J.D. Power study: Independent agents hold advantages
Did you happen to see J. D. Power’s U.S. Insurance Shopping Study released this month? The firm surveyed over 16,000 consumers who got an Auto insurance quote in 2016. It’s worth reading the summary/press release because it reveals or confirms a number of interesting insights from the last year:
- Carrier rate increases over the past couple years have been modest, with average premiums increasing by 2-3% annually.
- Insurers are struggling to compete on price.
- Carriers are trying to drive new business sales through brand reputation, agent recommendations, and service.
- Quote volume is flat and the total number of insurance shoppers is basically unchanged from 2015.
OK, this isn’t very exciting you are probably thinking. But there is some extra good news for independent agents:
- Consumers rely more on agents to recommend which carriers to quote.
- Price still matters, but consumers say the most important influencer on whether to purchase the quoted policy or not is making sure they understand coverages.
- Consumers lean on agents for guidance when trying to understand premium calculations and selecting the right coverage.
Wow – basically, independent agents continue to play a critically important role in the insurance shopping experience. This is not really surprising to me, knowing the MA independent agent market the way I do, but it is great to see reflected in hard evidence.
A separate analysis of the study by Digital Insurance, reveals some more good news for agents.
- 45% of consumers in the study first went to a carrier website for an Auto quote, rather than 27% who went to an agent first.
- However, just 10% of website quotes led to a sale, while agents closed 33% of their quoted prospects.
Basically, the study verified that consumers want assurance from a qualified human before finalizing the purchase of a policy. (The study also showed that consumers will happily use online chat to get that human interaction, guidance, and assurance.)
If I were an independent agent, I would be motivated by this information and really ramp up the ways I authentically connect with consumers and offer guidance. Fifteen minutes may save someone 15%, but to get the right coverage and carrier and price I think insurance shoppers deserve more than 15 minutes of time.