Local Auto Insurance Agents Losing Ground To Online Demand

Tuesday’s Post 1/10/12 –  Technology is forcing all industries to change the way they do business.  Both Auto Insurance Agents/Brokers and Auto Insurance Companies have not escaped this trend. Car Insurance Customers are now using their Smart Phones to request quotes and information and even purchasing direct car insurance coverage using Internet and their Cellular Phone.  A new report outlines these changes and the auto insurance industry’s need to respond by changing their marketing plans.   A growing number of drivers are using their phones and the Internet to shop for everything, including car insurance policies. Gone are the days when customers felt the need to walk  into a physical location to purchase insurance coverage for their car or truck. The ease of  Cell Phone and online purchasing has created a huge gap between the 21st Century Insurance Agency like InsureDirect.com and the traditional Main Street Insurance Office like State Farm.  Bottom Line; there has been a sea change from physical locations and a preference to buy everything online. The landscape began to change in the mid 90’s and has hit a record high in the last year. Over half of drivers would rather buy their insurance over the phone or online, according to research by J.D. Power. Although their were plenty of clues the industry would change; nearly every insurance agency in the country refused to change with the times. In 1995, I saw the writing on the wall and reserved www.cheap-auto-insurance.com. We started marketing cheap car insurance rates and quotes both through the internet and the telephone throughout the State of Pennsylvania. In 1998 we acquired www.insuredirect.com and started marketing nationally.

There have been both Discount Auto Insurance Companies and Budget Auto Insurance Agencies whom have become front runners in the campaign to capture online business – Esurance, Progressive, and GEICO were the leaders in online quoting proceedings, quoting as much as 70 percent of business through online outlets in the year 2010. Insurance.com, CarInsurance.com and InsureDirect.com are Auto Insurance Agency/Brokers which have been leaders in the national agency space representing as many as 30 car insurance companies and marketing online and the telephone.  Consumers accustomed to the use of the internet for all their shopping needs are much less likely to shop at a physical location, especially since information is readily available no further away than your pocket.  Other surveys point to this preference for online shopping. One in five people surveyed said that they bought their policy on the Internet. This is a five percent increase over numbers seen last year. Overall, the use of  local agents for purchasing auto insurance is decreasing. The numbers for brick-and-mortal car insurance policy purchases of coverage slumped to sixty percent.


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602