Brokers might think of insurance comparison sites as commodity channels offering no advice, but they are getting a lot of things right. And in some respects, brokers may find it useful to mimic them, a financial advisor recommends.
Speaking at a recent Association of Financial Advisors (AFA) conference in Australia, Chris Kirby, head of technical strategies at the financial services company AMP, undertook an analysis of the “good, bad and the ugly of direct insurance.”
Kirby said brokers have something to learn from comparison sites; not just in terms of what they are going up against, but also in terms of what practices or strategies they might be able to adopt from them.
“Direct insurance has two streams: the direct insurance providers and the direct online brokers,” Kirby said. “The customer experience is vastly different based on which model the customer chooses.”
Kirby evaluated four direct online brokers for his comparison: iSelect, Choosi, Rate Detective and Lifebroker. “I chose those four not to pick on them, but because they represent a good cross section of the online broker market,” he said. “All have high market penetration and high brand awareness.”
So what can brokers adopt from these models?
One-stop impression
“As soon as you enter their website, you see they are offering a one-stop shop solution,” said Kirby. “They offer access to every single retail insurer and retail product. It gives the impression by using this site you have a full suite of products being offered.”
When clients visit your website, are they instantly given the impression that you will be working on their behalf and seeking the best deal from a wide berth of insurers? It is essential that this is how clients feel on arriving at your site.
Lead generation
“You cannot self-transact and complete your purchase on these sites, but that is the impression they give,” said Kirby. “You get to a check point. You fill in enough information to start the process, but then it is made clear the client is going to have to contact them or they will contact the client.”
Comparison sites are generating an invaluable lead directly to a client who is interested in purchasing insurance. This is not a common practice for insurance brokers and can be easily built into a broker’s online homepage.
Customer service focus
“They provide high levels of customer service, absolutely great,” said Kirby.
If you have ever spent time on the phone with a direct broker, you might have spoken to a slick-speaking sales/customer service person, he said. A great amount of detail is applied to how direct representatives treat and speak to customers on the phone. This level of care and attention, albeit for a brief window on the phone, makes a lasting impression on customers.
Kirby offered a final word on where advice professionals should avoid competing with the direct market.
“Product, price and research is not where you should compete with the direct market,” he said. “Your value is in advice. Direct insurance is prepared to undercut on price to win business, so compete on areas which involve value-add.”
