Many of the most effective sales and marketing technologies underutilized by insurance agencies: report

Investment in sales and marketing technology tools among larger, more successful insurance agencies is likely to grow, compared to smaller agencies and those whose revenues are stagnant or shrinking, according to a joint study released on Tuesday by Velocify and Insurance Technologies Corporation (ITC).

The State of Techsurance 2015 by Velocify, a provider of cloud-based intelligent sales automation software and ITC, a provider of marketing, rating and management software and services, examined trends in technology usage and benefits to insurance agencies. More than 1,000 North American insurance agencies were surveyed, including direct-to-consumer carriers, insurance carriers that use captive agents for selling, and independent agencies who generally sell products from many carriers. [click image below to enlarge]

The study revealed that larger, more successful agencies tend to be more frequent users of sales and marketing technology. Additionally, their investment in these tools is likely to grow, compared to smaller agencies and to those whose revenues are stagnant or shrinking. “The results point to a technology-related performance gap in the insurance industry, which will only continue to grow, according to the investment plans of the agencies surveyed,” said a press release from Velocify.

However, the report also found that many of the most effective sales and marketing technologies are still underutilized by agencies of all sizes, “creating an opening for industry laggards to leap to the forefront.”

Agencies with “significant revenue growth” were 34% more likely to report plans to increase technology investments than agencies with declining revenues, the report found. Furthermore, agencies with 100 or more employees were 93% more likely, on average, than those with 10 or fewer employees to use each technology. And direct-to-consumer agencies were 26% more likely to than independent agencies to report plans to increase their technology investments.

“The results of this survey have confirmed what we see in the industry every day,” said Laird Rixford, president of ITC, in the press release. “Agencies who commit themselves to adopt and then actually use technology are successful. Consumers have high expectations of the companies they do business with. For an agency to have success today and continued success in the future, they need to invest in technology throughout their organization.”

The study also found that agencies that rely heavily on sales and marketing technology tend to have greater revenue growth and sell more insurance policies per producer (up to 43% more) and per household (up to 13% more). In addition, heavy users of technology are two times more likely than non-users to have better sales processes. [click image below to enlarge]

Despite the widening technology gap, opportunities still exist for smaller captive and independent agencies to compete, if they pay attention to what works and invest wisely, the release suggested. The study showed strong correlation between heavy technology use and increasing revenue and productivity in four main technology categories – automated dialers, marketing automation, lead management software and consumer relationship management (CRM) software.

In particular,

• Agencies that used lead management software sold 43% more insurance policies per producer and 13% more per household;

• Agencies that used automated dialers sold 43% more policies per producer, and 7% more per household;

• Agencies using CRM software saw a smaller uptick of 15% in policies sold per producer, but sold 11% more policies per household, second only to lead management software; and

• Similar to CRM software, marketing automation had a greater impact on policies sold per household – driving a 10% increase. [click image below to enlarge]

Despite these benefits, usage of lead management software, automated dialers, marketing automation and CRM software remained relatively low in terms of usage across all types and sizes of insurance agencies, the release said. For example, among direct-to-consumer carriers, insurance carriers that use captive agents for selling, and independent agencies, more than 70% in each group did not use automated dialers at all. While lead management software saw somewhat higher use across the board, only about 70% of agencies with more than 100 employees used this technology.

“It is clear that agencies that underutilize or fail to adopt technology are at a great disadvantage and risk being put out of business by their competition—especially as more consumers shop for insurance online,” the report concluded. “It’s no surprise that direct agencies, the most technology savvy, have experienced the highest growth in the insurance market recently,” the report said, adding that while “directs may continue to dominate, captives and independents can still grow if they invest in technology wisely and implement solutions that best match their business needs and goals.”