Non-industry analysts may herald the arrival of comparison sites like Google as the death of the independent agent channel, but agents—and even those involved with comparison sites themselves—say such tools could actually benefit agents.
Andrew Rose, CEO of Compare.com, spoke to Insurance Business
about the supposed threat sites like his represent to agents. He, for one, isn’t buying it.
“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 to get your skin in the game, but it will allow you to take the personal relationships you offer and put it out on the multi-product market.”
GEICO, and what he calls the other members of the “big four” insurance advertisers, are actually where Rose believes threats to agents lay. Along with Allstate
, State Farm
and Progressive, GEICO would “consume market share” simply by virtue of their well-funded ad campaigns.
“They receive a disproportionate amount of consideration,” he said. “The market share change could be dramatic if sites like ours didn’t exist.”
The comparison model instead presents a multitude of carriers to consumers in the place they are increasingly likely to look—the Internet. And because many such sites allow carriers the option of selling to consumers either online or through an agent, agents appointed with these smaller carriers have a better chance of making commission.
Thanks to current consumer shopping behaviors, that chance is likely. Although roughly 70% of insurance shoppers begin their research on the web, the vast majority still end up in front of an agent.
“The number of policies [comparison shopping sites] are actually issuing is miniscule,” said Brian S. Cohen, operating partner at Altamont Capital Partners. “What’s happening is that individuals are visiting these sites to get a sense of a reasonable price, but they still want to go to a professional to figure out what’s best for them.”
This is even true for millennials—those born after 1980—who are often characterized as a tech-savvy, and tech-exclusive, generation. While approximately one-third do purchase their auto policies online, another one-third use an agent, an Applied Systems
And that percentage is only likely to increase as they age, said John Tiene, CEO of the Agency Network Exchange
“As people mature, they have a different set of concerns and issues to deal with,” Tiene said. “Because they now have a house as well as a car, and children with risks of their own, we find they move back to the independent channel.”
Do you feel threatened or helped by comparison sites? Neither? Let us know in the comments below!
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