// . //  Insights //  Is Digital Insurance Purchasing Here To Stay In The US?

The recent changes brought on by the pandemic have affected all parts of society and business. The insurance sector has been no exception. Many have predicted a step-change in online insurance purchasing driven by COVID-related consumer behavior changes that will outlast the crisis. Oliver Wyman has conducted several studies on this topic over the last year and found that consumers have indeed become more comfortable shopping for insurance online, increasing digital channel adoption by as much as 10%, specifically for property and casualty (P&C) personal line products. However, most of these changes were observed at the top end of the customer purchasing funnel, for example, when customers are gathering information on coverage and different providers. As consumers move closer to ‘binding’ an insurance policy, many default back to traditional advice-based channels and seek referral (or are automatically referred to) brokers and call center representatives that can assist them in finalizing the purchase.

Our consumer research findings should bode well for traditional agents, both captive and independent, who are placing personal lines and small business insurance. However, in a recent survey of more than 250 P&C brokers, we learned that 50% of them expect that the COVID-related changes to distribution are permanent. Of this group, one-third expect these changes to be harmful to traditional agents, compared to 25% who believe changes are here to stay but will actually benefit traditional brokers. We conclude that, on the margin, brokers are worried about additional distribution volume shifting online and how this will impact brokers’ position in the value chain.

While we believe that these concerns are warranted, we expect that brokers will continue to play an important role in personal lines and small commercial lines distribution. A large share of consumers still wants to be ‘sold’ to and values advice throughout the purchasing process. Nonetheless, brokers need to understand consumer behavior changes and how they can continue to deliver their services. We have identified three key strategic levers for distributors to do so. First, develop a digital customer acquisition strategy, balancing lead sources from search engine optimization (SEO) campaigns, aggregators, and traditional referral or advertising channels. Next, drive efficiencies in how brokers onboard and service customer relationships, including workflow solutions to facilitate data entry and solid claims support. Last, distributors can increase transparency and tracking at all stages of the customer relationship to ensure that new and existing clients meet quality requirements set by downstream carrier partners.

Brokers are here to stay post-COVID, but they will have to digitize quickly to remain relevant in a fast-changing market environment.