Wednesday, 28 January, 2009 Leave a comment
Q. Insurance: Agent or Buy Online?
Insurance can be broken down into two different groups, agent providers and online providers. Many people enjoy having a single insurance agent that can provide for all of their needs. If you need a policy changed or want to make a payment you can just contact your agent. The number and size of online insurance providers is also growing. Many Generation Y individuals are very comfortable buying insurance (and most any product) online. I enjoy having an agent that I can contact. I also enjoy being able to pay my bill and make minor policy changes online. I am able to do both with my current insurance company. I don’t think I can sign up for insurance online though without going through an agent. Questions 1)Do you prefer to work with an agent or buy insurance online? In general are you comfortable buying things online? 2)Which do you think will win in the end, Agent or Online? Do you think both will always coexist because some people like buying on line and some like having a personal agent. 3)Do you think there is anyway to combine the two selling models? Maybe an insurance company that can provide a policy over the internet and has agents.
A. The type of "pricing strategies" that DR refers to must have been created by an accountant as a sick joke! I don’t know of any other industries where major global institutions have so readily bought into a philosophy of creating inferior products, selling them at unsustainable prices and hoping that, between clever wordings, clever investments and/or luck that they will escape terminal reputational damage….or is that just a variation on the theme that has brought the global banking system to its knees!?
We know insurance is a grudge purchase and the sooner insurers recognise that they cannot create a pricing model so cheap as to change that fact the better!
They Gen Y/X discussion has relevance but I think it is more to do with the values or expectations of the environments (era) in which they have formed their view of the world. Both can be equally at home with the IT skills required to transact insurance and many other things online.
I like Allen’s thinking but reckon that the answer lies with the creators of the products to get less (financially) smart and get back to the business of offering the protection and "peace of mind" that people should expect from such a purchase. IF they asked their policyholders is that not what they would be told? Efficiency and integrity are always high on client wishlists…so they should be.
We understand the handling processes, accounting, and regulatory needs. Where once we were reliant upon a back office reminiscent of a Dickens novel, we now have the technology to manage multiple processes. The technology also copes with the most complex pricing models. So that is the transactional functions catered for. The trick is what to do next? Many have tried to continue the theme believing that IT and commoditisation of more and more products was the route.
I’m not going to spell it out but "relationships" do not exist between Gen Y (or X) and technology in whatever form. Stable, profitable relationships are built between individuals. The two are not mutually exclusive and it is surely a case of deploying both to best serve the needs of the end user in a manner that they determine NOT that is dictated to them!!!
But it only really works if you combine it with products that deliver what they promise i.e. value NOT price.
Warren Buffett called it right when he said "Price is what you pay value is what you get".
David G Wilson
Strategic Development Director
28th January 2009