Why is the Insurance Industry Moving to the Web?
Thursday, July 31, 2014
Where did you last get an insurance quote? Was it on the internet? Most people now show around for quotes on the internet. It is becoming increasingly common for insurance companies to offer quotes, policy sales and account management services on their websites. What are the benefits for them?
It is more efficient and less resource intensive for insurance companies to offer at least some of their services on their websites. Many of the standard questions that agents have to ask before compiling a quote can be completed by clients alone on websites without taking up the agents' time. Or the self-service facilities that allow clients to change their account details free up call center staff to deal with more important matters.
The increased efficiency means that insurance companies can use fewer staff, and thereby offer more cost-effective insurance solutions to their clients.
The internet allows for vastly superior communication with clients. Companies can post generally helpful information that clients can use to minimize risks. They can also communicate useful information in a timely manner following major disasters like floods or hurricanes.
Another benefit is the potentially larger market to which companies can market their policies. In the past potential clients obtained quotes only from insurance companies whose advertisements they had seen on television. With insurers moving onto the internet, people now have one central place to search through all the insurers in their regions. Moreover, running websites is much cheaper than television and newspaper advertisements, so insurers score there too.
Companies are not only able to advertise their services to larger markets, but are also able to sell to more people. Those people who were never sufficiently motivated to spend hours on the phone or in agents' offices are now included in the pool of potential clients.
It increases market transparency in the industry, because of the information that is publically available on companies' websites. Prices, policy contents and pay-out practices are public, and potential clients can make comparisons among companies across the industry.