Increasing numbers of people are choosing to cut out the broker and go direct when taking out life insurance, according to Direct Line.
A survey by the provider reveals consumer reliance on independent financial advisers and mortgage providers when buying life insurance has fallen by 36 percentage points in the past six years.
Ten years ago, 67 per cent of those taking out life insurance used non-direct channels, compared to 43 per cent who took out their insurance four years ago.
Almost 30 per cent of respondents said they choose not to use an IFA because they prefer to make their financial decisions independently.
The survey reveals 23 per cent insured said they used an IFA and/or mortgage provider mainly for reasons of convenience and trust.
When it comes to researching options, price comparison sites are the most popular method, followed by contacting an insurance company online or over the phone.
IFAs are fifth on the list and tend to be used by more affluent households, the research reveals.
Price, easy-to-understand information and trust in the brand are the key factors that encourage someone who would have once bought through an IFA to buy direct instead.
More than a third (37 per cent) of people who buy direct said trust in the brand was a leading factor behind their decision to do so, while 35 per cent said it was because they offered the least expensive option for the cover they wanted.
Headroom Research conducted the study between December 2016 and February 2017 based on a series of focus groups in the north and south.
It then carried out a quantitative exercise using 1,600 responses across insured and non-insured individuals aged between 25 and 55.
Pritpal Powar, head of life insurance at Direct Line Group, said choosing to go direct gives people full control of the buying process.
He added: “You can take your time and choose the right products and payments for you and your family from day one - without the hard sell. Another good thing is that if you want more information, or you have a question, you can call their expert team. Even if you start your purchase online, you may be able to switch over to a telephone call if you prefer. The choice is yours.”
Emma Thomson, life office relationship director at LifeSearch, commented: “I think we as an industry have to recognise that clients are buying the way they want to and are going to use websites.
“We perhaps need to change the way we market products and convey information, and try to tell consumers it is not just all about price. I know Compare the Market and Money Supermarket have been trying to promote features of products as well as the price to help customers make a more informed decision.
“We partner with these sites because so many people go online and won’t buy. They need someone to help them make that decision. These customers drop out and we advisers will pick up that customer.”
Ms Thomson added that while some financial advisers are beyond the reach of less affluent consumers, they are able to benefit from free advice offered by firms like LifeSearch.
simon.allin@ft.com
