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Life Health > Life Insurance

Have online quote, will buy (but not necessarily in the U.S.)

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Websites that American consumers use to compare and shop for life insurance are mostly limited to inexpensive term products. And sales originating from these aggregator sites — AccuQuotek, SelectacQuote, PolicyGenius, among others — are not a “meaningful source of new business” for U.S. life insurers.

So reports Accenture Research in a new study, “Coming to terms with insurance aggregators: Global lessons for carriers.” Accenture Research surveyed 414 senior insurance executives across Europe, the Americas and Asia Pacific to determine how they are transforming their distribution models to increase customer engagement and meet customer expectations.

The study finds significant differences — particularly between the U.K. and the U.S. — in market penetration by aggregators. For example, more than three-quarters (83 percent) of insurers in the U.K. are considering setting up their own aggregator sites. This compares to fewer than 6 in 10 (58 percent) of U.S. insurers.

One reason for the lower market penetration by U.S. aggregators: a still greater preference among American consumers to interface with an insurance agent to learn about products. More than 4 in 10 (or 45 percent) of U.S. respondents said they would go first to independent agents to obtain information. That compares to just over a third (34 percent) that named aggregators as their first choice.

The report flags other constraints facing U.S. aggregators. Among them: state-based regulation and competition from well-established carriers that boast big advertising budgets. This will have to change, the report suggests, so as to better align insurers with growing consumer demand — particularly among millennials — for technology that makes comparing and buying products easier.

“The aggregator business model is more aligned with how customers compare and purchase products today than traditional sales channels for insurance,” said Roy Jubraj, a managing director in Accenture’s Insurance industry practice in the UK and Ireland. “Insurance customers expect a sophisticated online experience that provides real-time, accurate quotes, price transparency and competitiveness.”

The report notes also consumers shopping aggregator sites for term life products may be amenable to buying other financial solutions as well. These include basic financial products like consumer loans and credit cards, as well as online financial planning and wealth management advice.

More than half (58 percent) of insurers surveyed globally currently work with aggregators under their main brand. The percentage of carriers that work with aggregators under a sub-brand is lower at 43 percent, but respondents expect that figure to increase to 53 percent in the next three years.

In considering other options for using aggregator sites:

  • 51 percent of insurers surveyed say they are looking into defining low-cost products specifically for aggregators;

  • 35 percent are considering setting up a new sales structure dedicated to aggregators; and

  • 13 percent are not considering options with regard to aggregators.

“The aggregator model has the potential to change the economics around how insurers are distributing their products,” says Erik Sandquist, managing director for Accenture Distribution and Marketing Services in North America. “We expect aggregators to continue to grow in terms of the products they offer and the markets they serve, driven by customers that want options, transparency, and convenience.”

See also:

Life insurance underwriting: The questions matter

Direct annuity sales are coming. Are you ready?

What MetLife is learning from its Walmart pilot program

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