E-Commerce and Auto Insurance

By Edward Cammarato September 27, 2011

The majority of auto insurance shoppers now start the quoting process online, according to a recent J.D. Power study. When you’re evaluating the success of your online quoting process, the most important initial metrics are the quote completion rate — the percentage of people starting the process who actually finish it — and its converse the quote abandonment rate.

Web quoting has traditionally suffered abandonment rates as high as 40 percent. People may decide not to complete a quote because it takes too long, because there are too many questions, or because the questions are too hard to answer. (For example, auto owners often don’t know how many miles they drive in a year.) Anything that makes it easier for your customer to do business with you can help you cut your abandonment rate and boost your quote completion rate. One thing you can do to improve the ease of doing business with you is to prefill the application with data from proprietary and public sources.

Of course, you need to balance the benefits of prefilling data fields — reduced time to complete a quote, reduced abandonment rates, improved customer experience, and others — against the costs and perceived privacy issues. Some customers may find it creepy if you fill in too much personal information.

But insurers that aggressively promote and fine-tune their quoting websites are gaining competitive advantages.

Some insurers are also starting to experiment with mobile applications for quoting. That’s further evidence that carriers are continuing to invest in new technologies to serve their customers.

The trend toward more online quoting and more online buying is well established in the auto insurance business. Mobile apps will also open up new opportunities beyond just quoting, as we discussed in a recent Verisk blog, Mobile Applications for Insurance: What’s Coming.

Verisk will continue to monitor the growth of traditional e-commerce and emerging mobile insurance applications, and we’ll periodically share our observations on this site. Look for forthcoming posts on how companies are supporting the property insurance segment with new technologies.