For a number of years, the auto insurance marketplace has been defined by one chief showdown: direct sellers versus agents. Now, developments in the online comparison and insurtech spaces promise to upend the status quo and redefine how insurance policies are sold.
Fortunately for insurance agents, this change does not leave them just another profession threatened by the internet. Rather, it may actually help the channel gain ground against its greatest competitors.
As founder and CEO of Insurify, Snejina Zacharia leads what is now the industry’s largest marketplace for auto insurance shopping. The virtual insurance agent is partnered with 102 carriers across 48 states and, most notably, more than 800 agencies.
It’s part of what Zacharia sees as an eventual “full integration” of distribution channels in auto and potentially all personal insurance lines.
“I think it’s superficial to think we can just replace agents,” Zacharia told Insurance Business America
. “The agent network is powerful and a significant portion of US consumers continue to be served by it, so what we need to do is build an infrastructure that will create a big, integrated distribution network that gives agents the tools to remain relevant in a digital environment.”
Insurify has aimed to do that by creating a sophisticated algorithm that partners customers with one of the company’s agency partners at the point of sale. About one of every four users go on to contact the agent, who splits the commission with Insurify.
Supporters of the system say it allows agencies to connect with customers they may have otherwise lost to direct carriers, who have far more marketing and consumer outreach resources.
“The Insurify partnership has helped us grow five times [and] makes our agents 50% more efficient,” said Joe Orr, executive vice president of insurance with Clearlink. “We are able to compete with companies such as GEICO and State Farm and continue to grow our business.”
Insurify staff and partners are not the first comparison service to make this argument. When Google Compare launched in 2015, Compare.com CEO and Google Compare partner Andrew Rose told IBA
the development was actually a positive one for agents.
“Our model is something that gives agents considerations where they wouldn’t have it otherwise,” Rose said. “We have a shot in competing against GEICO and other big advertisers. You may have to sacrifice a bit of commission up front…but it will allow you to take the personal relationships you offer and put it out on the multi-product market.”
If Rose, Orr and Zacharia are correct, such an “integration” of the channel may help agents regain some ground against direct writers, which claimed 51.2% of property/casualty insurance net premiums written in 2014.
Zacharia even hopes to see insurtech, and Insurify specifically, expand to other lines, including home, rental and motorcycle in 2017 and life insurance in 2018.
“In 2020, 50% of shoppers will be Generation Z and they’re looking for tools to serve their needs in the easiest way possible,” Zacharia said. “Our goal is to provide those tools and be the dominant marketplace for auto, and eventually all, insurance shopping in the United States.”
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