How can insurance brokers use rate comparison sites to boost their books of business?

How can insurance brokers use rate comparison sites to boost their books of business? | Insurance Business

How can insurance brokers use rate comparison sites to boost their books of business?

Growing a book of business can be quite a cumbersome, expensive and time-consuming task for independent insurance brokers. Some brokers spend thousands of dollars on brand advertising and marketing campaigns without any guaranteed return on investment (ROI) or success. In many cases, traditional insurance marketing can be a bit of a gamble. 

It tends to be the biggest brokerage firms with the deepest pockets who lead the pack in terms of marketing spend. Smaller, independent brokers often struggle to compete against corporate giants in the marketing arena, but there are new and effective ways for independent brokers to generate leads and grow their books of business … if they’re willing to break with tradition.

Enter, rate comparison websites. They’re all the rage in the UK and the USA, where consumers use comparison sites to shop for insurance much like Canadians do when comparing travel costs on sites like Expedia and Trivago. But Canadians are slowly starting to catch on to the insurance comparison trend. They’re searching for and finding platforms like LowestRates.ca, which is enabling consumers to compare insurance premium prices across a number of product lines, primarily in auto and home insurance.

Independent brokers can use rate comparison websites like LowestRates.ca to acquire leads and generate new business in a controlled and cost-effective manner, according to Sean Widdess, vice president of strategic partnerships at LowestRates.ca. Brokers who use the site will only be presented to the consumer and charged for a lead if their rate is the lowest when compared against multiple other insurance offerings. 

He told Insurance Business: “Traditionally, when a broker has marketing dollars to spend, they will enact a plan that will expose the brokerage to X amount of potential leads and then they will sit and wait. A couple of things can happen. Either they spend the money, wait, and hardly any consumers come, or they experience the opposite effect and the marketing campaign generates so many leads that they’re not staffed accordingly to deal with the influx of business. It can be difficult to predict and control. Regardless traditional marketing tends to be much more expensive to acquire a customer and is not nearly as scalable.

“With a model like ours, any brokers that want to use LowestRates.ca to acquire leads and grow their books of business can do so in a controlled fashion. They can tell us the maximum amount of leads they want per day, gaining the advantages of knowing exactly how much they’re going to spend on leads and knowing exactly how many staff they need to service those leads. They can manage their budget and have a better idea of what their ROI is likely to be.”

As Canadian brokers tune into this scalable and low-cost acquisition model, their businesses are starting to transform, according to Widdess. Purchasing leads on a rate comparison website triggers a totally different sales cycle to the traditional cycle that stems from friend and family referrals. To support controlled growth, brokers are strategically building out their call centres and follow-up with clients in a different way in order to retain leads and grow market share. Large and small brokerages alike are seeing that this is the most efficient and controlled manner to attract new consumers.

In conversation with Insurance Business in 2018, LowestRates.ca CEO Justin Thouin reflected on the importance of customer service, saying: “We do see a variation in the lead-to-sale ratio between the different brokerages to whom we sell leads and that comes down to the services they provide and how they treat the consumer. Value-added services are also an important component of consumer retention.”

It’s easier for brokers to provide good customer service if they have an idea of how many customers they should expect to service per day, Widdess explained. Acquiring a set amount of leads on a rate comparison website provides a consistent stream of clients to brokerage call centres and helps brokers to manage their operations.

“Insurance rate comparison is becoming increasingly popular in Canada,” Widdess added. “Five-years-ago, the majority of consumers who visited our site had non-standard or high-risk portfolios. They were quoted extremely high premiums and were shopping around for a better price. Today, that high risk category is a very small part of our business. We’re seeing more mainstream clientele wanting to make sure they’re treated fairly and transparently on their pricing.

“The snowball of consumers flocking to LowestRates.ca is starting to pick up steam. We sold as much as 40,000 leads a month in 2018 and we’re still miles away from the consumer demand of the UK and USA, which spells big opportunity for brokerages. 2019 should see significantly more growth and will see LowestRates.ca roll out our new property insurance quoter in the first quarter. Consumer and brokerage demand is picking up and we will continue to add new brokerages on to our lead-buying platform in 2019 to facilitate this growth. Consumers are dictating how they buy insurance, and all products for that matter, so it’s important for brokerages to follow the consumers, which is what we do exceptionally well.”