Brokers losing competition with directs in advertising spending

In terms of total revenue dollars, the amount independent brokers are investing in advertising is roughly half of that needed in order to compete with direct writers, said Randy Carroll, president and CEO of the Insurance Brokers Association of Ontario. Carroll told delegates of York Fire and Casualty Insurance’s Executive Forum that, on average, Ontario brokers are spending less than 2.1% of revenue dollars on advertising. This amount should be 4% at a minimum, he stressed. “The competition is beating the crap out of us in terms of dollars invested in advertising,” Carroll said. “We need to make sure collectively that we’re doing a better job of advertising and letting the consumer know that we are a very viable part of the distribution channel.” Carroll cited a 2007 U.S.-based study that found that 32.3 million consumers received a quote online in the United States — an increase of 15% over the prior year. “This is something that we can’t just decide to not look at,” Carroll. “We have to make it part of our business strategies on a go-forward basis.” The IBAO launched myinsuranceshopper.ca in May to serve as a tool for brokers to leverage in the battle for online market share. Carroll noted that the site “started out fairly slow” in its first month: it had 3,600 unique visitors, most of which were brokers. “But then reality hit,” Carroll said, and over the summer the association ramped up its marketing of the site. “In October, we had more than 11,000 unique visitors to the site.”