So this study followed people who purchased insurance through a direct carrier 10 years ago? Right away this excludes people younger than their late twenties. Young people have simple insurance needs and their rates are higher; direct carriers are more likely to win them over with their low prices and commoditized products. As they age they need more insurance products and their rates come down, and they are more likely to value the expertise of an agent in making sure all their insurance needs are met and the convenience of bundling.
I guess what I’m saying is this study doesn’t really tell us anything we didn’t already know, and I wouldn’t necessarily interpret the numbers as “good news”. Note that the article title states that the customers are “returning to” independent agents but I can find no support for the claim that these customers started with independent agents in the first place.
It’s a little hard to “return” to an independent agent without leaving one in the first place. I think most of the independents on this site are a little bias about the value we believe we bring to the table. You’re right that young people have simple insurance needs, but searching for the cheapest price without a knowledgeable person advising you about the repercussions of “cheap” v. “inexpensive” is foolish. But then again, young people do tend to be on the foolish side. I know I was.
That may be, but this one isn’t on IJ – this was just a survey of 1,000 people done by a marketing firm on behalf of The Hanover Group. Not exactly a peer-reviewed statistical study of insurance purchasing habits over time.
Youngin’ that’s like saying that younger people would prefer to eat at McDonald’s than Morton’s Steak House. The difference here is that they can have Morton’s for essentially the same price as McDonald’s. The most important difference here, Youngin’, is that people who pull up to the drive through window at McDonald’s (the internet) are not required to cook their own food. With the direct-response insurers, you are left to buy based on price, not on coverage. You make the wrong choice and find out the hard way, you cannot sue yourself for malpractice.
I was just criticizing the methology and conclusions of the “study”, not arguing the merits of each distribution channel. If more people really just had a basic understanding of insurance I think most of them would choose to go through an agent. Well, most “good risks” would anyway.
This is relevant to what’s trending in the past 2-3 yrs. A return of a hard market has pushed IA to bring value to our audiences. Independent Insurance Agents, Insurance Alliances, and Insurance Carriers have stepped to the plate, and decided to bring Price = Value to the insureds in order to compete with low pricing. So why is direct’s PIF going up? well, “The Grass is Greener until it’s VALUE time” I think the study is a good news and Competitive Price + Value = Independent Agents.
interesting…
That’s refreshing and good news to hear!
This does not surprise me!
Glad to hear it. We work very hard to retain our clients and having a staff that knows their product.
Oh, math. Why u so hard?
It is about time that People see the light and the value of an agent. Your insurance is only as good as your agent.
So this study followed people who purchased insurance through a direct carrier 10 years ago? Right away this excludes people younger than their late twenties. Young people have simple insurance needs and their rates are higher; direct carriers are more likely to win them over with their low prices and commoditized products. As they age they need more insurance products and their rates come down, and they are more likely to value the expertise of an agent in making sure all their insurance needs are met and the convenience of bundling.
I guess what I’m saying is this study doesn’t really tell us anything we didn’t already know, and I wouldn’t necessarily interpret the numbers as “good news”. Note that the article title states that the customers are “returning to” independent agents but I can find no support for the claim that these customers started with independent agents in the first place.
It’s a little hard to “return” to an independent agent without leaving one in the first place. I think most of the independents on this site are a little bias about the value we believe we bring to the table. You’re right that young people have simple insurance needs, but searching for the cheapest price without a knowledgeable person advising you about the repercussions of “cheap” v. “inexpensive” is foolish. But then again, young people do tend to be on the foolish side. I know I was.
youngin’, I hate to say it, but it seems more and more the articles on here aren’t well researched. What to do, what to do.
That may be, but this one isn’t on IJ – this was just a survey of 1,000 people done by a marketing firm on behalf of The Hanover Group. Not exactly a peer-reviewed statistical study of insurance purchasing habits over time.
Youngin’ that’s like saying that younger people would prefer to eat at McDonald’s than Morton’s Steak House. The difference here is that they can have Morton’s for essentially the same price as McDonald’s. The most important difference here, Youngin’, is that people who pull up to the drive through window at McDonald’s (the internet) are not required to cook their own food. With the direct-response insurers, you are left to buy based on price, not on coverage. You make the wrong choice and find out the hard way, you cannot sue yourself for malpractice.
I was just criticizing the methology and conclusions of the “study”, not arguing the merits of each distribution channel. If more people really just had a basic understanding of insurance I think most of them would choose to go through an agent. Well, most “good risks” would anyway.
With all this good news, why are the PIF counts of direct writers continuing to grow?
This is relevant to what’s trending in the past 2-3 yrs. A return of a hard market has pushed IA to bring value to our audiences. Independent Insurance Agents, Insurance Alliances, and Insurance Carriers have stepped to the plate, and decided to bring Price = Value to the insureds in order to compete with low pricing. So why is direct’s PIF going up? well, “The Grass is Greener until it’s VALUE time” I think the study is a good news and Competitive Price + Value = Independent Agents.