Saturday, April 20, 2024

An Inside Look of Lead Generation for Insurance Agents

Jamal English of EDM Network got his start selling traditional life insurance, final expense insurance, and Medicare. “My dad died when I was 5 years old, and my family was in a difficult situation,” he recalls. “An insurance salesperson told me that most people put off the conversation about life insurance until it’s too late. I’ve been educating families about this problem ever since.”

Today, English provides a marketing platform that helps agents manage pay-per-call and digital marketing campaigns. “The key to lead generation in the insurance sector is quality over quantity,” he says. “The number of leads you prospect is not nearly as critical as how many of those leads you convert into new customers. To do this, you need an in-depth understanding of your target audience. Our clients work in a wide variety of verticals. We help them refine their marketing and business model by taking an inside look at their audience.”

Generating leads in auto insurance

English describes auto insurance as a low-ticket, high-volume industry wherein agents make a small commission on each sale and must sell many policies. “It’s important to know whether your product is high-ticket or low-ticket,” English explains. “The lower your commission, the less you can afford to spend with each lead generated.”

Auto insurance agents receive commissions month by month, making it difficult to develop the cash flow to acquire initial leads.

“Most auto agents get their initial customers through referrals from friends and family,” says English. “Other agents cross-sell other products to generate the cash flow they need.”

Generating leads in life insurance

There are two branches of life insurance products: transactional agents who sell final expense products, and traditional agents who sell fully underwritten products.

Final expense products are the low-ticket, high-volume product in the life insurance vertical with premiums running anywhere from $30 to $80. This type of insurance cashflows well because carriers pay out in a matter of days.

“Inbound calls is the most effective lead generation method for final expense,” remarks English. “Six years ago, when we opened our first final expense call center, people said we were crazy, but when COVID hit, we were ready.”

Phone calls work well because final expense policies don’t require much follow-up after the sale, and agents know on the spot whether or not customers are approved. Expecting a $600 to $800 profit on each sale, agents can afford an average customer acquisition cost of approximately $280.

Fully underwritten policies are traditional life insurance policies. Customers often purchase plans as a wealth management strategy, and monthly premiums range from $100 to $400. “That is a significant difference,” says English, “so now, you’re talking to a different demographic.”

Fully underwritten policies require two weeks to be medically underwritten and another two weeks for a second internal approval process in the insurance company. Agents wait approximately 30 days for payment and generally break into selling fully underwritten life insurance through organic referrals. 

“Acquiring leads is so expensive that most agents can’t afford the customer acquisition cost,” says English. “For example, if you sell a policy for $100 a month with a $1,200 annual premium, you will be advanced around $900 once that policy closes in 30 days. To acquire those customers, you can expect to pay anywhere from 25% to 50% of that comission upfront.”

Generating leads in health insurance

“Health insurance is booming right now thanks to The Affordable Care Act (ACA),” English remarks. “We’re generating about 1,800 leads per day at a 50% conversion rate. There is a massive opportunity to sell this product, but you must understand your customer acquisition cost. Currently, it costs us $60 to acquire an ACA customer, but those customers have a lifetime value of around $750.”

Unfortunately, many agents can’t afford to bankroll the initial cost of acquiring health insurance customers. Even though the cost is just over $50 for each customer, they only receive $25 per month.

“Start with referrals,” English recommends. “ACA is easy to sell through a referral network because almost everybody qualifies for it. Reach out to your warm market and let them know they qualify for a low-to-no-cost plan.”

Generating leads in Medicare insurance

“I have seven offices selling Medicare, and this month we’ve written over 1,000 policies,” says English. “It’s a volume game — inbound calls and live transfers are both effective lead generation approaches in this vertical. Live transfers involve a company like ours calling the customer, confirming interest, and transferring those leads to you,” explains English. “Inbound calls involve a customer seeing your ad online and calling you directly. In either case, regulations require you to record remote Medicare sales, so have a recording method in place.”

In terms of payment for agents, Medicare is similar to ACA in that comissions pay on a monthly basis with a traditional contract. “There is a lot of opportunity, but the market is saturated,” English warns. “You’ll need a unique offer that sets you apart from the competition.”

Generating leads in home insurance

English recommends data leads for home insurance. “This involves reaching out to potential customers with online forms,” he explains. “The beauty here is that you can append more data points and choose the leads you want to contact.”

Like auto insurance, home insurance is a low-ticket, high-volume product. Agents typically advertise a low-barrier offer to get consumers in the door. “You market the product lower than anyone else just to start a conversation,” English says. “You make money by cross-selling other products or by monetizing referrals.”

In any vertical, agents need to know their target audience. Knowing whether their business is high-ticket, low-volume or low-ticket high-volume makes all the difference when acquiring customers. For more information, readers can contact the marketing experts at EDM Network.   


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