Whitepaper Brief: Lead Generation for Health Insurance Agents and Brokers

Overview

 

The health insurance industry has been through a lot over the past few years. The intense debate over what kind of health insurance we should mandate as a nation is finally starting to settle, but there are still tens of millions of Americans who are not insured. Many others are unsatisfied with their deductibles, coverage, or other aspects of their policies. 

 

The rise of virtual brokerages, or "cyber brokerages" has come at a time when many workers are choosing to go freelance and small businesses face steep expenses for good policies to cover their employees. The complexity of doing so is one of the problems virtual brokerages have trouble overcoming. Professional brokers, meanwhile, have become insurance advisors, helping businesses navigate the obstacles in their way.1

 

The job outlook for insurance agents is still strong, meaning demand will continue to be sufficient over the next decade. For this and many other reasons, it's important for health insurance providers to make decisions to effectively reach their target markets and provide them with a helpful agent or broker.

 

Potential Industry Roadblocks to Health Insurance Sales

 

One of the biggest potential problems insurance agencies face could be referred to as "underdemand." In insurance, it means the propensity for consumers to underinsure themselves or even forego insurance when it is needed or mandated. You know this if you've been working in the industry for a while. It takes some research and creativity to overcome it.

 

Another potential roadblock is health care reform. Although "Obamacare" has become the law of the land, as they say,  the industry may still be required to follow new laws sometime in the near future. The regulatory climate is always changing. 

 

There are a number of forces working against insurance salespeople. Sometimes, they prove to be strong enough to decrease profits. However, there are many non-conventional ways to fight back against these threats. Ultimately, the industry has a strong advantage in that healthcare is always needed. The question is how to reach the market.

 

Target Demographics

 

A key benefit of targeting consumers on the web is the opportunity to intercept those who might choose to buy insurance from a cyber broker such as Allay or Stride. Many such consumers may enjoy the ease of those services but may not be satisfied when their questions can't be answered. This makes millennials and other internet-friendly segments attractive. That being said, there are additional, more specific demographics to consider. 

 

There are three things that are quite common among uninsured individuals. They tend to be minority groups, have income less than twice the poverty level, and be adults.2 These consumers may not actively search for affordable insurance. Instead, they may search for subsidized healthcare or related products and services. 

 

Another potential target of interest is the elderly. With this segment of the population continuing to grow, there should be increasing demand for supplementary insurance and changes from insurer to insurer. It's also important to note that consumers aged 65 and up are adopting digital technology. Approximately 60% of that demographic went online regularly in 2013, up from just 14% in 2000.3 We can assume that even more seniors go online in 2016 because individuals who have entered the demographic recently are more likely to have adopted internet technology already.

 

Perhaps the most profitable targets are corporate representatives. Though not as many corporations insure their employees as before, many still do. As regulations are implemented and new insurance plans are offered, HR managers will be looking for alternatives. Costs alone are sufficient enough to drive plenty of money out of one insurer and into another. The jobs of the broker and the agent are to take advantage of those changes.

 

Lead Generation Benefits for Insurance Agents and Brokers

 

As we've stated, "underdemand" for insurance products is one of the headaches often associated with insurance sales. It takes a creative, data-oriented approach to surmount such an obstacle. Targeted PPC lead generation is one option for agencies and brokerages that are looking for a new way to boost sales. 

 

One of the advantages of PPC lead generation is the ability to optimize the profit of a campaign easily. When a wide range of targets are available, PPC allows the marketer to determine the most profitable options and then determine exactly which keywords lead to sales.

PPC Keyword Analysis

We've researched the top PPC keywords being used by health insurers and found a healthy level of competition. It requires a significant investment to generate leads in this industry but, as you know,  the income produced from a newly insured party is also significant.

 

The average CPC (cost per click) for the industry is $3, based on a conversion rate of 8%, which is the industry average. Costs per acquisition (CPA) ranges from to $28 to $104 at 8% CVR but decrease significantly as conversion rate increases. The average CPA comes out to $43

 

 

Based on competitor data and the average conversion rate in the industry, we've found that the average keyword in the top 15 will produce approximately 13,000 clicks and 1,098 conversions per month. That is a conversion rate of 8%. We expect this rate to rise slightly as the economy improves and industry changes occur.

 

 

Health Insurance Lead Buyers

 

Those who would consider buying leads for health insurance sales are agents, brokers and insurance sales managers. There are a number of lead generation methods these buyers may consider. Everything from webinars to local meetups have been utilized. The insurance industry is not homogenous in its approach to finding leads or in its targeting methods. 

 

PPC lead generation is particularly effective in targeting the most profitable leads without having any prior relationship to them. In fact, we (the PPC lead generators) find out how much the leads cost. Buyers just decide if it's worth the investment. For the health insurance industry, the price per lead (PPL) may range from $23 to $38. 

 

Optimizing Conversion Rate

 

Keep in mind that these are estimated PPL figures. Through optimization of keywords, ads and landing pages, cost savings can be achieved. The goal is to increase conversion rate, which will offset the cost of potential leads clicking ads. The estimated PPL above does not necessarily reflect the PPL isotree or any particular PPC management company can reach.

 

Current Industry Competition

 

There is significant competition in the health insurance industry. The average ranking difficulty for the top 15 keywords is 62/100, which means costs are a relatively high due to high bids from a large number of competitors. That being said, considering the industry we're discussing and the potential revenue, it's not bad. New keywords may be used to both target niches and reduce costs. 

 

The number of competitors bidding on ads for each keyword ranges from 69 to 84. The following domains represent the top competitors bidding on health insurance keywords.

 

1. www.healthcare.gov

2. www.ehealthinsurance.com

3. www.humana.com

4. www.aetna.com

5. www.usa.gov/health-insurance

8. www.statefarm.com

9. www.healthinsurance.org

10. www.uhc.com

 

Conclusion

 

The health insurance industry is a rapidly evolving industry that faces all kinds of forces, some good and some bad, from an aging population to the rise of automated brokering. The industry is very competitive and consumers are price sensitive. A company's lead generation strategy and subsequent sales team effectiveness are important in making the most of the changes and shifts that will occur soon. 

 

PPC managers gather data and determine a price per lead for clients in this industry. The lead purchaser's risk and investment is minimized because lead gen companies have expertise health insurance businesses usually don't have. In other words, a lead gen company does the work and takes the risk. The lead purchaser simply decides if the investment is worthwhile. If it is, the purchaser can hand the leads over to their sales teams after a short time.

 

Interested in lead generation through precisely targeted PPC management? Contact us today to discuss how we can help you succeed!

 

Sources

 

  1. Cawley, Conor. "Allay Helps Smaller Companies Provide Health Insurance."  April 21, 2016. tech.co. Available Online: http://tech.co/allay-brokers-health-insurance-2016-04

  2. "Key Facts about the Uninsured Population" The Henry J. Kaiser Family Foundation. October 5, 2015. Available Online: http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/

  3. Smith, Aaron. "Older Adults and Technology Use" April 3, 2014. Pew Research Center. Available Online: http://www.pewinternet.org/2014/04/03/older-adults-and-technology-use/

  4. Keckley, Paul; Copeland, Bill and Scott, Greg. "The future of health car insurance: What's ahead?" July 24, 2013. Deloitte University Press. Available Online: http://dupress.com/articles/the-future-of-health-care-insurance-whats-ahead/

 

Jennifer Stainforth