Ringing the changes

The popularity of the internet as a means of researching and obtaining insurance policies has seen the sale of motor cover alter. Jane Bernstein wonders how this will impact on telephone advisers

Motor insurance sales are changing as more customers turn to the internet for information and quotes. But while people are certainly going online for research, are they completing the transaction over the internet?

And if a significant proportion of sales are now completed online, what impact will this have on the need for telephone advisers?

Online car insurers should be receiving a significant number of visitors to their websites. Recent research by Forrester states: "A critical mass of UK consumers - more than a third of online UK consumers, twice the European average - researches car policies online."

Furthermore, research from eBenchmarkers published in October 2003 shows that the online insurance sector is experiencing rapid growth. However, its earlier study in April of last year found that 42% of all online-originated insurance applications are still completed using the phone. Stephen Adler, joint managing director of eBenchmarkers comments: "Insurers have been advertising the fact that shopping online for insurance is cheaper and so consumers are using the internet to source quotations. But many still prefer a human voice to feel certain they have completed the transaction. Our view is that this is because some insurers still have processes too long or confusing for consumers to feel confident about the channel."

Nevertheless, Benjamin Ensor, an analyst with Forrester, claims that increasing numbers of motor customers are choosing to complete their purchase online - and the experience of many insurers and intermediaries seems to bear this out. According to Paul Cheall, managing director of online intermediary its4me, 80% of the firm's customers are buying motor insurance online without recourse to an adviser. Norwich Union has also seen a significant growth in the number of policies bought online, according to head of e-commerce Steve Genders.

Richard Coombe, head of e-commerce with Direct Line, explains that the trend in the past was to research online but complete over the phone.

He adds that there is still some evidence of this behaviour, but that it is disappearing.

Cornhill Direct's online home and motor site is specifically targeting the over-50s market. Direct marketing manager Mike Hayward says that for this age group: "Our experience is that a good 70% of people want to speak to someone." However, he believes that even this section of the market will graduate towards more online purchases: "It will slowly change as more internet-savvy people move into that age group."

According to eBenchmarkers' research, speed of process is a significant factor in converting quotations into completed transactions. It has found that the average conversion rate into sales for online insurers with the shortest processes is 31% higher than those with the longest processes.

However, some are cynical about these findings. Mr Cheall asserts that it is important to be thorough in the questions posed and that customers understand this. Mr Coombe agrees: "Speed is a factor, but it is not the be-all and end-all. If you have a really helpful, easy-to-use site that has two or three more screens than your competitors, then you are unlikely to come off any the worse."

Despite signs that online motor policy completions are on the increase, it is not all bad news for the telephone operator and most agree that the role will not disappear. As Churchill's managing director Mike Quinton comments: "There will always be a need for customer interaction - especially for non-standard quotes." Mr Quinton asserts that the role of the call handler is not changing, but others believe that it will have to adapt.

Mr Cheall says the role is "evolving from out and out selling and quoting to help and assistance", adding that for many, this proves more rewarding.

Mr Ensor agrees: "Firms across the financial services sector are really trying to move call centre staff away from handling routine enquiries to more valuable interactions." Mr Hayward points out that it is becoming important to employ call handlers with experience extending further than insurance - for example, encompassing some web knowledge so they can help customers with site or browser problems.

There are still cases the internet cannot handle alone - a customer with a previous motoring conviction, for instance, would need to go offline in order to complete their motor insurance purchase. Mr Coombe explains: "A small percentage of our sales begin online and finish over the phone, but largely because we direct them to do so - and often for underwriting reasons." Mr Hayward adds that, from the insurer's point of view, it is also easier to cross-sell or to provide add-ons where customers are speaking to a real person.

There is no doubt that the current generation of internet user is increasingly comfortable in buying products online as many former constraints, such as security concerns, subside. However motor insurers still require real people at the end of a phone - whether it is to handle those that do not fit the online profile, or to act in a purely customer service capacity.

The role of the telephone operator may be changing in the motor insurance sector, but it is not about to disappear.


- One in six internet users has researched car insurance online - it is by far the most popular financial product on the web.

- The UK is the clear leader - 31% of UK internet users research car policies online. France trails far behind this, with only 8% of its net-savvy adults researching motor policies online.

Source: Forrester.


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