How brokers will remain valuable in the online insurance age
Published: August 15, 2019
Updated: September 1, 2019
Author: Luke Jones
CATEGORY: Industry Trends
Consumers are making a transition online when looking for insurance, making insurance analysts suggest its time companies adopt a Netflix-like approach to selling coverage. However, Elmira-based broker Tim Waters says while the transition is underway, some customers still value a traditional approach.
“This isn’t a product that should be bought from a computer,” said Waters, executive vice president of Programmed Insurance Brokers Inc.
General insurance companies are increasingly taking a direct approach through online business, which will see the broker network further shut out from the market. Waters says there is still doubt over whether consumers fully understand what they are buying when getting their insurance online, especially in terms of what their coverage offers.
Waters points to the example of a 25-year-old who has purchased a home and is looking for home insurance online.
“He knows [home insurance] is going to cost $1,000 [a year] and will cost another $200 for overland water, but he doesn’t know what overland water is,” Waters said. “So he doesn’t buy that, and then he suffers a major loss. For $200 he could have gotten that coverage if it was explained to him properly.”
Highlighting why brokers may still be valuable in the online insurance age, Waters says a broker could provide information on what overland water protection is.
“Computer programs don’t make informed decisions,” said Waters.
“The way it’s been presented to us is that they are looking for the portion of the market that weren’t going to buy through brokers anyway,” Waters said. “I am being told a certain percentage of people will buy online no matter what.”