Insurers are quickly transforming for the digital age with unique product offerings and accessible websites. A digital step further could be to leverage offerings in an online retail marketplace.
A retail marketplace promises better customer experience to compare and buy policies through one platform. But what does this mean for insurers?
WaterStreet Company is a leader in offering P&C insurance technology and aims to keep you up to date on the latest P&C insurance trends.
What is an Insurance Retail Marketplace?
An online retail marketplace is managed by a third-party ecommerce platform, acting as a shopping gateway for customers to select from diverse products offered by any number of companies.
For P&C insurance, this would mean the marketplace operator would allow insurers to list policies in one easily shoppable environment, and customers would have the ability to buy P&C insurance coverage directly through the marketplace.
Current retail marketplaces include AirBnB, Amazon, Wish, eBay and Etsy. Sellers are permitted to list their products with the retailer, giving users an easy experience comparing similar products and proceeding to buy them through the same platform.
Comparison Shopping vs Online Marketplace
The main difference between comparison shopping sites and an online marketplace would be the shopper’s ability to complete a purchase entirely through the online marketplace.
Comparison shopping sites, such as The Zebra for auto insurance, currently exist. Shoppers can gain multiple price quotes across insurers through one platform, and in just a few clicks with entering basic information, they are forwarded to their chosen carrier’s website to fill the rest of their application and purchase from there. This style of shopping for auto insurance makes it easy to buy insurance without talking to an agent.
In a traditional ecommerce online marketplace, such as with Amazon, shoppers compare and complete their purchases all through the same platform. These platforms can also sometimes offer prices lower than the seller’s website, encouraging users to buy through their platform rather than the retailer’s website. Customers are offered a “post-selling” fee, meaning the marketplace has obtained the product to resell and prices may differ on the marketplace compared to the seller’s main website.
Impact of Digital Insurance Agents
These insurance comparison sites function as digital insurance agents, either by aggregating price quotes or partnering with individual carriers to generate price quotes. Most comparison sites offer insurers lead generation by selling customer information to insurers as the customer gains price quotes, offering carriers and agents a means to connect with interested shoppers.
Enterprise comparative raters, such as ITC TurboRater and EZLynx, also exist for agents. Much like the same forms shoppers fill on The Zebra, agents use these comparative rater solutions to walk the shopper through the application.
For P&C insurance to be offered in an online marketplace, carriers and platform vendors must collaborate to ensure regulatory satisfaction. As shoppers become more and more in tune with choosing auto insurance online, this trend is likely to spread to homeowners insurance as well. At this time, home insurance quotes are much harder to process unless the shopper is in touch with an agent. The question remains if or when most shoppers will become fully comfortable buying P&C insurance without speaking to an expert.
Interest in blockchain technology has risen for resellers of insurance. Blockchain can assist with fraud detection through distributed ledgers, enhancing transparency behind transactions, and could be used in a P&C insurance online marketplace to further ensure trust behind each transaction.
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