The insurance industry isn’t immune to the online shopping trend. Online shopping has been increasing for years, and the pandemic accelerated this growth.
It’s not just groceries that people are buying online, either. Whether they’re shopping for cars or furniture – or, yes, insurance – modern consumers often turn to the internet. This has led to the growth of the direct-to-consumer insurance sales model. If you haven’t embraced this model yet, it’s time to start now.
A DIY Approach
Armed with search engines, modern consumers are adept at doing their own research. As a result, we’re seeing a boom in the direct-to-consumer market for everything from eyeglasses to caskets. According to Statista, the U.S. direct-to-consumer e-commerce sales market reached $111.5 billion in 2020 and is expected to exceed $129 billion in 2021.
The direct-to-consumer sales model has been booming in the insurance industry, as well. According to J.D. Power’s 2020 U.S. Insurance Shopping Study, the direct sales model has been clicking with consumers, 90% of whom say they are open to purchasing auto insurance online. Over the last decade, direct carriers took seven percentage points of the market share from agents.
The direct-to-sales model is huge – and recent events mean that’s probably not going to change in the near future.
The Pandemic Boosted Online Shopping
According to Digital Commerce 360, online retail sales increased 32.4% in 2020, going from $598.02 billion in 2019 to $791.70 billion in 2020.
These figures are focused on retails sales, but consumers are buying everything online. During the pandemic, when brick-and-mortar locations were closed, they didn’t have much of a choice. As business reopens, some people may go back to stores, but many people may stick to the speed and convenience of online shopping. Afterall, now that they have the digital tools and know-how, why go back to the old way?
You can’t put the genie back in the bottle. It looks like online shopping and direct-to-consumer sales are here to stay.
There’s Nothing to Hold You Back
J.D. Power’s 2020 U.S. Insurance Shopping Study had another interesting statistic in it: two carriers (Geico and Progressive) had captured almost 92% of premium growth.
Geico and Progressive are huge. They have the resources needed to take advantage of trends like direct-to-consumer sales. You might be thinking that you don’t.
There’s good news. You don’t have to build the infrastructure in-house before you can implement a direct-to-consumer sales model. Covenir can provide support for every step of the process, from frontline sales and underwriting to premium collection and FNOL support. Covenir can also manage all policyholder communication through the virtual mailroom and print/mail services.
When you have Covenir behind you, there’s nothing holding you back. Direct insurance buyers are already online researching their coverage options. Is your company open for D2C business?
Read this Case Study to learn how we supported one insurer’s direct-to-consumer sales efforts.