Three Direct-to-Consumer Insurance Sales Trends You Can’t Afford to Ignore


The direct-to-consumer (D2C) model has gained steam in recent years, and it shows no sign of slowing down. Consumers comparison shop for everything online – from cars to smartphones. New data reveals that they have the same shopping expectations for insurance.

Trend #1: The D2C Model Earns the Most Market Share for Past Two Years

J.D. Power’s 2019 P&C Insurance Industry Insight says the direct-to-consumer model gained traction in 2018. According to the report, “Increasingly, those insurers who get that consumer model right are the ones who will dominate the market.”

According to J.D. Power, Geico has been aggressive in its pursuit of the direct-to-consumer model. Meanwhile, Progressive has pursed both the direct-to-consumer model and the independent agent model.

The result? In 2018, Geico and Progressive captured $7.8 billion in direct written premiums, or 54 percent of the auto insurance industry’s gains. And according to J.D. Power’s 2020 U.S Insurance Shopping Study, Geico and Progressive captured almost 92 percent of the past year’s premium growth.

Trend #2: Carrier Websites Are Starting to Outperform

Other insurers seem to be taking notice of the direct-to-consumer trend. AM Best found that insurers considered direct-to-consumer marketing to be the most attractive area of opportunity in 2019.

And 2020 seems to have proven them right. J.D. Power’s 2020 U.S. Auto Insurance Study just revealed that insurance company websites have officially surpassed agents’ websites, when rated on interaction satisfaction. This is the first time this has happened in the study’s 21-year history, and it shows how important digital tools have become. 

Digital tools are becoming key in every step of the insurance process, including the initial purchase. In fact, J.D. Power’s 2020 U.S. Insurance Shopping Study found that 90 percent of consumers are open to online auto insurance purchases. And now, current events are making this option even more attractive. 

Trend #3: COVID Has Accelerated the Need for a D2C Option

In the past, online purchasing was a nice option. Now, as COVID-19 forces people to spend more time at home, online options are more necessity than convenience.

States have been loosening their stay-at-home restrictions, but with fears of a second wave, more restrictions may be coming, and many people would rather stay home than risk exposure.

Fortunately, people still want to shop. According to Digital Commerce 360, Signifyd Inc. says that ecommerce sales were 40 percent higher in the week of May 26 to June 1 compared to the week of February 24 to March 1, which is considered the pre-pandemic benchmark.

Lessons Learned about Direct Selling

So far, 2020 has been an interesting year. The pandemic forced many companies to change the way they operate overnight. In a situation like this, nimble companies thrive, while others may flounder.

Insurance companies can’t predict the next crisis, but they can position themselves to be ready for anything. This means embracing progress and technological advancements – including direct-to-consumer sales.

There are many reasons to think that the direct-to-consumer model may be the future of insurance sales. The direct-to-consumer model is proving to be popular with consumers, and it adapts well to emergencies like the current pandemic.

Now, only one question remains: Who will keep up – and who will get left behind? If you’re interested in keeping up, download Silvervine’s free D2C Blueprint. This helpful guide outlines the operational and strategic variables you need to consider while moving toward D2C. Ready to take it a step further? Schedule a demo and we’ll demonstrate how our D2C software can quickly and efficiently contribute to your bottom line!