By ANNEMARIE FRANCZYK
Business First

Who'll win this one: Anonymous Voice on the Phone or Friendly Neighborhood Insurance Agent?

Right now, Anonymous Voice is gaining on Insurance Agent, particularly when the dust-up is about auto insurance. Recent research suggests that more and more Americans would choose to buy car coverage either online or by phone from an insurance company, bypassing an agent.

The growing interest in direct buying is distressing to agents who pride themselves on customer service. However, changing consumer preferences present opportunities for agent-reliant insurance companies to diversify their sales channels.

The shift was identified in the 2007 Customer Focus Insurance Study by Vertis Communications, a Baltimore advertising and marketing consulting agency. The study shows that the 35-to-49 age group is driving the trend. Forty-five percent of that group said they are likely to make a direct auto-insurance purchase, an increase from 30 percent four years ago.

"In addition to being key decision makers for auto insurance, these are adults who have shown a propensity for using the Internet to research and purchase products and have a very high response to direct mail," said Scott Marden, director of marketing research at Vertis.

Consumers typically are shopping for price, wagering that without a middleman and the commission, they'll spend less. Insurance companies such as Liberty Mutual and Allstate recognized the opportunity early on and added direct-buy options.

The century-old Liberty Mutual was founded on the direct-buy concept and now has 400 offices across the country, including four in the Buffalo area. The company added a call center in 1997 and online sales last year, said Glenn Greenberg, company spokesman in Boston. Allstate customers can contact the company directly too, but they are usually directed to a community-based agent, said Krista Conte, the company's New York spokeswoman.

"People see Allstate and they think ‘agent,' " Conte said, adding that agent-based auto-coverage sales increased 7 percent last year.

Still, 65 percent of auto insurance is sold through direct channels, the balance through independent agencies, according to Conning Research & Consulting of Connecticut. And that's what frosts the agents.

Fred Holender at Lawley Service Inc. in Buffalo and Joseph Millemaci at Vanner Insurance Agency said independent agents offer objective advice on a range of products that can be tailored to an individual. Then they advocate for the client with the insurer if a claim is made. And there are no surprises, Millemaci said.

"These (direct-buy) companies come in with low prices to capture the market," he said. "They get hit with losses and then they have to raise rates."