Notice how they say “Auto Insurance” and not “Auto & Home Insurance” – they also state “don’t want to work with an agent.” A few things here, this means they are not targeting the more premium “auto/home” customer, rather the less desirable “auto only” customer. Further “don’t want to work with an agent” does not imply lower rates, rather it implies those who prefer not to interact with anyone. We are not talking the cream of the crop in either of these cases and past studies have shown online buyers tend to be higher loss ratio customers and it’s hard to maintain low rates with this type of business because they will run at a loss. Online portals selling insurance, whether it be filling out an agency form on their website or buying direct has always attracted the least desirable customers.
Excellent point and that is very true. After one does the numbers with all the negatives attach to this type of customer, I truly think they can make more money flipping hamburgers than serving this type of target market.
It’s amazing how Nationwide could quote online in 1 minute by answering 4 questions when Agents need to submit a huge amount of paperwork before a quote is released.
It would be interesting for Nationwide and the other online carriers to compare their loss ratios with those that were underwritten by licensed insurance agents. Ultimately, you will find that the online policy holders will only purchase the state minimum coverage versus adequate risk management amounts that licensed agents discuss with their clients. Buy what “you” need, as the commercials states, versus what is actually needed when a claim takes place. Just call Celini & Barnes and they will get you 8 times what the insurance carrier was willing to offer…
Notice how they say “Auto Insurance” and not “Auto & Home Insurance” – they also state “don’t want to work with an agent.” A few things here, this means they are not targeting the more premium “auto/home” customer, rather the less desirable “auto only” customer. Further “don’t want to work with an agent” does not imply lower rates, rather it implies those who prefer not to interact with anyone. We are not talking the cream of the crop in either of these cases and past studies have shown online buyers tend to be higher loss ratio customers and it’s hard to maintain low rates with this type of business because they will run at a loss. Online portals selling insurance, whether it be filling out an agency form on their website or buying direct has always attracted the least desirable customers.
They also are less likely to retain – people who shopped for price will shop for price in the future.
Excellent point and that is very true. After one does the numbers with all the negatives attach to this type of customer, I truly think they can make more money flipping hamburgers than serving this type of target market.
It’s amazing how Nationwide could quote online in 1 minute by answering 4 questions when Agents need to submit a huge amount of paperwork before a quote is released.
It would be interesting for Nationwide and the other online carriers to compare their loss ratios with those that were underwritten by licensed insurance agents. Ultimately, you will find that the online policy holders will only purchase the state minimum coverage versus adequate risk management amounts that licensed agents discuss with their clients. Buy what “you” need, as the commercials states, versus what is actually needed when a claim takes place. Just call Celini & Barnes and they will get you 8 times what the insurance carrier was willing to offer…
Nothing new here and just the same old efforts to reinvent the wheel. It will be a lackluster disappointment just like all the others have been.