Leads and Lead Generation in the Insurance Industry

By June 17, 2020 Blogs

Every successful insurance company needs new prospects to grow their business, along with retaining existing customers continuously. A consistent flow of good leads is essential to achieve this.

A lead is a potential customer, who either expressed interest in your product or shopping for a similar product. Insurance leads are generally referred to as prospects who requested quotes on one of the insurance products.

We will now look at a few types of lead generation methods that are used most by insurance companies and weigh their respective pros and cons.

Traditional Ad Campaigns

One of the most common approaches is print ads and outdoor advertising. This is done by sending promotional material via mailers and using physical signs and billboards.

Pros

  • Great visibility in the local area
  • Works well, if the insurance firm or agency has a stronghold

Cons

  • Inconsistent response as people are now shopping online
  • Lower ROI making this an expensive lead generation process

Paid Search Engine Campaigns

Search engines such as Google, Bing, or others can help generate inbound leads. These types of leads are referred to as Search leads, that track a user’s search results for mention of insurance. Since the user is actively researching their insurance needs, the intent of these types of leads is usually high.

The parameters tracked include the impressions displayed, number of clicks, cost per click, number of visits to the company website, and inbound calls triggered by the ads.

Pros

  • Better validity as the leads are generated in-house
  • Higher control over the process, such as where and when to advertise – global or local, time, day of the week, etc.
  • Defined budget cap to monitor advertising spend
  • Better performance tracking of campaigns running across various channels

Cons

  • Expensive process
  • Involves operational cost
  • More suitable for large insurance providers

Stats:

  • 69% of consumers search over the internet before making a purchase (source: Dialogtech)
  • 78% of insurance consumers call a business after search on the internet (source: Dialogtech)

Agency Office and Presence at Associated Clubs

Taking advantage of associated clubs and insurance agency’s offices that have a decent footfall or strong physical presence is another one way of generating leads. Having a local office or website for clubs and agencies will be an advantage and can improve the trust, and the chance of conversion will be high.

Pros

  • Advantage of existing office and website setup
  • Simple process
  • Agency setup can be used for cold calling or cross-selling

Cons

  • Operational cost involved
  • May have to share the leads with possibly more than one Insurance company

Leads from Third Party Agency

A third-party agency, known as lead generators or lead aggregators, can be hired to generate leads.

Lead Generators

Lead generators source leads or obtains leads from trustworthy partners. They generate leads through digital ads and sponsoring search engine results using Google Ads and Microsoft Ads.

Based on the agreement and your budget, they can obtain different types of quality real-time, live transfer, and exclusive leads.

Real-time leads are transferred to insurance as soon as the prospect submits a quote or request with other insurance providers. These leads are typically quite expensive as they are the most relevant and in real-time. You have to define what types of leads are required and should have the proper infrastructure to act on this.

Live transfer leads come from verified consumers. An agency with call centers verifies the criteria matching the requirement of the insurance firm. As the criteria are already defined, the conversion rate for these leads is very high.

Exclusive leads are shared with only the agreed insurance company and have to define how many of such prospects are needed. As these types of leads are quite valuable, how quickly the agent can contact the prospect defines the success rate.

Pros

  • Real-time and quality leads
  • Limited exposure, as depending on the contract, leads can be exclusive or shared with limited firms
  • Increased business growth due to higher conversion rates from quality leads
  • Targeted geography as leads can be tailored from specific state or regions

Cons

  • Expensive process
  • Higher investment required for proper in-house agent set up to take complete advantage of the leads, otherwise, the success rate would be low

Lead aggregators

They obtain leads from different sources including lead generators and resell to multiple firms.

Pros

  • Less expensive process to obtain leads from lead generators
  • May get a wide range of leads that can be used in the future as well

Cons

Low chance of conversion as typical aggregators sells them to many firms making the share rate quite high.

Stats

  • Insurance companies using lead management drove 43% more policies per producer (source: Leadsurance)

Of the above, the insurance company can pick any one of the options. However, obtaining leads from lead generators has the advantage of having unique leads or fewer chances of them being shared even though this method might be expensive. Over time, the insurance company can look at the options of building an in-house solution with advanced technology, using digital ads and social media promotions, which can be tailor-made per business needs and be cost-effective as well.

Self or unique lead generation has many advantages over the rest of the options. As a further process, leads with the highest probability of conversion have to be prioritized for the sales channel so that they can be contacted. Otherwise, they can be added to campaigns in the future as well as to the mailing lists when they are up for renewals. This process helps in achieving sales goals and organizational success as well.

Reference:

Nisanth Korrapati

Nisanth Korrapati

Nisanth Korrapati has 13 years of Data & Analytics experience in designing & architecting Data Integration and BI solutions. As an Associate Technical Architect, Nisanth focuses on delivering technology solutions & business outcomes for Customers. In addition, he is responsible for designing solution accelerators & marketing insights for the Insurance practice at Saama Analytics.

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