Youth still prefer to buy insurance from real people, but interest in online purchase is growing: Accenture study

A recent Accenture survey of Canadian and U.S. consumers shows people prefer to buy insurance from an agent, but an increasing number of people in the 25- to 34-year-old age bracket are planning to buy insurance products online.
Nearly two-thirds (64%) of U.S. and Canadian consumers are planning to renew or purchase insurance products through an agent in the next 12 months, according to the survey of 2,500 consumers in both countries by Accenture (NYSE: ACN).
The survey defines “agents” as exclusive insurance agents, and thus independent brokers/agents do not fall under this category. The 2,502 respondents included 2,001 from the U.S. and 501 from Canada.
Younger consumers predominantly favor agent networks, the survey showed, with 59% of 25- to 34-year-olds saying they preferred to buy insurance through this channel. At the same time, about one-third (31%) of the survey respondents in this age category said they planned to purchase online in the next 12 months.
The survey found the use of social media to perform research on insurance products is in its early stages, with 21% of respondents using or considering using social media for such purposes.
Younger respondents demonstrated much greater interest in the use of social media. More than a third (36%) of respondents under 34 said they would consider using social media to perform such research, the survey found.
“With the rise of Internet usage, new purchasing behaviors have emerged that insurers cannot ignore,” said Erik Sandquist, a senior executive in Accenture’s insurance practice. “Before buying, more and more consumers perform their own research online, compare options and seek recommendations from others, using social media sites or referral sources.
“This is very common in sectors like travel and electronics, but our survey demonstrates that insurers should expect similar purchasing behaviors from their customer.”
According to the survey, the top criteria for consumers in choosing an insurance provider are speed of problem resolution and the their ability to offer insurance products and services that meet their needs, with 68% and 67% saying this is very important, respectively. Competitive prices and price transparency were also near the top of the list, at 65% and 63% respectively.
Also, consumers appear to show an interest in price and price transparency.
For example, the Accenture survey found more than half of respondents (55%) said they would be interested in using insurance aggregators – Web sites that compare quotes between different insurance companies. The proportion is even higher for younger consumers: 75% of 25- to 34-year-old respondents expressed an interest in doing so.