Consumers More Willing to Buy Insurance via Direct Channels

For the most part, when it comes to purchasing insurance plans, consumers have failed to embrace direct channels, relying instead on insurance agents; however a new Vertis study suggests that some consumer audiences are now more willing to use direct mail, the Internet or telephone to initiate their policies.

Of the 2,000 consumers surveyed, Vertis found that GenXers (28-39 year olds) as well as GenYers (18-27 year olds) are more willing than the average adult to buy various types of insurance via direct channels (without seeing an insurance agent).

Specifically, GenXers are 10 percent more likely than the average adult to purchase Life Insurance (56% vs. 46%) and seven percent more likely to purchase Dental Insurance (50% vs. 43%) through the Web, phone or direct mail (rather than through an insurance agent). Similarly, GenYers are seven percent more likely than the average adult to directly purchase Health Insurance (52% vs. 45%) and eight percent more likely to directly purchase Dental Insurance (51% vs. 43%).

Suggesting the growing importance of the online channel, Vertis found that, in the next 12 months, four percent more GenXers than the average adult plan to get a price quote for life insurance on the Internet. However, when asked to rank the most important service provided by an insurance company, only three percent of adults cited "online accessibility."

Turning to direct mail, Vertis found that 26 percent of adults with household incomes of $50,000 to $75,000 said that they read insurance direct mail last year, reflecting an 11 percent increase from adults surveyed in 2002.

When asked what prompted them to open insurance direct mail, consumers most often cited a personalized outer envelope (70 percent), followed by timing of the piece/need for the service (58 percent), an interesting looking package (53 percent), a package that conveys a sense of importance (53 percent), a special offer or discount (51 percent), dated material enclosed (41 percent), and a free gift or token inside (38 percent).

Additional findings include:

• When asked about other types of insurance, 20 percent of GenXers said they would consider purchasing High Face Life Insurance (five percent more than the average adult), 33 percent said they would consider Mortgage Insurance (10 percent more than the average adult), 17 percent would consider Identity Theft Insurance (five percent more than the average adult) and 15 percent would consider Juvenile Whole Life Insurance (six percent more than the average adult);

• When asked about other types of insurance, 44 percent of GenYers said they would consider purchasing Long Term Insurance (13 percent more than the average adult), 46 percent would consider Hospital Insurance (16 percent more than the average adult) and 14 percent would consider insurance for their pets (seven percent more than the average adult);

• Among consumers with household incomes of $75,000 or higher, 35 percent say that a knowledgeable agent is the most important service provided by an insurance company. Other services cited as "most important" include: 24-hour accessibility (20 percent), prompt claim payments (19 percent) and courteous customer service (16 percent); and

• 32 percent of GenYers and 28 percent of adults with annual household incomes between $50,000 and $75,000 say that they would consider using financial products or services from an insurance company.

To view more findings from Vertis' "Customer Focus 2004: Insurance" study, visit www.vertisinc.com/about/viewNews.asp?id=123.

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