Despite explosive growth in traffic, many insurance Internet sites fail to measure up to competing bank and brokerage sites, according to a recent eInsurance study by Booz-Allen & Hamilton, a worldwide management and technology consulting firm.
Insurance company sites do not draw as many customers to their sites or offer the extensive product mix or suite of services as their non-insurance competitors. However, insurance companies are moving quickly to forge distribution partnerships and expand their online offerings.
The 2001 eInsurance Study analyzes Internet usage data from Neilsen/NetRatings, the Internet audience measurement and analysis firm, to determine how consumers use insurance sites, comparing them both against one another and against bank and brokerage sites. As in past years, Booz-Allen also surveyed top insurance carriers, including Property & Casualty and Life/Annuity providers as well as top financial institutions and financial intermediaries, and reviewed over 200 websites belonging to insurance companies, banks, brokerages and online intermediaries.
According to the Booz-Allen survey, the online insurance market is expected to account for 1.5 percent of total net premiums written by 2005. Property and casualty products are expected to drive eInsurance growth, representing 88 percent of the online market by 2005.
Although visitors to insurance sites increased by 1,150 percent between 2000 and the prior year, insurance companies still attract far fewer visitors to their sites than other financial institutions. The top 10 insurance sites were visited by 5 million unique users in April 2000, compared to 18.2 million unique monthly visitors in April 2000 for the top 10 bank sites, and 11.5 million unique users for the top 10 brokerage sites. Furthermore, consumers spent less time at insurance sites — under 13 minutes per month, compared to 22 minutes per month at bank sites and 35 minutes per month at brokerage sites.
The Booz Allen survey shows that insurance companies need to aggressively upgrade functionality. While insurers have made plans to add capabilities such as problem resolution, claims tracking, self-administration of policies, online account viewing and bill payment, many have not yet done so. For instance, 86 percent of insurance customers want to self-administer their accounts, but only 25 percent of insurers allow that, although two thirds say they plan to implement it. While more than nine out of 10 insurers report that their customers have requested the ability to view their accounts online, this capability has been implemented by fewer than half of the insurers surveyed.
Response time also needs to be improved in many cases. In an e-mail response test of 50 randomly selected insurance sites, 54 percent of the companies did not respond to an e-mail question within one day. Although this result is actually slightly better than a similar test last year, a sample e-mail sent to over 50 brokerages and banks elicited a response of 63 percent within one day.
In addition, the survey found that customers will visit more often and spend more time on insurance sites that have a wider breadth of financial products and service features. For example, Nationwide, USAA and Prudential — all of which offer an extensive array of products that can be bought online — average three visits per customer each month, as opposed to one monthly visit per user to sites with narrower offerings.
Finally, insurers need to ensure that the consumer online experience is as convenient as possible and easy to navigate. The study showed that the average visit to insurance sites lasts 6 to 7 minutes — which means that insurers have a very short time in which to impress the consumer with the value of their site before they move on.
Booz-Allen believes insurance companies should claim prime “shelf space” on high-visibility sites run by banks, brokerages, account aggregators, and comparison-shopping marketplaces such as Insweb. The survey found that 45 percent of consumers are less likely to use their insurance carrier’s site if products and services such as financial aggregation are provided elsewhere. Many insurers acknowledge this: 47 percent of respondents expect to ally with online intermediaries and aggregators, while 43 percent will ally with banks and wirehouses.
Booz-Allen’s research suggests the move toward independent agents will continue. Executives surveyed expect to get at least 48 percent of their premiums through independent brokers/agents by 2003. The study results showed consumers prefer to buy insurance through both online research and in-person meetings, and the more complex the policy, the more customers want to speak to someone before purchasing. A healthy 88 percent of insurers maintain multiple channels.
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