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Majority of New Policy Sales Initiated by Online Insurance Quote Applications: J.D. Power and Associates

By Carolyn J Dawson
TMCnet Contributor

Over the past five years, insurer’s websites have been gaining importance, with new business being generated among buyers based on the websites rather than the call center sales channel or the local agencies. The 2011 U.S. Insurance Shopping Study released by J.D. Power and Associates confirms this information, showing that the majority of buyers are opting for an online rate quote before purchasing an auto insurance policy.

The annual study held by J.D. Power and Associates basis its results on the purchasing behaviors of consumers and their shopping traditions. They also take into consideration the satisfaction quotient of recent buyers of auto insurance. The quotient is calculated depending on the price, distribution channel and the policy offerings.

In a release, the Senior Director of global insurance processes at J.D. Power and Associates, Mr. Jeremy Bowler said that “This transition to websites as the dominant lead-generation channel is an important shift for insurers to recognize and address in their marketing and sales strategies. While nearly one-half of all accepted Web quotes are closed by either an agent or call center representative, customers are clearly more often looking to insurers' sites or third-party sites in the early stages of the shopping process, and this behavior is blurring the lines of how we traditionally think about the discrete sales channels."

The SM study also states that over the last two years, the policy churn has seen heights that have not been so since 2008, with the U.S. market going big on auto insurance policies.

Bowler also said that “In 2010, the insurance industry spent $5 billion on marketing and advertising, with the top four companies alone spending more than $2.6 billion. As a result, the rate of shopping has increased significantly year over year, as has the policy defection rate. A majority of the customers shopping for a new insurer are doing so either because of a life event that has changed their insurance needs, or because they are looking for a better deal. However, no group is more interested in switching than customers who are displeased with the service provided by their incumbent insurance company."