Author: Laird Rixford
Comparative raters have two main selling points: speed and accuracy. However, those are also two of the reasons people choose not to have a comparative rater. How can agents use a product’s main selling points as their primary reasons not to use it? It all comes down to perception.
The perception many agents have about speed is that they know where they are going to place the business. So it is easier and quicker to go directly to the carrier they “know” is the best choice for the consumer. However, this perception can be dangerous and detrimental to an independent agent.
By limiting the choice of carriers to one, you essentially become a captive agent on a per-policy basis. Beyond that, there are many factors within the rating process that change regularly. While that company was competitive last week, it does not mean it is this week.
The truth is a comparative rater is faster than even going to a single carrier website for rating. How?
With a comparative rater, you learn and become an expert at a single interface. You enter the information into this familiar workflow to rate one or many carriers at once. The single interface also improves a producer’s ability to handle quotes efficiently and consistently. On average, our rating users can complete a quote in five minutes or less. It does not matter if they are rating one or 30 companies.
Now what about accuracy? When you go to a carrier website, the carrier will run MVR, CLUE, credit, undisclosed drivers, and other reports to provide an accurate rate on an auto policy, for example. Therefore, for the absolute most accurate rate, the carrier website is the place to go. What about the best place to get the right rate? That would be a comparative rater yet again.
What is the difference between an accurate rate and the right rate? An accurate rate is a rate that is bindable. The right rate is not only an accurate rate but also priced correctly for both the client and the agency itself.
With a singular rate from a carrier website, you are not considering factors that might better meet your consumer’s needs—factors like the price/value tradeoff, commissions and pay plan options. (Read my piece on Selling Value Insurance with Price-Based Marketing.) A comparative rater gives you access to this information on one screen. This data allow you to make a more informed decision for your client.
While we are on the topic of accuracy, a common complaint about comparative raters is that the rates are not accurate. Unfortunately, a comparative rater is only as accurate as the provided data. For example, how often do clients detail every ticket or every accident with pinpoint date accuracy? Not often.
As discussed above, carrier websites will run additional reports to firm up the rate. Most comparative rating systems also run these reports through the carrier’s real-time interfaces. The reports assure that the rates presented are accurate and, most important, bindable. Insurance carriers and comparative rating vendors spend significant resources to assure the rates provided are perfect.
In rare cases, an insurer does not run these reports up front. In these instances, a comparative rater can overcome that shortcoming. You can still compare multiple rates while ignoring outlier rates from carriers that do not provide back a fully bindable rate.
If you are not using a comparative rater, then you are doing your clients and your agency a disservice. You are not providing your clients the choice that the independent agent channel promises. You are also preventing your agency from quickly and efficiently selling the right policy.
Laird Rixford is president of Insurance Technologies Corporation, www.getitc.com.