Personal service remains important
JANUARY 19, 2011 – The weakness of the economy for the past few years has positioned the insurance industry for growth. During the downturn, ultra-price-sensitive consumers and businesses became more likely to comparison shop and delay insurance purchases. The resulting competition among insurers fueled a host of innovations and improvements in how industry players leverage technology.
“With the advent of digital marketing channels�including email, online and mobile search and display advertising, websites and smartphone apps�and a patchwork of direct, agent-based insurers and aggregators competing online and offline, the insurance purchase process is becoming increasingly competitive and multifaceted,” said Victoria Petrock, eMarketer analyst and author of the new report, “Shopping for Insurance Online: A Multichannel Quest.”
However, most industry research reaffirms the continued importance of the agent. A September 2010 study by the CMO Council found that agents (both captive and independent) were the predominant channel for purchasing insurance policies (62%) among US consumers. It also found that only 12% purchased their policy online and 2% bought through email.
“The insurance business remains driven by personal relationships and trust,” said Petrock. “But social media can be used as a natural extension of this networking model.”
Petrock added that both insurers and agents can explore ways to use social media to strengthen relationships that help build their brand, extend their network of contacts and generate leads and referrals.
A 2010 analysis by the University of Massachusetts Dartmouth Center for Marketing Research found that 28 insurance companies in the Fortune 500 had a Facebook account, 20 had a Twitter account and three had a public-facing blog. Other studies indicate that this participation is likely to expand.
Insurers also face a set of unique challenges with participatory media. “Unlike many retail categories that generate significant word-of-mouth from passionate consumers, discussion, rating and review of insurance products is not a natural fit for social media,” cautioned Petrock. “Companies that find creative ways to encourage positive commentary and can credibly manage negative feedback are seeing the most success in online social channels.”
By gathering the latest research and news from over 1,000 sources, eMarketer has established itself as the world’s leading provider of internet and e-business statistics. eMarketer’s Web site is at www.emarketer.com.