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Problems with Online Insurance Services Could Mean High Costs for Insurers

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According to the results of a new survey, four out of five Americans (83 percent) are likely to resolve any issues they experience when purchasing or processing an insurance claim online by reaching for the phone. The survey, conducted by Ipsos Public Affairs for OpTier, a business transaction management company, also found that young people aged 18-34 are 10 percentage points more likely than older consumers to have already purchased or to plan to purchase or research health insurance online (25 percent versus 15 percent, respectively). As this segment of the population ages, insurers may be able to expect more consumers turning to the Web to compare and buy health insurance plans.

Online customers looking to resolve claims and other issues via the telephone can be expensive for insurance companies, proving costly in the form of lost customers or a customer service representative’s time. A February 2010 report from Forrester Research Inc., titled “Increasing Online Insurance Self-Service Adoption,” estimates that “for every 20,000 calls deflected to online self-service, an insurance carrier could realize $100,000 to $200,000 in potential cost savings.”

The survey also found that young people (18-34) are taking the lead in researching and purchasing insurance online. This data points to steadily rising pressure on insurance provider sites to improve existing customer service levels while readying themselves for the next wave of online consumers.

Other interesting data points in the survey include:

  • Consumers with a college degree (89 percent), with a household income of $50,000 or more (86 percent), and who are married (86 percent) are most likely to abandon the computer and pick up the phone to resolve an issue they experienced online.
  • Those who are more educated are also more likely to research or purchase a health insurance policy online; 27 percent of college graduates report that they have already or plan to do so, compared with just 15 percent of those without a college degree.

Insurance companies that participate in comparison-shopping sites face the greatest pressure to deliver estimates in just a few seconds, as glitches in site performance add up to lost revenue. Meanwhile, online insurer portals face similar pressure to provide content that efficiently services customers. The recent health care reform legislation is likely to contribute to increased traffic on insurance sites in the next five years, as states will be required to create online exchanges where consumers who do not have policies through their employers can shop for insurance and get quotes.

Source: OpTier


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