How insurance brokers find clients beyond price comparison

In 2017 the Competition and Markets Authority put a number on how far UK households had moved to comparison sites for insurance: 44% of the internet users it surveyed had used one for motor cover in the previous twelve months, and 27% for home cover. For an independent insurance broker that figure can read like a verdict, as though the price-led buyer now belongs to someone else. It is narrower than that. The survey asked consumers about personal policies and is now several years old, so it says nothing about the business buyers many brokerages serve. What follows separates what the CMA measured from what it did not, then sets out the routes a small UK brokerage can run. Each is scored on the hours it takes, so a managing partner with four spare hours a week can see what fits.

What the CMA measured, and what it left out

The study counted consumers using comparison sites, and it counted them by product, which is why the motor and home figures differ so much. The CMA's final report on digital comparison tools, published on 26 September 2017, drew on an online survey of 4,083 internet users. It found use in the last twelve months was highest for motor insurance at 44%, with home insurance at 27% and travel insurance at 18%. In the sales-channel data it used, comparison sites were also a large route to new business in motor, at about 55%, against about 10% in broadband.

Three limits matter to a brokerage. The respondents were consumers, so the figures do not describe a company buying fleet or liability cover. The sales-channel figure comes from a small number of large suppliers that list on comparison sites, and the report itself says so. And the sales data covers 2013 to 2015, so it is a picture of where the market was, not a forecast of where a particular brokerage stands today. The report also found potential issues with the presentation of excesses in insurance, a reminder that a price-led result and a like-for-like result are not always the same thing.

A buyer-path map: who looks where, and what is not known

Every row below is either a figure the CMA published or a labelled piece of reasoning, and the right-hand column says which route might meet that buyer. Use it to ask which buyer your own book is made of before choosing where to spend time.

A comparison result is often the start of a conversation

The report found that 41% of recent comparison-site users had bought through one, and that many who bought elsewhere used the result as a bargaining tool. Of the recent users who bought outside the sites, 44% used the results to negotiate a better deal directly, with an existing or a new provider. The CMA also noted that the main alternative to a comparison site is visiting a supplier's own website, and that people who had not used comparison sites were more likely to visit supplier sites.

For a brokerage this is worth reading carefully, without over-reading. It does not say brokers win these conversations. It says the conversation exists, and that the quote a household carries into it was set elsewhere. A firm that replies the same day and can explain what a policy does and does not cover is in a position the price-only result cannot match. A firm that replies in three days is not.

The routes a small brokerage can run, with invented hours

Each route costs partner hours before it costs cash, and the hours decide how many a small firm can run. The example below is an invented UK brokerage of eight people in which one partner can give four hours a week to finding clients. Every hour figure is made up to show the method. Replace them with the real ones before drawing a conclusion.

Two things follow. The first is that the cheapest routes are the ones that depend on the firm itself, and an agency can add little to them. The second is that the routes an agency can run, such as pages on the brokerage's own website and paid search, are the ones that need the most hours and the most cash. That is not a reason to avoid them, only a reason to price them. Our worked ranking for a mortgage broker, how mortgage brokers get clients, ranked by cost, shows the method with partner time priced in, and the same approach applies here.

Being found, and being checked

Two public pages shape what a prospective client sees before the first call, and neither is a lead source on its own. The first is the Financial Services Register, which the Financial Conduct Authority describes as a public record of firms and individuals that are, or have been, authorised by it or the Prudential Regulation Authority. A careful buyer can look a brokerage up there. The register page also says that for an appointed representative a buyer can ask the principal to confirm what activities it has permission for, so a firm in that position should expect the question.

The second is the Google Business Profile. Google's guidelines for representing your business say a business can have a profile if it has a physical location customers can visit or travels to customers where they are, and that a virtual office does not qualify. Whether a given brokerage meets that is a fact about its premises, which the firm knows and this article does not. If it does, the upkeep costs little in the fit test above, and the log will show whether it earns its half hour.

What to count so the choice stays with the partners

The only evidence of which route works for this brokerage is the brokerage's own record of how clients arrived. Ask every new client how they found the firm, and write the answer in a dated log on the day. Note too whether the client had looked at a comparison site first, since that tells the firm how often it is the second call rather than the first. Twenty entries give a rough picture and fewer than that give a hint, so run the log for a quarter before moving hours between routes.

Take one invented quarter. Of 20 new clients, 9 came from the existing book, 5 from introductions, 4 from the website and 2 from elsewhere. The partner would then put the next hours into the book and introductions, and treat the website as a smaller part of the week, because the log supports that and no outside average does. Change the numbers and the answer changes, which is the point.

Where the evidence runs out

Nothing in a 2017 consumer survey tells a brokerage how a company chooses an insurance adviser. For that buyer, the article offers reasoning only: that a business is more likely to be introduced by an accountant or solicitor than to shop on price alone, and that pages naming its sector make a firm easier to recognise. Treat both as hypotheses to test in the log, not as findings. Our article on what one enquiry should cost a professional services firm gives the sum for deciding how much any route is worth paying for once the log has a conversion rate in it.

When not to hire an agency yet

Do not appoint an agency to find clients until the brokerage can say how its last twenty clients arrived. Without that, no report can be judged and the first quarter turns into an argument about clicks. Wait too if nobody can reply to a web enquiry within a working day, because a paid enquiry left unanswered wastes the spend. And if the partners have no hours to brief and review the work, a smaller job will serve better than a retainer. What to ask before anyone is appointed is set out in what an insurance broker should look for in an agency. What we examine on a brokerage's behalf is on our page for UK brokerages.