Using insurance carrier data to acquire solid leads
Carriers can help insurance agents acquire more promising leads with these three tips.
Insurance carriers and their agency partners struggle more than ever to attract and retain the right policyholders because customers have more choices than ever before. It’s not unusual for policyholders to switch carriers several times — a behavior that fatigues agents and erodes profitability. It’s much more profitable to retain and defend existing clients than acquire new ones.
Some carriers rely on their agents to prioritize and determine a lead’s potential value. Others try to address this challenge by doing rudimentary lead vetting for agents through call center staff. Both approaches tend to yield leads that are arbitrary, ad hoc or based on intuition. Agents and call center staff don’t have the time or resources to make fully informed decisions.
With the market now so turbulent, agents must push carriers to use new data-driven approaches in identifying prospects and retaining customers that yield a higher lifetime value. Lead quantity typically isn’t an issue for carriers because more people are shopping online and plenty of qualified leads come in from websites.
However, these leads often have incomplete or inaccurate information, which forces agents to waste time and energy sifting through poor quality leads to find promising ones. A survey of more than 100 marketing lead-gen executives at insurance carriers by the Aite Group found that only 37% of carriers have the ability to route leads to agents with prioritization. Fatigued agents need new ways to work smarter, not harder.
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Confirm the identity
As a first step, agents need to push carriers to ensure that a lead is valid and the information is accurate. More complete identities are indicative of higher scoring prospects who are more likely to convert and remain long-term policyholders.
At a minimum, the lead information should be vetted to ensure that the prospect is an actual person, whether the lead is or is not a current customer, and that all the contact points are factual and reliable. Existing customers, duplicate leads and invalid identities should be automatically flagged at the onset so that agents can focus on the most promising prospects.
Carriers today have access to data technologies that can resolve, match and manage millions of consumer identities that can be used to affirm the integrity of a prospect’s identity-related data. Some can even include aliases, and name and address changes.
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Predict risk and attrition
Carriers also have access to analytical models that can predict risk and the likelihood of attrition. Those carriers that use predictive analytics technologies can identify prospects for agents that are much more likely to be retained beyond the first renewal period.
These technologies typically employ insurance analytic models based on demographic data such as gender, home ownership, length of residence, and the number of moves in recent years. Some solutions have the ability to combine this information with such financial data as wealth, income, credit rating or history to get an even more complete vision of a lead’s true potential.
Analyzing other attributes such as a prospect’s insurance inquiry transactions, the number of carriers shopped within a specific time, and the most recent shopping date have proven to be good predictors of policy conversion.
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Know the prospect in real time
Lead evaluation and assessment tools that assess and score insurance leads in real time based on the propensity of a prospect to request a quote and purchase a policy are other effective means for carriers to serve agents better-qualified leads.
These tools provide a window into a prospect’s policy-related behavior in real time. Duplicate and fraudulent leads are filtered out in the process. The immediacy of the technology enables a carrier to prioritize and route the lead to agents when the prospect is most receptive. The result is a higher degree of customer satisfaction at the beginning of the relationship, which can translate into long-term customer retention.
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Case study
Consider a case study conducted by LexisNexis involving a leading multi-line carrier that was struggling to verify leads despite having a robust lead generation program that was yielding an abundance of prospects. The carrier’s agents were spending considerable time and energy trying to prioritize and contact potential customers with sporadic success. The process not only frustrated agents, it was also costly and inefficient.
The carrier switched to using technology that accurately identified lead information. Leads were analyzed to determine whether the identity components “fit together” to help bolster confidence with identity verification. With solid identities in hand, the carrier then used predictive models to glean insights on each lead’s quoting and conversion behavior.
A proportion of the leads were deemed low quality and earmarked as a lesser priority so that agents could focus on the higher quality leads. Further analysis revealed an insightful conversion rate — the higher scoring leads converted seven times more often than the low scoring leads. One in every 15 high scoring leads converted to a policy, while conversion for the low scoring leads was significantly worse: just one in every 104.
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Work together to acquire better leads
The proliferation of sales channels and the ease with which consumers can comparison shop has put extra pressure on retention rates. LexisNexis data show that, on average, nearly one-third of policyholders switch before the end of the first term, well in advance of the carrier’s and agent’s ability to recoup the acquisition cost. Agents need to work with their carrier partners to develop ways to deliver highly predictive acquisition and retention intelligence at the point of prospecting.
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Sandeep Kharidhi leads Product Management for Acquisition and Retention products at LexisNexis Risk Solutions. Email him at sandeep.kharidhi@lexisnexisrisk.com.