Study: More Consumers to Purchase Auto Coverage Without Agent

August 9, 2007

Forty percent of U.S. adults say they would purchase automobile insurance directly via phone, Internet or mail without first consulting an agent, an increase from 29 percent in 2003, according toVertis Communications’ “2007 Customer Focus Insurance” study. In particular, adults ages 35-49 are 15 percent more likely than their counterparts in 2003 to make a direct auto insurance purchase without seeing an agent, up from 30 percent in 2003 to 45 percent in 2007.

However, the study also noted that an insurance company possessing a knowledgeable agent or representative continues to be the most important insurance service for 27 percent of all adults in 2007, up just 2 percent from 2003.

“Today’s consumer, particularly Generations X and Y, have become accustomed to accessing information through various media, and it is no surprise that the insurance industry has turned to new methods for selling their services to a wide range of consumers,” said Jim Litwin, vice president of market insights at Vertis Communications. “However, it is important to note that it is the combination of these response system services and not just one method that will be most effective. For example, insurance companies could provide information via direct mail, but offer a phone number or Web site for consumers to respond.”

Furthermore, the number of total adults in the United States considering the purchase of identity theft insurance grew to 17 percent in 2007 compared to 12 percent in 2003. Most other types of specialty insurance purchases, including long-term care, mortgage, critical illness, high face-value life, juvenile, and accident products have either declined or remained constant since 2003. Surprisingly, the number of middle-aged adults, ages 50-64, considering purchases of hospital/surgical benefits has also decreased from 28 percent in 2003 to 21 percent in 2007.

The Vertis Communications Customer Focus Insurance study, which surveyed 2,000 consumers via telephone, also revealed the following:

*Of all groups surveyed, middle-aged men ages 50-64 and young men ages 18-24 are most likely to read direct mail offerings from insurance companies in 2007, 23 percent and 22 percent, respectively.

*For women, direct mail pieces offering insurance services are most popular among women ages 35-64, with 15 percent indicating they would read this type of mail.

*Men ages 25-34 and women age 65 and older are least likely to read insurance direct mail pieces, according to respondents.

*For young adults ages 18-24, having 24/7 access to an insurance company is the most critical service, which has increased to 29 percent in 2007 from 23 percent in 2003.

*The value of online access to an insurance company has risen most drastically over the years among adults ages 25-34, from 2 percent in 2003 to 9 percent in 2007.

*Thirty-three percent of Hispanic adults surveyed in 2007 indicated they would consider purchasing life insurance, compared to just 25 percent of non-Hispanic adults.

*Also more popular among Hispanics than non-Hispanics is mortgage insurance, with 24 percent of Hispanics in 2007 indicating a possible purchase, compared to 18 percent of non-Hispanics considering the same.

*Additionally, Hispanics feel accessibility to an insurance company is the most important service one can provide, with 37 percent considering this a key factor in 2007, compared to just 27 percent of non-Hispanic adults.

*Conversely, non-Hispanic adults place more value on prompt insurance claim payments than Hispanic adults, 19 percent versus 10 percent, respectively (See Slide G)

The Customer Focus study is Vertis Communications’ proprietary annual study tracking consumer behavior across a wide variety of industry segments — financial, credit cards, insurance, publishing, casino gaming, retail, automotive — and media including advertising inserts, direct marketing, and the Internet. The survey was first conducted in 1998 and, in subsequent years, has been expanded and modified to identify emerging consumer behavior patterns and track shifts in consumer practices and motivations.

Source: Vertis Communications,

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