Buying Insurance Is Like Online Dating? Or Loving a Local Agent?

By | February 13, 2015

Buying insurance has been compared to having a root canal and betting with pirates. It’s been called confusing and boring. More than a few have said they’d rather listen to nails on a chalkboard than sit through an insurance pitch.

But the image of insurance buying may be changing. Now it’s being likened to online dating. That has to be an improvement. Right?

Arguing that with today’s technology the world of knowledge, commerce, and even love, are at people’s fingertips and available for capturing anywhere and 24/7, online insurance agency Answer Financial asks, why not insurance? If 40 million people choose to find love online, maybe they should buy insurance the same way.

In the spirit of Valentine’s Day, Answer Financial, which sells personal lines insurance online through its agencies Insurance Answer Center and Right Answer Insurance, offers eight reasons to think of insurance like online dating. Among them:

  • People get to see if they are compatible before they commit.
  • Technology does the work.
  • Online services expand the pool of prospects and options.
  • They can find the partner who wants them just the way they are.

Answer Financial is having some fun. Nothing wrong with that. At the same time, they and many others take online insurance very seriously. Walmart and Overstock.com are already selling insurance online and Google is getting ready to enter the market. The online space is getting more crowded than a singles bar on Saturday night (where anecdotal evidence suggests few, if any, people go to hook up with an insurance agent).

Heart-to-Heart

So is online dating a good business model? Do insurance agencies and carriers want to be compared with dating services? Do insurance buyers want to be seen as lonely valentines? What can insurance pros learn from the likes of match.com?

Independent agents and carriers have been criticized for being slow to adopt new technology. There is some truth there. However gradually, more and more have gotten into the online business and more will in the future.

While Answer Financial caters exclusively to online shoppers, most independent agents don’t do this, not because the agents themselves have anything against technology but because many of their customers do when it comes to buying insurance.

Just as most people do with dating.

Thirty-eight percent of Americans who are “single and looking” say they’ve used an online dating site, according to Pew Research. But only 10 percent overall say they’ve actually tried online dating.

A little more than 10 percent of people who started a long-term relationship in the past decade say they met their partner online, the Pew study found.

Men and women ages 25 to 34 are the biggest online daters, with nearly a quarter using online dating sites, compared with just 10 percent of people in the 18 to 24 age group. For ages 35 to 44, 17 percent have used dating sites. After that, there is a big dropoff; only three percent of those over 65 have ventured into online dating.

While about half of auto insurance customers shop online, less than half end up actually buying online, according to market research. As with dating, those most active online are younger insureds.

There is some evidence to suggest that overall, there is actually less shopping around for insurance. Apparently, some people are happy in their current insurance relationships, or not unhappy enough to bother shopping around. Sounds like many marriages.

No doubt the numbers for both online dating and insurance are changing, and both will probably eventually increase.

Like other online experiences, and traditional dating for that matter, online dating has its downside. One worth noting is that many– more than half– online daters report that someone “seriously misrepresented themselves” in an online dating profile and another 25 percent have been made to feel uncomfortable or harassed by an online contact, according to Pew’s research. That’s not very romantic.

Also, it’s worth noting that whites are more into online dating than minorities.

Online insurance shoppers tend make their decisions based on money; Pew’s research shed no light on whether online daters also do this.

Clearly, online dating, like many online experiences, is not for everyone. Neither is online insurance a perfect match for everyone. Thus selling online may not be the answer for every provider.

Most personal lines insurance agencies and their carrier partners cast broader nets and serve larger groups and communities, beyond the narrow — albeit expanding— population of online shoppers.

More and more people may eventually come to prefer the convenience of a computerized match but right now not all trust it or see it as personalized service. Some customers want more than a one-night stand and some prefer a little hand-holding when difficulties or changes occur.

While they might occasionally check out the merchandise from a distance, the majority of insurance buyers — and lovers — still like a little human interaction before they commit to a long-term relationship. That’s where local independent agents come in.

The experiences Answer Financial celebrates are not unique to online services, nor are they guaranteed. Independent agents also offer many of them. There are plenty of customers who value online experiences but in the end want to look their insurance date in the eye. Because like true love, the right insurance means never having to say you’re sorry.

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