Earlier this year, we shared our research on how the purchase of a personal lines auto policy only had about a 50/50 chance of resulting from the lowest quote. It is great to know that agents understand the value of a particular product and can sell the value as often as the price.
When it comes to homeowners policies, the ratio of selling the higher cost, more valuable product is even more dramatic. With respects to homeowners policies written, only 43% resulted from the carrier with the lowest quote!
Here are the same two charts from the previous post, but with home data:
Besides more value, there is also more elasticity in homeowners quotes. For example, on average the price differential between the lowest and second lowest quote was an increase of 19%. In contrast, homeowners policies saw an 11% increase in the price of the second lowest quote for a total of 21% over the lowest price.
Statistically the data demonstrates that agents are clearly more concerned about value than they are about price. Please do misunderstand, having a competitive price is important. However, you do not have to be the lowest price to win the business.
If you ask most carrier marketing representatives or agents, they will tell you that only the lowest quote presented in the comparative rater can be sold. In other words, the lowest price always wins.
In actuality, we have found that the correlation of number of policies sold and lowest quotes is around 50/50. In almost half the cases (49%) of new business policy sales, the carrier that wrote the policy did not have the lowest quote.
In reviewing tens of thousands of new business policy sales by nearly a thousand agencies during the first half of 2014, we were able to see a few key patterns emerge with respect to writing personal automobile policies:
Which Quotes Get Written?
We learned there is more price elasticity than many carriers may believe when it comes to personal automobile polices. For example, more than 1 in 5 policies written (22%) resulted from the second lowest quote.
How Much More?
Clearly, there are a lot of factors that go into picking the best policy for a customer. However, our findings show that the odds of selling a new policy when you have the lowest quote is still no better than the odds of a coin flip. So which do you pick, heads or tails?
If you are curious about our findings or are interested in learning more about EZLynx data, please contact Brady Polansky by email at [email protected] or call (972) 410-3856.
Agency Pulse monthly report delivers enhanced business performance insights to insurance agencies
EZLynx today announced the recent release of EZLynx Agency Pulse. This first of its kind automated agency report aggregates data from EZLynx Rating Engine and EZLynx Management System into actionable business intelligence that enables agency owners and administrators to more profitably manage their business.
EZLynx Agency Pulse provides agencies key metrics of their monthly insurance agency performance, derived directly from their EZLynx data to make targeted, educated business and marketing decisions. EZLynx, as the only industry leader in comparative rating that also has a full-featured agency management system, is uniquely positioned to provide rich, multidimensional agency reports that are unavailable in any other system.
“This first step in putting powerful agency information into the hands of agency owners uses all of the robust quoting and policy data found in EZLynx Rating Engine and EZLynx Management System to deliver eye-opening performance metrics about your business that can’t be found in any other system,” said Jaideep Jayaram, Vice President of Sales, EZLynx. “With so much customer data locked away in outdated agency management systems, agency owners have been desperate for the kind of actionable agency analytics that can be provided through EZLynx Agency Pulse. The feedback from many of the agents who have been receiving this data for the past few months has been overwhelmingly positive.”
Automatically generated each month with both an Agency Snapshot and Detailed Information sections, EZLynx Agency Pulse delivers performance data in an easy-to-view report that has been designed to show key performance information based on collaboration between EZLynx and a team of agency owners. Actionable metrics that help reveal opportunities for growth and increased profitability include statistics on close ratios, retention, clients, carriers, and premium. More importantly, agency owners can see the changes in metrics from the previous month, making it much easier to track strategic objectives and priorities.
“EZLynx Agency Pulse has illuminated the business performance of my agency in ways that would have never been possible on our legacy management system,” said Brian Burns, Owner, Compass Insurance Group LLC. “Because EZLynx is a tightly integrated comparative rater and agency management system in one platform, they were able to build amazing reports that can’t be found in any other system. That, combined with the quarterly website performance meeting that is part of EZLynx Agency Websites, we have been able to make strategic marketing decisions based on actual data and then track the results.”
EZLynx Agency Pulse is available today on EZLynx at no additional cost. EZLynx automatically sends out Agency Pulse each month to all agency owners with an EZLynx account. To learn more, visit http://info.ezlynx.com/agency-pulse.