60% of Direct Buyers Eventually Return to Independent Agents: Study

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Most customers who are lured away from independent agents by direct insurers promising lower prices will ultimately return to an independent agent.

According to a recent study commissioned by The Hanover Insurance Group, nearly 60 percent of consumers who had purchased insurance through a direct channel 10 or more years ago reported switching back to an independent agent because they wanted more value.

This study was conducted for Hanover, an independent agency company, by the research firm InsightExpress, which surveyded 1,000 consumers who purchased insurance through direct channels 10 or more years ago.

Most consumers who switched back to independent agents cited expertise and convenience for their decision. According to the survey, the motivators for consumers who switched to work with independent agents also included the benefits of having one point of contact to handle insurance needs and questions and having the guidance of an experienced personal insurance professional.

“This research demonstrates that consumers really value the advice provided by independent agents and the personal relationships they build with their customers,” said Mark R. Desrochers, president, personal lines insurance at The Hanover. “The majority of respondents said their number one reason for switching from a direct insurance provider was to have someone to guide them through their insurance buying decisions. Clearly trust and expertise are important to consumers.”

“The study shows that consumers realize the value that independent agents bring. That’s why we deliver our products exclusively through agents who are ‘the value creating channel,’” said Dick Lavey, president of field operations and chief marketing officer at The Hanover.

The Hanover Insurance Group Inc. is based in Worcester, Mass.

 Source: Hanover Insurance Group

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  • August 12, 2013 at 5:57 pm
    Joe Jimeneaz says:

    It doesn’t matter how many millions of dollars GEICO or other direct writers spend in advertising. They will never be able to replace the relationships we have with our clients. A handshake, a hug or simply just sitting across our desk while discussing their insurance needs. That’s the value independent agents provide that GEICO cannot buy.

  • August 12, 2013 at 5:58 pm
    Terry says:

    An interesting read. 60% sounds good, but that is still 40% we are permanently losing. An aspect not discussed here…what percentage of consumers initially purchased direct made the decision to switch to an independent agency company? Independent agency companies may be losing people quicker than they are gaining.

  • August 14, 2013 at 4:12 am
    Renoscs says:

    Makes nothing but perfect sense!!

  • August 14, 2013 at 7:38 pm
    Scott says:

    Perhaps the Big I, et al should run countering TV ads stating this; maybe we’d get more of the 40% back.

  • August 20, 2013 at 8:53 pm
    Peter says:

    Yeah, and 98% of all statistics from such a biased source are made up on the spot. If there really was that much “churn” the direct writers would not be growing at the rate they are!

  • August 21, 2013 at 12:07 pm
    Grant says:

    It makes a lot of sense,I personally know some clients,who would want to deal with the same independent agent regardless of which insurance company he or she is representing,this is all as result of the relationship and trust built capled with professional rendered.

  • August 30, 2013 at 6:49 pm
    Lee says:

    The top 10 carriers are replacing business daily with multi-millions spent in advertising, independent agents need to make their value know through such advertising,seeing is believing right or wrong, some of these direct writers have ads running continually TV, radio, the web..etc..independents must do the same to bring spread the word of value to consumers..its a internet, gadget world lets play ball!

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