Brick-and-Mortar vs. Online Agencies: What Works?

The internet is changing nearly every facet of life—including insurance.

Most of the time, technological changes are for the better. But in the insurance industry, not everyone is willing to accept those changes quickly.

Today, insurance coverage is easier than ever for customers to obtain online, thanks in large part to millennials. Generation Y is driving the insurance industry’s investment in technology because millennials grew up using computers and demand more out of their relationships with companies. Millennials also tend to patronize businesses that stand for a bigger purpose and are comfortable doing most tasks on their phones—requiring insurance organizations of all types to respond by increasing their web presence and mobile-friendly capabilities.

This focus on technology has birthed a new type of independent insurance firm: the online-only agency. Do today’s customers require a physical location for their insurance needs? Or are they willing to work with an agency that takes care of all its business digitally?

The most successful businesses are those that leverage the benefits of both models to provide service to the customer—on the customer’s terms.

The Brick-and-Mortar Model

Many carriers still prefer partnering with brick-and-mortar agencies because they are recognizable within their communities and tend to have local networks of business and personal connections. When things go wrong, customers can meet with agents in person to solve the problem. Agents at a brick-and-mortar agency may also be able to give prospects and existing clients more direct attention, like offering to meet with them outside the office.

However, because they have a physical presence in the community, these agents may have additional obligations that take them away from the office more frequently—which could interfere with their ability to perform routine customer service tasks. And their reliance on face-to-face connections gives some brick-and-mortar agencies an excuse to avoid investing in digital services as much as they should.

Online-Only Service

Because an online-only agency does not sell exclusively in one local market, agents are typically available in the office when you call, not out meeting with other customers or promoting their business to groups in the community. Agents in these businesses may also find greater success as subject matter experts in specialized products because they can promote that niche across several states.

An online-only agency also tends to dedicate more staff to customer-facing positions since it does not carry the burden of generating new business away from the office—and what it lacks in location, it usually makes up for in digital services.

But clients who prefer buying insurance in person from someone they know may not favor an online-only agency. After all, it cannot provide the personal attention some brick-and-mortar agencies can.

Ultimately, the best type of agency for a customer is a personal decision. What is beneficial to one industry or customer may mean very little to another. Whether they’re online or brick and mortar, independent insurance agents must be available to the customer on their terms to provide great coverage at a fair price—and fast.

Mitchell Sharp is a marketing associate for