We are a connected society. Most people in the United States and Canada are online, accessing more information and services than ever.
A recent LIMRA study examined how the Internet has influenced the way consumers gather information on individual insurance and annuities and how it has impacted the way individual products are bought and sold.
LIMRA found that insurance professionals are the most used information sources: 78 percent of consumers in Canada and 69 percent of those in the United States turn to insurance professionals for information (Table 1). The Internet is the second most common source, used by 61 percent of consumers in both countries who sought information from any source within the prior 24 months. These top two sources are often used in different ways and with different goals in mind.
Use of online sources has increased in both countries, growing from only 23 percent in 2003 to 61 percent in 2012 for online consumers in Canada. In the U.S., use of online sources increased from 38 percent in 2006 to 61 percent in 2012. Clearly, the Internet is growing as an information source. Recent information seekers (44 percent in the United States and 48 percent in Canada) very often used both insurance professionals and online sources.
Patterns of information seeking vary among those using both of these sources. Some consumers go online both before and after meeting with insurance professionals; others go online only to locate an agent or company contact information. Still other consumers prefer to educate themselves prior to meeting with insurance professionals so that they know what questions to ask.
Despite the growing reliance on the Internet for information, consumers value information from insurance professionals the most. In the survey, consumers also rated information from insurance professionals highest in influence and satisfaction. Overall, the largest percentage of consumers rate insurance professionals as their single most valuable source of information (37 percent in the United States and 40 percent in Canada) in comparison with online sources, which came in second place as the “one most valuable source” (25 percent in the United States and 27 percent in Canada).
The Who and The What
As expected, Gen Y consumers in the United States and Canada are significantly more likely to look online for information than do older consumers. By comparison, men are significantly more likely to look online for information than are women.
LIMRA’s study found that almost 60 percent of consumers who seek information online look for product information from specific companies. Roughly 1 in 2 look for prices, and more than 1 in 4 use online calculators and worksheets.
Most consumers locate their agents, brokers or advisors through offline sources. Gen Y consumers use agent locators significantly more often than older seekers, making this is a good way to connect with this generation.
Financial Professionals Are Still Considered Valuable
Although the Internet is a popular and easy-to-access information source, many consumers prefer to meet with insurance professionals (often their personal agents) and ask questions and skip online information sources. These consumers want to be able to ask questions, have their needs analyzed, and build a relationship with someone who will help them with their future needs and be there for future service and potential claims.
As technology matures and more people become accustomed to videoconferencing, some may be more willing to use this communication option for at least one sales meeting, enabling insurance professionals and prospects to save time. Technology is changing the way consumers identify needs and gather information, even if they do not want to search online.
What will the future bring? Gen Yers are most likely to rate online sources as their single most valuable information source, to seek online recommendations for companies, and to use agent locators relative to older consumers. When Gen Yers are in their 20s and have simpler needs, online sources may be sufficient. However, many of them look for recommendations on- and offline. Insurance professionals need to have an online presence and they may be able to reach out to online consumers (and especially Gen Y consumers) through carriers’ agent locators, personal websites, social media and educational blogs.
Insurance professionals should consider the Internet their business partner and use it to reach out to current and fu-ture customers in new ways.