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Good News! Consumers Still Prefer Buying Health Insurance Through Agents

by Eric Stroup, Director of National Sales / Licensed Agent

March 10, 2016

CheersWhile more and more insurance shoppers are using the internet to compare policies, when it comes time to make purchasing decisions, agents are still their number one choice.

Salespeople across countless industries have found themselves teetering on the brink of irrelevancy. Why? Because today, consumers are increasingly relying on the internet as their primary source of information for nearly every purchasing decision they make, no matter how big or small.

This has been especially true in the insurance space, where more and more people seeking coverage are now taking to the web for at least one leg of their insurance purchasing journey. Indeed, recent LIMRA research found that 71% of American consumers sought information about health insurance online, a major uptick from previous years, according to Life Health Pro

But a more interesting trend has emerged in the U.S. health insurance sales market: due to the traditional construct of the U.S. healthcare system (in which employers typically provide workers access to group insurance plans), relatively few individuals have any experience purchasing individual policies for themselves.
But with the Affordable Care Act’s recent coverage mandate, a growing number of people are buying their own insurance for the first time, which certainly helps explain the recent surge in online healthcare consumer activity online.

One might assume, then, that more traditional (i.e., personal) health insurance sales tactics might go by the wayside — however, in a somewhat surprising turn of events, the exact opposite has happened: more and more customers are turning to insurance agents to make complete their final leg of the purchasing journey.

Old School Growth

A recent poll conducted by The Henry J. Kaiser Foundation found that consumer engagement with insurance agents and brokers is currently at its highest level in years, and there seems to be even more growth on the immediate horizon, according to Life Health Pro. Of the 8% of consumers polled who purchased their own insurance policies, 38% reported that they finalized the sale through a broker or agent, up from less than 17% in February 2014.    

Along the same lines, a survey found that 63% of consumers prefer to speak to an agent on the phone or in person when the time comes to actually make a purchase, even after using the web to conduct their preliminary research and compare their options. Despite the best efforts of both the Affordable Care Act and the internet to make health insurance easier to understand without the help of a third party, it would seem that old habits die hard.

Lessons From Google Compare   

So why do people still turn to agents for help? Google Compare, the tech giant’s recently abandoned foray into the world of insurance sales and lead generation, is a prime example of this phenomenon. The idea was to leverage the massive amounts of related search terms into actionable sales leads for online auto insurance, mortgage, and credit card sales entities, but somehow the platform never came close to meeting its revenue targets.

The reason for its failure, according to Mike Becker, executive vice president and CEO of the National Association of Professional Insurance Agents, was simple: “Google has apparently discovered what independent insurance agents have always known,” he said, speaking to PropertyCasualty360. “When it comes to insurance, customers appreciate that it is a complex transaction that requires professional advice.”

Making the Most of the Internet

Given all of this information, health insurance salespeople should be ecstatic about the opportunities that these new market conditions have provided. Not only are there more potential customers searching for individual healthcare policies — they’re better informed and further along in the purchasing funnel. Now, when you get a consumer on the phone, chances are they’ve done their homework and weighed their options, meaning that conversation is far more likely to lead to an actual sale.

In order to truly capitalize on the trends at work in today’s market, Becker stresses that maintaining an online presence is a must: “Customers also want local agents as experts who are capable of online interaction concerning their accounts and are backed by the efficiency of the Internet.” This means using tools like pay-per-call campaigns and lead generation services to proactively reach out and get a new prospect’s attention, then using your personality and expertise to close the sale.

(Main image credit: Yutacar/Unsplash)

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