More Americans seek auto coverage via Internet

Americans automobile insurance habits are changing, with more adults willing to purchase policies over the phone, Internet or via mail, according to a recent study by Vertis Communications. But that doesn’t mean insurance sales by independent agents are tapering off.

In the Baltimore-based company’s “2007 Customer Focus Insurance study,” more than 40 percent of U.S. adults surveyed indicated they would purchase coverage using one of the nontraditional methods without first consulting an agent. That figure is 20 percent higher than the number of adults who said they would purchase via phone, Internet or mail in the company’s 2003 study. In particular, adults ages 35 to 49 in 2007 were 15 percent more likely than their counterparts in 2003 to make a direct auto insurance purchase without seeing an agent, up from 30 percent in 2003 to 45 percent in 2007, Vertis Communications indicated.

“Today’s consumers, particularly Generations X and Y, have become accustomed to accessing information through various media, and it is no surprise that the insurance industry has turned to new methods for selling their services to a wide range of consumers,” said Jim Litwin, vice president of marketing insights. “However, it is important to note that it is the combination of these response system services and not just one [distribution] method that will be most effective. For example, insurance companies could provide information via direct mail, but offer a phone number or Web site for consumers to respond.”

Furthermore, the study indicated that an insurance company possessing a knowledgeable agent or representative continues to be the most important insurance service to 27 percent of all adults in 2007, up 2 percent from 2003.

Meanwhile, the number of adults considering purchasing identity theft insurance grew to 17 percent in 2007, compared to 12 percent in 2003. Most other types of specialty insurance purchases — including long-term care, mortgage, critical illness, high face-value life, juvenile and accident products — declined or remained constant since 2003, the study reported. Surprisingly, the number of middle-aged adults ages 50 to 64 considering purchasing hospital/surgical benefits decreased from 28 percent in 2003 to 21 percent in 2007, the report noted.

Other facts uncovered in the study:

•Of all groups surveyed, middle-aged men ages 50 to 64, and young men ages 18 to 24 are most likely to read direct mail offerings from insurance companies in 2007. For women, direct mail pieces offering insurance services are most popular among those ages 35 to 64. Fifteen percent said they would read this type of mail. Men ages 25 to 34 and women ages 64 and older were the least likely age group to read insurance direct mail pieces.

•For young adults ages 18 to 24, having 24-7 access to an insurance company is the most critical service, which has increased to 29 percent in 2007 from 23 percent in 2003. The value of line access to an insurance company has risen most dramatically over the years among adults ages 25 to 34, from 2 percent in 2003 to 9 percent in 2007, the study noted.

In looking at the Hispanic population living in the United States, the survey noted that Hispanics feel accessibility to an insurance company is the most important service one can provide, with 37 percent considering this a key factor in 2007, compared to 27 percent of non-Hispanic adults. Conversely, non-Hispanic adults place more value on prompt insurance claims payments than Hispanic adults, with 19 percent of non-Hispanics valuing prompt claims payments versus 10 percent of Hispanic adults.

The 2007 study also noted 33 percent of Hispanic adults surveyed indicated they would consider purchasing life insurance, compared to 25 percent of non-Hispanic adults. Hispanics also were more likely to consider purchasing mortgage insurance, with 24 percent noting a possible purchase compared to 18 percent of non-Hispanics considering the same.

Vertis Communications’ Customer Focus study is an annual study tracking consumer behavior patterns, consumer practices and motivations. A variety of segments are tracked, including financial, credit cards, insurance, publishing, casino gaming, retail, automotive and media. For more information on the study, visit www.vertisinc.com.