Survey Finds Insurers Are Internet Shy

Share this content:
Insurance companies are well behind banks, brokerages and other financial services in using the Internet to sell their products, according to a survey released last week by Booz-Allen & Hamilton, New York.

Only a few of the larger insurance companies, such as Fidelity and GEICO, are making online offerings, according to results of the study.

While more companies believe the Internet to be part of their corporate strategy, the majority spend less than $500,000 per year on Web capabilities. Most of this money is spent on marketing and customer service rather than on Internet sales.

More than 60 percent of the companies surveyed said they do not plan to sell insurance on the Web in the next two years and 67 percent said they would never sell annuity online.

Channel conflict is the reason why many insurance companies are reluctant to go online, said Gil Irwin, partner at Booz-Allen & Hamilton.

"Agents in the insurance industry are powerful. Companies fear that disenfranchising them by using the Internet will act as a disincentive, encouraging them to move to other companies," he said.

The insurance agency is plagued by old systems, some of which are more than 30 years old. To adapt these to the Internet is expensive and provides little short-term gain.

"At the moment, a customer service agent can pull up more than five systems on a screen. It is costly to develop an Internet capability to match this. The consumer doesn't want half the story, so it's a case of putting all or nothing on the Internet," he said.

The complexities of some policies and regulations also are holding insurance companies back.

But the potential for selling insurance on the Internet is huge, said Irwin. "To ignore this sector means companies will be walking away from what is a growing chunk of business."

Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above