These days we can go online and order a salad from Panera and have it delivered to our home or place of business within 30 minutes. Local pharmacies deliver our prescription medication, and Walmart delivers fresh groceries mere hours after we place the order online. Stocks and bonds are traded online, and even car registration can now be renewed online. The demand for online business has never been higher, as customers crave the ability to peruse information at their leisure, read reviews, and cross-check information. One area, however, has managed to stay out of the ecommerce marketplace: insurance. Sure, there have been signs from time to time that the industry was moving in that direction, but online insurance has yet to become as feasible as online shopping (or banking).
Major ecommerce retailers have made moves towards ecommerce insurance, but none have taken off. Google, in March 2015, launched their first attempt at launching their own Insurance Ecommerce company called Compare. Google Compare was their attempt at breaking into the insurance marketplace. Users would enter their information, then get a variety of different quotes from different companies. Ultimately this experiment only lasted a single year, shuttering in March of 2016. While their initial foray into insurance didn’t provide the results they wanted, they weren’t defeated. Last year Google’s sister company Verily made waves when they started taking steps to infiltrate the American health care system.
Amazon has also taken significant steps to launch its own insurance program. In 2018 Amazon invested in a company in India who sells insurance online. It’s widely believed that this is just a testing vehicle for Amazon before introducing it in other countries. It should be noted that one of the major competitors for Amazon in the Indian ecommerce marketplace is Walmart’s own partnership Flipkart. In addition to health insurance, Amazon has been rumored to be interested in home insurance, and reportedly was considering offering vehicle insurance in the UK last year.
Walmart has also taken a stab at insurance ecommerce. As previously mentioned, they are experimenting with their online insurance ecommerce in India with Flipkart. However, this isn’t the first time Walmart has dabbled in insurance. In 2014 Walmart was reported to have created a partnership with an online insurance retailer, directing online customers to their partner’s site. They also experimented with offering health insurance, and even in-store kiosks. However, it’s important to note that their website no longer supports evidence of this.
Independent insurance agencies have just now adapted to the digital world, with agencies like ours being able to reach the customer’s through digital channels and supply them coverage through web-based channels. We’ve gotten used to using website templates to easily put together a website without programming knowledge and use digital marketing tactics to our advantage. However, with the rise of ecommerce platforms that offer a similar simplicity with ecommerce website templates that make it easy to set up a store, the future may belong to the agencies that adapt to the rise in eCommerce sooner rather than later.
However, they will experience harsh competition as Silicon Valley has taken notice in this trend.
Insurance Startups on the Rise
While the major players in ecommerce have definitely started dabbling, they aren’t the only ones looking for a piece of the insurance ecommerce pie. Insurance ecommerce startups are trying to grab their piece of the pie.
- Root Insurance is a startup vehicle insurance company that started in 2016. Only currently available in 20 states, they claim low insurance costs, but sacrifice privacy as their app tracks customers every move prior to providing them with a quote.
- Ladder Insurance offers life insurance nationwide (excluding New York), and offers a streamlined online experience. Ladder Insurance is a newer company but boasts that most of their customers will qualify without a health exam.
- Ethos Insurance is also offered nationwide, excluding New York. They are a relatively new startup, launching in 2018. Ethos differs from Ladder because they cover their applicants to an older age.
- Policy Genius offers a wide variety of insurance, from term and whole life insurance to jewelry insurance or pet insurance, Policy Genius covers everything. They also aren’t tied to a specific company, and instead, make a commission on their sales.
Despite the influx of startups in the marketplace, there are still obstacles for traditional insurance companies to overcome. First, they’ve done business the same way for generations, so many businesses are having difficulty adapting to the new models of commerce. Second, there are regulations in place making it difficult for traditional insurance companies to break into ecommerce.
One thing we know for sure, the future of insurance is in ecommerce. Evidence has shown that millennials are more comfortable using an online platform vs. having to meet with an agent or speak with one over the phone. Additionally, more baby boomers are more comfortable using online platforms than ever before. With more millennials shopping for insurance every day, companies need to harness the power of ecommerce. Knowing this, eventually, the insurance industry’s regulations will have to give way.
The Future of Insurance is Ecommerce
While many independent life insurance agents and agencies have gotten comfortable with selling online, it seems as though the life insurance industry is about to make another shift. With ecommerce platforms growing and getting better by the day, starting an online store is easier than ever and forward thinking agents may decide to make that leap sooner than later. The question becomes will it be too late with players like Amazon, Google and Walmart coming into the picture, not to mention Silicon Valley funding fintech and insurtech at a rapid pace. Only the future will tell, what we know now is that customers are being spoiled with instant delivery and the first insurance company that can offer that will be the ones to win the long run.
