Although the insurance industry purports to embrace online technology for consumers seeking quotes and other interaction, a new secret shopper study shows that only 44% of online quote requests get both a call and email response from the insurer or agent–and 17% received no response at all.
Cloud-based sales software vendor Velocify conducted a secret shopper study to determine how effectively insurers or their agents were responding to online quote requests. Velocify focused on responses from 25 of the largest property-casualty insurers, including direct-to-customer carriers, insurers using captive agents, and independent agencies selling products from multiple carriers.
Multiple quote requests (leads) were submitted to each company during normal business hours. All quote requests had standard or preferred risk profiles, and each quote form required the inquiring buyer's phone number and email address for contact.
The study then allowed 22 days for the companies to respond. Performance was tracked on key performance indicators (KPIs) of speed-to-call, speed-to-email, number of call attempts, and number of emails sent.
The results:
- 44% received both calls and emails
- 22% received only emails
- 17% received only calls
- 17% received neither calls nor emails
The findings were similar to a similar study Velocify' conducted in 2011, says Stuart Ganis, director of insurance industry consulting at the firm. The results show that although the insurance industry is "great at marketing and getting attention, when it comes to servicing its clients, it's not as effective," he says.
Surprisingly, based on the industry's reputation as a tech laggard, insurance performance on quote requests is on par with other industries, says Jorge Jeffery, senior manager, strategic intelligence for Velocify. The company recently conducted a similar study on Fortune 100 copmanies and the findings were similar.
Ganis notes that although the technology exists for small to midsized agencies and insurers to compete with the big national brands, many are held back by inconsistent sales processes that aren't as standardized as they could be. "The technology is available for small to midsized agencies to have a consistent sales process for all new business, but adopting it can be a cultural challenge," he says.
The study also examines how insurers performed for each KPI—and the picture isn't pretty.
Read on for the rest of the results.
Speed-to-call: Of the 61% online leads that received a callback, the average wait time for the first call from the insurer was two days and 8 hours. Previous research by Velocify shows that attempting to contact a lead within one minute of a web inquiry submission raises the likelihood of converting the lead into a paying customer by 391%.
When dealing with quote requests, "many companes don't know what the best practices are," Jeffery says . "We based results on data looking at millions of leads through our system."
Speed-to-email: Of the 66% of inquiring buyers that received an email response from the insurer, the average wait time was 22 hours–compared with Velocify's recommended best practice of 20 minutes after receipt of the lead.
Number of calls: Velocify estimates that the optimal number of call attempts is six. However, only 3% of inquiring buyers received between 5 and 7 calls before the insurer gave up—with 93% of insurance shoppers either under-called or not called at all.
Number of emails: Velocify finds the optimal number of emails to send before placing leads into nurturing campaigns is five. But only 6% of inquiring insurance buyers received between 4 and 6 emails; only 5% were over-emailed, and 89% were either under-emailed or not emailed at all.
Difference in response by type of insurer
Velocify computed a score for each insurer on a 100-point scale, based on how each performed in each of the four KPIs. The average score among all companies was 32.
In a breakdown between direct, captive and independent carriers, none achieved a score of 60 or higher, showing that all insurers, even the best, need improvement. The top three companies in the study were direct carriers, with captives consistently average or slightly above. Independent agencies performance were varied, but generally below average.
"I used to do manual rating back in the day, and our industry has always been slow to adapt and embrace new technology," Ganis says. "I don't think the independent agency system has become data driven enough to realize that the sales process can be a science."
To help reverse this shortcoming, Ganis suggests independent agents adopt the big data-driven strategy of the large captives to tap into markets, and to "embrace technology and learn how digital consumers want to be sold to."
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