Thanks to the internet, consumers can now browse online to shop for insurance, and even obtain multiple quotes from various insurers without breaking a sweat. As consumers become more tech-savvy than ever before, insurance agencies need to step up their game or lose their ability to compete in the market.
A joint study conducted by Velocify and Insurance Technologies Corporation [ITC
] corroborates that idea, revealing that insurance agencies that have invested in marketing and technology saw more policies sold and also experienced greater business growth.
The study, “The Techsurance Marketing Revolution,” found that insurers that used marketing automation technology sold 20% more policies per producer and 10% more policies per household, on average. The study also discovered that agencies that spend more than 15% of their revenue on marketing were more likely to see growth, regardless of their company size or type.
Other key findings of the study include:
• Insurance agencies that invest in paid marketing channels tend to grow faster than those that rely on their existing book of business.
• Agencies that spend less than 5% of revenue on marketing are nearly three times more likely to experience flat revenues.
• Marketing automation allows agenThanks to the internet, consumers can now browse online to shop for insurance, and even obtain multiple quotes from various insurers without breaking a sweat.
• Marketing automation allows agen-cies to nurture customers to a buying stage, and lead management is used to increase insurer effectiveness in contacting, quoting and converting more leads into policies.
“The digital revolution has transformed the way people buy insurance, and our recent study shows that technology has become increasingly important for insurance agencies that want to grow,” said Velocify director of fi nancial services Chris Backe. “We have seen how marketing automation and sales acceleration technology can work together to boost sustainable revenue, and this new research underscores the significant ROI opportunity here.”
“Marketing is critical to an agency’s survival and success,” added ITC
president Laird Rixford. “We’ve seen it, and this study shows it to be true. For agents who are
investing in marketing technology, they are getting good returns and taking advantage of the huge opportunity that is available to them.”
While the study highlights how useful technology can be for insurers, it also underscores its weakness. The report found that as the percentage of revenue spent on marketing rose, customer retention rates dropped. This suggests that developing agencies need to make adequate investments in customer retention and satisfaction programs as they increase their marketing budgets.