Online Self-Service Adoption Hampered by Consumers’ Tech Fears

Ara Trembly
Insurance Experts' Forum, April 15, 2010

The Internet: The final frontier. These are the voyages of the Internet insurance customer—buying, paying, asking questions, changing coverages; going where insurance customers have never gone before.

Perhaps you’ve never thought of online commerce in the insurance space in terms of Star-Trek-like trailblazing behavior, yet it is clear that thanks to the advent of the World Wide Web we are now requiring customers to behave in many new and different ways. I thought of this recently while moderating an interesting Web seminar for INN dealing with online self-service for insurers recently. 

Our panelists were trying to come up with reasons for why online self-service hasn’t been more popular with insurance customers. Certainly, this practice has many benefits for the insurer—saving on personnel costs, speeding some transactions and perhaps even enhancing the customer experience. And there are pluses for insurance customers as well—delivering faster service and putting consumers more in control of their interactions.

The more I think about the whole online self-service experience, however, the answer to its lagging adoption lies in a single factor—fear. It’s not the consumers don’t want faster interactions, or even that they turn their noses up at incentives offered for doing business online. Those are appealing, but there are a number of less appetizing aspects of interacting with any vendor online, and they often have nothing to do with the vendor, per se.

Commerce via the Web is a paradigm that is in many ways still in its infancy. While it excites and interests us in many ways, we have also seen enough trouble in our online interactions to be wary of trusting it too much. The customer-facing systems we encounter are all-too-prone to freezing up or breaking down. And when that happens, all our rage and frustration are vented on an unresponsive screen and a seemingly distant vendor.

The rage and frustration are multiplied if the online vendor doesn’t provide a human for us to converse with, or at least someone with whom to trade instant messages. Of course, having humans at the ready is costly, so vendors are loath to provide them, especially in this current economic malaise.

Ara C. Trembly ( is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at

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Comments (5)

I came across some interesting statistics recently. Over 55% of US online insurance owners don't use online self-service and that low adoption is consistent across generations. As a consumer myself, I have been in situations where self-service isn't the right medium for complex interactions. Having said that, it is imperative for the insurers to incentivize agents to promote self-service rather than getting too bogged down by the notion of inter-channel conflicts.

Posted by: Akshay D | April 21, 2010 2:49 AM

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Ara, you raise important issues in your post that should not be dismissed. I agree there may be some element of fear - fear of making the wrong choice, fear of the level of information required. Buying insurance online requires the exchange of much more information than purchasing a book online. The idea of click to call or chat is certainly one way to drive further adoption. There must be a sensitivity from industry that addresses the needs of consumers who have more skin in the game. An amazon or Zappos purchase can be returned but insurance purchases are a commitment for at least a period of time.

Posted by: Karen S | April 16, 2010 11:59 AM

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Consumers have shown themselves, and I count my here, as hesitant to significant online purchase and commitments without engaging with a real person. We see that will high online research rates but low online sales for auto insurance. Many companies, for commission reasons, separate field, call center and online channels but to succeed it needs to be multi-channel. If I want to ask a question to validate my thinking, it is perceived to a demand to speak with an agent in a few days - I don't, I want a little last minute guidance. Use most good retail sites and look at the escalation options available chat, 'click to call' etc. They know this improves checkout rates - insurance just needs to learn lessons that were solved years ago.

Posted by: Terry Golesworthy | April 16, 2010 11:42 AM

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I think you need to be more specific about the specific E-COmmerce you are referring to....the E-pay and E-Bill business is growing by leaps and bounds. While it is true not all bill payers embrace the self-service pay technology, a substantial number of people have embraced E-Payments and quite a few use mobile phone bill-paying technology. Having said that, paying bills only involves a few variables. Filling out insurance applications could be a challenge for many folks.

Posted by: omaha | April 16, 2010 11:19 AM

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It's not fear. There's no "fear" inhibiting customers from using But you raise an interesting point -- thinking in terms of value to the insurance company misses the point entirely. The question is, what's the value to the customer? Certainly Geico, Progessive, and USAA's customers are seeing value. See my post at for more.

Posted by: Matt J | April 15, 2010 4:56 PM

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