TMCnet Feature
October 18, 2021

How Insurance Comparison Platforms Are Taking Over In America

According to recent studies, online now accounts for 25% of total insurance sales transactions in what was primarily a person-to-person business just a decade ago.

In an article by The Really Useful Information Company (TRUiC), titled “How to pass insurance exam” they explain how lucrative a career as an insurance agent is. Taking this into consideration, one should have a look at how this industry has changed over the past years. Personal insurance in the United States is at a crossroads.  As digital channels dramatically alter how customers interact with businesses, we believe the conditions are ripe for price comparison websites (PCWs) to alter the way insurance is distributed, with far-reaching structural implications for the industry. Progressive, GEICO, and Esurance have all developed into valuable online brands in their own right. Furthermore, we have discovered that many more customers shop for insurance online before purchasing it over the phone or in-person from a local agent.

On the surface, it appears that personal insurance in the United States has experienced upheaval on par with travel, music, and banking. A meaningful independent PCW presence is conspicuous by its absence. Customers have surprisingly few sources for market-wide online price comparison and instead navigate the product and provider landscape in an inefficient manner, accessing multiple insurances quoting websites or being bombarded with quotes from online insurance referral generators.

The Future Of PCWs

The increasing number of personal insurance PCW entrants, as well as pressure from non-insurance technology and retail powerhouses, indicate that PCWs can rapidly expand and transform the market, as they did in the UK.

It is anticipated that the digital channel will continue to grow at the expense of traditional face-to-face distribution and that one or more dominant insurance PCWs will emerge: price will become a more important decision factor, and consumers will value the transparency that independent PCWs provide. The traditional role of the local independent agent as navigator will be phased out in favor of more efficient digital distribution.

This has obvious implications for insurers and agents alike, as both are likely to compete against disruptive players. While this alters the competitive landscape, it also creates new opportunities. What is clear is that insurers who do not prepare for and embrace this new reality will lose control of distribution and customer experience, or worse, will join the ranks of many once-venerable brands in other industries.

Advantages Of Using PCWs

You Save Money

Customers can compare quotes from hundreds of insurers and sort them by price, allowing them to choose the cheapest option based on the criteria they specify. Price comparison sites frequently include a large number of lesser-known insurers, so your eyes may be opened to a deal from a smaller company that saves you a lot of money. However, the less expensive options may provide less comprehensive coverage and possibly higher excess charges, but they still provide the necessary coverage for those on a tight budget.

It Is Time-Efficient

With only a few finger clicks, you may obtain hundreds of insurance quotes with little effort. This allows you to collect a significant amount of condensed info without having to sift through dozens of websites. You may also make an account on comparison sites and preserve all of your information so you don't have to repeat it when browsing for other policies or switching providers. After all, time is money, and time is incredibly expensive, so saving as much as possible is a major draw for these sites.

More Choices Available

Price comparison websites are big business, and there are plenty to pick from. All of the websites request somewhat different information and do not all have the same insurers on their books, thus the list of quotations provided will not cover the same firms, resulting in various quotes. As a result, numerous can be utilized in tandem to identify the greatest discounts and verify the correctness of the data provided.

Final Thought

In recent years, price comparison websites have grown in popularity. However, the lowest offered price may not be the best overall protection. According to recently published publications, the auto insurance market is "dysfunctional" and does not reward loyal consumers, luring in new customers with "too low" pricing while raising premiums for existing customers. This raises the question of whether insurance companies are putting too much emphasis on delivering the cheapest coverage in order to compete on price comparison sites.

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