Culling All Leads
Insurers and agents are making better use of aggregators, social media and micro sites to garner new business.
Insurance Networking News, 09/01/2010
The proliferation of online lead generation sites has presented promise and peril to insurers.While aggregators may provide an instantaneous connection to consumers, they also can engender back-end technology obstacles for carriers, who must sift through duplicate leads and ensure data integrity.
In addition to technical impediments, carriers using the Web to elicit new business face difficulty integrating those leads with the existing distribution channel-without disrupting or alienating the agent force.
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Also, no matter how many leads are generated, even the most promising will likely perish for want of effective follow up. State Farm captive Kirk Fuqua is a case in point, using 10 aggregaotrs to generate about 500 leads monthly, 40% to 60% of which are converted into policyholders.
It's no secret that Web is playing an ever-greater role in auto insurance marketing. After all, consumers predominantly shop for auto insurance based on price.
In fact, nearly one in two auto insurance shoppers start their search for a new policy on the Web, either at a carrier site or the many aggregators that provide leads for the carriers and agents, according to a report by Forrester Research Inc. entitled "How to Develop An Effective Multichannel Insurance Distribution Strategy."
And now, Web fever is spreading to life and home insurance. Forrester, in another study, "The U.S Life Insurance Buyer's Journey," says the Web has overtaken agents as the dominant source for researching life insurance, although 90% of the policies are still written offline.
Nonetheless, if consumers are researching on the Web, they can be captured as a lead. And why not: According to Leads360, a Los Angeles-based lead management software and services company, agents average an 8% to 12% conversion rate with Internet leads versus a paltry 0.9% for direct mail.
While other industries embraced the Web a decade or more ago, the insurance industry as a whole woke up to it largely over the past five years. "The insurance industry is never going to be known as an innovator, but they are a fantastic first follower," says Ellen Carney, a senior analyst with Forrester.
As for carriers, they tend to cite the proprietary nature of their Web-based lead generation programs, and guard that information resolutely.
Northbrook, Ill.-based Allstate Insurance Co. says that 60% to 70% of its lead generation is Web-based, and that 70% of that activity is via third-party lead aggregators. The other 30% of its Web-based lead generation is "homegrown." And it claims the conversion rate from homegrown Web-based leads is roughly the same as using third-party aggregators.
The biggest problem with Web-based leads, Allstate spokesperson Raleigh Floyd says, is weeding out lead duplications and the integrity of lead data. "Web-based leads [at Allstate] continue to grow based on consumer adoption of the Web," he says.
CAPTIVE
Over a variety of lines of business, some of the captive agents of Bloomington, Ill.-based State Farm Mutual Automobile Insurance Co. work with Web lead aggregators. One such agent is Kirk Fuqua of the Kirk Fuqua Agency in Edmond, Okla., who says that Web-based lead generation has been his exclusive marketing tool for about three years.
"For me, it is the only marketing I do," Fuqua says. " I do not use direct mail [and other lead generation] programs. I purchase leads from aggregators such as Insureme.com and Netquote.com."
Fuqua uses about 10 aggregators to generate about 500 leads a month, predominantly for auto. The leads are sorted by mailing zip codes in the geographical area around his office. He estimates he pays $7 to $10 per lead, of which 40% to 60% are converted into policyholders.
But there's another reason he likes the Web and, in a word, it's the immediacy. Someone using an aggregator's site is clearly in the market at that moment relative to the query.
"It's immediate and better. With direct mail, you really have to wait for people to respond to you," he says. "It's the way of the world because people really don't have time to go shopping with an agent. The Internet just makes it easy for them, and is the reality of where the market is going. It's being ahead of the curve."
Fuqua adds that being in the Oklahoma City metropolitan area lends itself to Internet leads because consumers are besieged with direct mail and much, if not most, gets tossed into the trash unopened. In rural areas, he notes, consumers get less junk mail, and are more likely to read it. "I know agents in rural areas that still have success with direct mail," he says.
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