Technology

Insurance Via Internet Is Squeezing Agents

Walmart and Google have recently established websites that allow consumers to compare the premiums of various companies for auto, home and other types of insurance, and buy policies.  Both companies have entered partnerships with insurers. (Courtesy of New York Times)
Walmart and Google have recently established websites that allow consumers to compare the premiums of various companies for auto, home and other types of insurance, and buy policies. Both companies have entered partnerships with insurers. (Courtesy of New York Times)

(New York Times) – To the list of jobs threatened by the Internet, add one more: insurance agent.

Technology start-ups, and companies from the insurance industry, are introducing websites that sell or promote a range of insurance including auto, homeowners and small commercial policies. These portals, which promise savings by showing consumers many price quotes so they do not have to shop site by site, are putting pressure on insurance agents, who collect 10 percent or more of their policyholders’ payments.

Online insurance comparison is still a nascent business, and it has yet to make a dent in the armies of intermediaries that are the backbone of the trade. But people in the industry and Silicon Valley say it is only a matter of time. Even Google is getting involved.

“There are 40,000 agencies in the U.S., and you could absolutely imagine them shrinking by a quarter, and the ones that are left will deal with more complicated needs and more affluent customers,” said Ellen Carney, an analyst who covers insurance for Forrester Research.

The idea of selling insurance online is not new. Lately, though, the boring but lucrative trade has been attracting big names. The most recent is Google.

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