Is the Independent Agent Doomed?

By Brent Kelly

Over 50% of People Now Shop For Insurance Online, Is the Independent Agent Doomed?

A recent article found that over 50% of people looking to obtain auto insurance quotes now go online to shop. This trend will probably continue as insurance buyers are looking for convenience and competitive pricing.  Large companies like Geico, Progressive, and Allstate are spending millions of advertising dollars to get these customers.

Does this mean the local independent agent is doomed? 

Quite the contrary in my opinion. I think this presents one of the greatest opportunities independent agents have had in a long time.  What do I mean?  Let me back up and point out a couple of things relating to that article first.

1) The article stated that 54% of consumers turn to the internet for a quote, but most still purchase through an agent or call center.

2) Customers still highly value customer service and typically will still only move to a new company if they are displeased with the current level of customer service. 

This new generation of insurance buyers may shop and purchase differently than previous generations, but the basic principles remain the same.  Ease of buying, great customer service, and a fair price are still important.

Independent agents have the opportunity to partner current technology with their competitive distribution system to give customers every advantage they want. Many agencies have been scared of detailed websites, real-time quoting, and social media because it was what the “big guys do”.  My comment is “you better grab your bat and glove to play or soon you won’t even be on the field.”  Direct writers are pushing hard to capture this market through advertising and efficient online quoting. 

Independent agents shouldn’t be scared of technology and the new buying trends, they should be embracing it. 

Let me offer up two scenarios for today’s insurance buyers.

Scenario #1) The customer visits several insurance websites and enters all their information multiple times. They really aren’t sure what coverage they are buying. They typically just use the same limits that they have on their current policy to compare.  They get a variety of basic insurance quotes from these companies. As they review the quotes they are confused trying to compare the multiple options. After doing their best to determine how to proceed, they decide to go with company A. They go back online to that company’s website to try to finalize the transaction. They have a couple of questions so they call the 800 number.  A person tries to answer some of their questions, but the customer is still not 100% satisfied so they call back the next morning.  They get a different person this time that has some slightly different answers than the person did the night before.  Finally, they just go ahead and purchase the new auto policy. They still have some questions, but it’s just auto insurance right??  Good enough.

Scenario #2) The customer contacts a professional independent insurance agent in their area.  The agent discusses their specific situation and needs and answers any initial questions they may have at that time. Using real-time quoting technology, the agent then takes their information and “shops’ the insurance to multiple companies all at one time.  The agent then reviews all of those quotes to determine what would be the best fit for that particular customer. The agent contacts the customer and discusses (phone, in person, e-mail, text, etc.) the selected quote (out of many others) with the customer explaining the coverage, pricing, etc. The customer then determines to purchase through the agent.  

The agent is available to answer any questions and service this new customer through e-mail, various social media outlets, phone, and of course can also actually sit down face to face with the customer as well.  The agent can add this new customer to their data base to provide valuable e-mail newsletters, post blogs to educate their clients, and hold online webinars on important insurance topics as well. Do you see where I am going with this?

Some customers prefer to buy online with little to no guidance. That’s ok. That’s  not the target market of independent agents anyway. 

For those customers who want friendly local service with the ability to shop multiple companies all on their behalf, we are here for you. 

Independent agents have only hit the tip of the iceberg in being able to leverage technology. The opportunity is ripe and customers who need our help are waiting.

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