Speaking of comparative rating….
I was just reading an Insurance Journal article about Compare.com where the CEO referred to the semi-startup as a “disrupter.” Disrupting what? Independent agents have been doing comparative rating for decades. There is nothing new or disruptive about doing it online. And, in either format, it’s a dangerous thing.
Compare.com’s CEO says that what consumers want is choice:
“If you come back to that as the fundamental premise, do you want to walk into your grocery store and be offered one option for soup? Do you want one option for fruit? No, you want lots of options. Do you want a simple way to shop for it? That’s what compare.com does.”
For the nth time, “insurance” is not a product you buy off a store shelf. Why do these people keep making comparisons to consumer products? I guess the upside is that at least he didn’t throw Amazon into the mix, as I wrote about in the blog post “Insurance and Paper Towels.”
And what “choice” does comparative rating provide to consumers? Would this premise work for buying, say, used cars? Let’s see what choices UsedCarComparison.com would give us:
Ford $4,167
Chevy $8,246
Honda $8,963
Toyota $5,920
Kia $6,743
Need a boat? Just go to BoatComparison.com:
Bayliner $48,450
Crest $27,248
Chapparal $51,506
Regal $86,727
Bennington $34,999
Easy choices. I’ll buy that Ford and use it to tow my new Crest boat. After all, the only thing I need to know is the manufacturer and the price, right? Similarly, in the case of insurance comparative rating, all I need is the name of the “manufacturer” (aka insurance company) and the price (i.e., premium), correct?
Needless to say, NOBODY would buy a car or a boat with only the information provided above. Then why should consumers be expected to buy insurance sold that way? The answer to that question is easy…because we’ve conditioned them to believe that the only thing that matters is price. Any true insurance professional knows that, but apparently few insurance professionals make decisions for insurers when it comes to advertising.
Even in independent agencies, we are all too eager to simply plug some information into a comparative rating system, then tell the consumer which quote is the lowest, without any regard for which carrier, product and service is the best fit for their unique needs. If this practice continues, we might as well concede the industry to the startups (and entrenched carriers) that sell on price and/or convenience, as opposed to providing a real, professional service that helps consumers avoid catastrophic loss.
Photo by George Appiah 
Bill Wilson
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Bill is showing that he ahs a generational gap in utilizing datat and teh Onternet. For the vehicles the buyer decides what he wants and the features. Thefeatures. n he compares models and prices with similar features. For the boat he does the same. The price is simply the last step in teh analysis. When the comparative rating mechanisms include this true disruption will begin. Insured Mind Inc appears to be pioneering this approach. If people can buy everything else using this process the future of insurance sales belongs to those that do the same there. Like the Abacus the ledger of extension awaits all others.
Respectfully Charles, I don’t think this matter has anything to do with generation gaps or discomfort with the internet. I believe that Bill’s fundamental point (with which I agree) is that insurance is not a consumer product and cannot/should not be sold as such. I’m still waiting for the comparison shopping site/industry disrupter for brain surgeons and tax accountants.
By the way, who/what is “Insured Mind Inc”?