Internet vs. Agent: Study on VAs Shows Changes in Consumer Research

LIMRA finds changes in how consumers value sources of insurance information

Nearly two-thirds of consumers looking for information about annuities turned to the Internet, a LIMRA study released Wednesday found. The fact that people use the Internet to search for information is hardly earth-shattering, but LIMRA did find that the Internet is becoming a more valuable source in consumers’ eyes than it has been. In fact, while the Internet is gaining in value to consumers as a source of insurance information, insurance professionals are becoming less valuable to consumers.

Despite dropping slightly in consumers’ estimation, insurance professionals are still the most valuable source for information about insurance and annuities. Thirty-seven percent of consumers rated professionals as their most valuable source in 2012, down eight points from 2006. By comparison, the percentage of consumers who rated the Internet as their most valuable source increased seven points, from 18% in 2006 to 25% in 2012.

Mary Art, Research Director, LIMRA Technology ResearchWhile 61% of consumers go online to get information about annuities and insurance products, 69% still go to an insurance agent, broker or advisor, Mary Art (left), research director for LIMRA technology research, said in a statement.

While people are searching online for information, they still go to agents and advisors to actually make a purchase, Art told AdvisorOne on Friday. “One in 10 purchase online,” she said. “They use both in their research process, but they’re trying to collect as much information as they can.”

When consumers do go online, they’re typically looking for information about a company and its product offerings, general product information and, of course, to compare prices. Those topics were the most popular across all ages and income levels.

“One thing advisors need to understand is that the majority of people who come to them have looked online or will look online when they leave them,” Art said. “They have to accept that the Internet is part of the process.”

Where do consumers go for information?The report noted that while consumers of all ages and income levels are looking for the same kind of information, men and younger, higher-income consumers with more education tend to look online more than other groups. Consumers without children were also more likely to use the Internet as a source than those with children.

Generation Y consumers are more likely than older consumers to go online for information, of course,  but LIMRA also found those younger consumers used more sources of information than Gen X or boomer consumers.

“Once someone forms a relationship with an advisor, they’re more likely to call again,” Art said. Younger people, however, are still trying to educate themselves and likely haven’t established a relationship with an advisor.

While many consumers go online for information about insurance products, their search is usually triggered by offline events like a meeting with an advisor or insurance agent, a suggestion from someone they know, a life event or their employers’ human resources department.

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