Tuesday, April 23rd, 2013 - Roy Morgan Research

Business and commercial insurance brokers are under threat from the use of online channels to purchase new policies or to switch existing policies, according to Roy Morgan Research’s Business Single Source in March 2013. 

Business and commercial insurance brokers are under threat from the use of online channels to purchase new policies or to switch existing policies, according to Roy Morgan Research’s Business Single Source in March 2013.

While the use of insurance brokers in general has only declined marginally over the last 18 months, in industries that are more likely to use online channels to purchase insurance products, such as Construction and Professional Services, the use of brokers has been in steady decline. In industries that are much less inclined to purchase online, particularly Agriculture, brokers are by far the preferred method for obtaining new insurance products.

Source:Roy Morgan Research Business Survey, April 2012 – March 2013, Businesses with new or switched insurance products. Sample, n = 1,894, Agriculture n=113, Retail Trade n=225, Construction n=224, Professional Services n=246. Question 1: "How did you obtain the <insurance> policy?" (Insurance brokers)

Question 2: "Which method did you use to purchase the <insurance> policy?" (Company website)

Nigel Smith, Director of Business Research, Roy Morgan Research, says:

“The traditional business model of insurance brokers, built upon personal relationships and customisation of insurance coverage to the needs of particular businesses, appears to be in decline in industries that are more likely to use the Internet to make insurance purchases.

“This suggests that where businesses are able to treat insurance as a commodity, through online price comparisons, they are happy to do so. Insurance brokers will need to adapt to this changing market reality if they are to remain the dominant source of business and commercial insurance products into the future.”

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Business insurance brokers, online channels

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