Kevin Paterson, sales and marketing director, Assurant Intermediary, suggests ways to play with the big boys in the general insurance space.
There is no doubt that the general insurance market is highly competitive. From the major direct insurers and high street insurance brokers to the online comparison sites, everyone wants their share of this multi-billion pound pie.
The distribution of personal lines business – B&C, travel, pet, ASU and the like – is fairly evenly split across three main channels. According to Mintel, one third of all products is sold direct – from the insurer with off the page adverts, banks or other high street distributors. Another third is sold by intermediaries. And the remaining third is sold via the online aggregators and price comparison sites such as Go Compare, Moneysupermarket, ComparetheMarket and the like. I don’t see this changing dramatically in the short-term.
It is a sign of the times that a third of personal lines insurance is purchased online by consumers without turning to their financial adviser. Intermediaries, unfortunately, have to accept that as a matter of fact. Instead of rolling over and accepting that they cannot play in this space, however, there is a way of going after a slice of this pie. And they have a ready made market place that is up for grabs.
While entry into this market space might seem a daunting prospect to an intermediary who has only sold buildings and contents or mortgage payment protection in the past, I firmly believe that there is an opportunity for you to capture your fair share. To do it successfully, however, you have got to be willing to take the fight to the competition – and I would argue that your best form of attack is to be far more aggressive in marketing your skills and knowledge. By that, I don’t mean bankrupting yourself on a massive advertising campaign. Who has got the budget for that these days? You simply need to be smarter. If a third of your client base is going to buy online, then your marketing has to evolve to compensate for this.
You don’t have to go out and buy expensive leads, rather maximise your existing CRM programme. You’ve got a client base that you can tap into and demonstrate the value of your services and expertise.
For example, while many consumers are tempted by Alexsandr the meerkat, the price comparison sites can be a minefield. Your average customer hasn’t got a clue how these sites operate. They don’t know that insurers often pay to be at the top of the listings. They only focus on the one thing these sites want them to see, and that’s price. You can help guide them through the minefield. By taking the time to establish their specific needs, you may well be able to source more appropriate cover at a competitive price yourself. Take the opportunity to show them the value of your advice.
And, if you can’t beat them, join them, as they say! I’m not suggesting building your own price comparison site, unless you have the time and inclination. But you could investigate those distributors who are building solutions- ourselves included – to give your business access to customer friendly aggregator sites. There are a number of smaller operations who are slightly less aggressive than the big three and, perhaps, are more concerned with offering the right product at the right price to your customers.
You also should investigate the marketing support services that intermediary-friendly GI distributors have available. Rather than reinventing the wheel, it is possible to access cost effective marketing materials that you can tailor to reflect your own brand, from approach letters to your clients, to newsletter templates, to brochureware. Your customers already trust you to help them with their mortgage. So take the opportunity to demonstrate that trust is well-placed and show them what else you can do for them.
When times are tough, as they are now, this can be the best time to market your business and bring on new business to generate new lines of income. So go on: go and grab your share of that GI pie.