Online Auto Insurance Comparison Sites Fundamentally Change the Market

  • PrintPinterestTumblrLinkedInFacebook
  • Over the past few years, the concern among drivers nationwide over rising auto insurance costs has created some cutthroat competition, and things are only likely to keep heading down that path. While it’s mostly been auto insurers themselves that have set up websites allowing customers to compare quotes from a few different companies as a means of finding the best possible price, tech companies may soon get into the game. That, in turn, could fundamentally change the job of many insurance agents, who may have to do a little bit more when it comes to keeping their old clients and simultaneously attracting new ones.

    A number of tech startups, Google, and even Wal-Mart may now be moving into the auto insurance price comparison site sector, and that’s likely to shake the industry up considerably, according to a report from New York Times. And while this fills consumers’ seemingly constant (if understandable) need to cut their costs of all kinds, it seems that current agents may end up taking a bit of a hit, at least initially.

    “There are 40,000 agencies in the U.S., and you could absolutely imagine them shrinking by a quarter, and the ones that are left will deal with more complicated needs and more affluent customers,” Ellen Carney, an analyst who covers insurance for Forrester Research, told the newspaper.

    Why now?
    For some time now, tech companies have been focused on “disrupting” a number of industries, the report said. That essentially means that they’re trying to become something of a middle man between consumers and providers of things people usually buy, with the idea being that they can cut prices. Most experts agree that the way people buy insurance – of all types – is a little antiquated and could use some revamping, and tech companies large and small see that as a huge opportunity to make some money.

    One thing that insurance agents can do that price comparison websites cannot is help to walk clients through major or even minor concerns they may have about their coverage or premiums. And in turn, that might help them to significantly boost their retention rates and even attract new clients. That’s because many polls have shown people actually value high-quality customer service, which websites usually can’t provide, over the ability to save a little bit of money on their plans overall.