Consumer behavior has changed drastically, according to Capgemini and Efma’s World Insurance Report. The new “millennial mindset” has become the norm and more consumers are trusting their own findings when it comes to researching insurance policies and actually making the purchase – all online. The report categorizes insurance customers into four different groups – pioneer, inquisitive, experimental, and follower. These groupings are based on social behaviors and shopping preferences and found that today’s consumers do not rely on one channel when deciding on insurance, rather they do their own research using multiple different mediums and sites. Reviews, testimonials from trusted peers, along with broker/agent advice all go into the decision-making process for individual consumers. However, many don’t consider the effects consumer behavior has on agents and brokers.
Effects of Consumer Behavior
Changes in consumer behavior also affect their mindsets, which has a significant impact on the insurance industry. In the past, insurers have maintained two categories for consumers: digital and conventional — face-to-face or voice-to-voice interaction with an agent or broker. According to the 2020 report, this may have been the case at one time or another but it is no longer so. Seth Rachlin of Capgemini informed the industry that the “fundamental message is that the two markets have become one. We are all digital.” He continues to explain that, although many sales are still made with an agent or broker, these sales still come about from research they had already completed on their own time. In fact, in most cases consumers simply end up with an agent through their research, they normally don’t seek them out. Further, the agents now need to be prepared to deal with the information their new client has already gathered. This means that insurance agents (as well as brokers) need to expect their clients to approach them with their own research. Similarly, agents should familiarize themselves with the latest insurance technology, including data scanning and prefill tools, in order for them to hold informed meetings with clients. Lastly, they need to ensure they are maintaining their digital storefronts to keep themselves connected.
The Future of Insurance Sales
Rachlin believes that insurance agents need to make themselves more available to people who need to ensure both personal and commercial assets at the same time. Insuring a car on your own is much easier than insuring a car and a business venture, so this is where agents will become more sought after. When looking for more than one coverage, agents have greater value because without knowing exactly what they’re looking for it is seemingly impossible for consumers to find the right coverage on their own. Agents and brokers have gone from “servicers of business” to strictly advisors, they are there as consumers really need them but they are no longer in charge of the minor details.