Originally published July 26 2005
Growing number of consumers turning to online auto insurers
by Mike Adams, the Health Ranger, NaturalNews Editor
Online insurance carriers such as Esurance are seeing massive growth as a result of growing consumer interest, reports The Argus Leader, which is probably due to the companies' ability to offer lower insurance premiums since there is no need for a local agent.
After just four years, the Internet auto insurance company, based in San Francisco with a customer service center in Sioux Falls, turned its first profit in 2004 and already is seeing high increases this year.
Its Sioux Falls facility, once a little-known company hidden downtown, moved to a 40,000-square-foot building north of town in December and has since nearly doubled in size to 320 employees.
Company officials likely will be discussing within the next year whether to add onto the new call center or build elsewhere.
Esurance is one of the many insurance companies that in recent years have taken advantage of the Internet to directly market to consumers.
The process wipes out the need for a local agent and thereby reduces premium costs.
About 87 percent of consumers visit Web sites to shop for quotes before purchasing auto insurance, while 58 percent said they were willing to purchase online, according to a 2005 survey by Keynote Systems.
As companies such as Esurance take on more customers each month, independent agents and other companies are competing with local service the Internet can't provide.
Others, such as State Farm Insurance and Progressive, are implementing Internet sites that allow people to buy online and then be routed to local agents.
Esurance, a subsidiary of White Mountains Insurance Group Ltd. (NYSE: WTM), is an Internet-based auto insurance company that was launched in late 1999.
"Since then, a lot of people have adopted the Internet as the way that they prefer to deal with financial services companies," said Kristin Brewe, director of brand and public relations.
With just more than 150,000 policyholders and $200 million in premiums, the company doesn't yet compare to other large companies that market directly to consumers.
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