperative effort of the Independent Insurance
Agents of America (IIAA) and 26 leading insurance companies.
“Future One launched the 2001 Technology
Study to establish a definitive understanding of the opportunities the Internet and
related technology present to the agency system,” explained Madelyn Flannagan, IIAA
vice president of education and research. “The study explores whether agents, brokers
and carriers can find common ground on technology, and looks at how they can cooperatively
optimize the role of technology.” The data for the 2001 Technology Study was
collected primarily online from three distinct groups: consumers/small-business insurance
decision makers, independent agents and brokers, and insurers.
The study found agents, brokers and carriers
conceptually agree on technology issues, with many similarities between what agents and
brokers consider interesting and carriers find important. While agents, brokers and
carriers are interacting online, they may be ignoring consumers. Acquiring new customers
is not viewed as an important element in the Internet strategies of agents, brokers or
companies, according to the study. However, consumers who use the Internet for financial
transactions are now looking for new insurance relationships online. Over the past two
years, an estimated 27 million consumers shopped online for insurance, including 21
million who conducted research and requested a quote, and more than two million who sought
an agent or broker online.
The study further indicated that insurance
shoppers are not satisfied with their recent shopping experiences online, and actual
purchases over the Internet are rare. More than three-quarters (77%) of consumers use
insurance Web sites to gather information, and 56% request a quote. Carriers, brokers and
agents who do not effectively offer themselves online are increasingly overlooked by
consumers, said Flannagan. “Many respondents feel that insurance sites are not yet as
good as banking and investment sites,” she explained. “They don’t perceive a
cost-savings from buying insurance through the Internet, and they lack faith in the
quality of online customer service. Policyholders still want to have personal interaction
with an agent or broker.”
Study respondents also indicated the following:
-
Carriers tend to lag behind in technological
capabilities when compared to agents and brokers. -
Carrier Internet capabilities vary widely
depending on size and market focus. Larger personal and commercial lines carriers are more
likely to have a full-range of Internet capabilities, but specialty carriers,
state-sponsored carriers and some smaller, regional, personal and commercial lines
companies appear to be less focused on technology strategies. -
Fewer than half of carriers will require
agents and brokers to have the minimum of a T1 connection by the end of 2003, while 52% of
agents and brokers expect to meet or exceed that requisite. Nearly all insurers expect to
provide online company and product information to agents, brokers and consumers soon.
Currently, 85% of carriers provide this information to agents and brokers; 79% to consumers. -
Carriers have set high goals for added
online information offerings. Only 55% of agents and brokers can view loss histories
online, but within two years nearly all carriers expect to offer this capability. Agents
and brokers are gravitating to carriers that have compatible online strategies, which are
leading to relationship changes. Technology issues that cause them to realign carrier
relationships include the perceived level of commitment to technology on a carrier’s part,
the speed and efficiency agents and brokers can serve customers, and the use of systems
that can make an agent or broker’s job easier or present workflow obstacles. -
Flannagan said the trend toward the use of
the Internet for insurance information gathering does not indicate a decline in the need
for personalized advice by agents and brokers. However, technology advances may make for
more educated consumers with higher expectations from agents, brokers and carriers.
Improved efficiency, increased exposure and enhanced communications are almost certain for
those who invest wisely and implement with vision and tenacity.
Study results are available in electronic and printed version. Ordering information can
be found at www.independentagent.com.
Future One is a cooperative effort between
IIAA and 26 diverse independent agency company partners. Established in 1981, Future One
focuses on conducting insurance industry research and coordinating industry efforts on
state government affairs legislative, regulatory, and public policy issues.
Founded in 1896, IIAA is the nation’s oldest
and largest national association of independent insurance agents and brokers, representing
a network of more than 300,000 agents, brokers and their employees nationally. Its members
are businesses that offer customers a choice of policies from a variety of insurance
companies. Independent agents and brokers offer all lines of insurance — property,
casualty, life, health, employee benefit plans and retirement products. Web address:
www.independentagent.com.
