Two new reports this week raise the question of how the massive growth in e-commerce will impact the insurance business.
A report called
Insurance 2020: The digital prize – Taking customer connection to a new level, by PwC says that traditional insurers could lose out in the digital age. Their UK study found that 86% of those buying insurance will do some online research before purchasing, and 50% will buy online. What does this mean for brokers and agents?
Clearly those with big budgets can get ahead in the online world, although they will have to compete with the insurance giants with even bigger budgets who can sell direct. Another stat from the report shows that 18% would be interested in buying their insurance from a major retail brand; and we know those brands are often out in front on search results and online platforms. Are we going to see Amazon Insurance?
Michael Spitteri, digital insurance partner at PwC says “Insurers cannot ignore new entrants such as search engines or online retailers. If traditional insurers fail to provide customers with what they want they will buy from the brands they trust and which deliver the experience they demand.”
A second report, released today by Albany-based research company
ResearchMoz looks at the rise in online aggregators; websites that allow consumers to compare quotes from multiple insurers. They are hugely popular in Europe, having started in the UK a decade ago, and account for more than half of motor policy purchases in some countries.
North America, along with much of the world outside Europe, has not yet seen aggregators, or ‘comparison sites’, flourish yet, but the report cites growth opportunities here in the next 5 to 10 years.
Although it could be seen as a marketing opportunity for insurers, it depends on their size. For smaller companies, who may not have multi-million dollar marketing budgets, aggregators have provided them with a massive audience. For the biggest names, profits have been hit by sharing the online shop window with the smaller names. It has created a highly competitive market.
With half of the world’s population set to be online by 2018 and the rapid growth of mobile devices driving online commerce faster than ever, the challenge for insurers is clear – find a way to engage with customers online or risk losing out to those who are only too happy to step into your space.
