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Best ways comparative raters assist insurance agents

August 31, 2022

Digital technology designed for the insurance industry—commonly known as “insurtech”—offers solutions that can help improve the speed and accuracy of everyday workflows. While there have been great strides in digitizing day-to-day insurance tasks in recent years, there’s still enormous opportunity for evolving insurtech tools to provide new efficiencies for consumers and agents alike.

A recent Agency Forward survey found that nearly three-quarters (73%) of consumers, 78% of small business owners, and 91% of middle-market business owners want an agent who can meet their insurance needs virtually and digitally, regardless of their location.

On the agent side, over half (54%) report struggling to maintain clients due to the transition to all-digital relationship models.1 Furthermore, agency owners nearing retirement with plans to pass on their businesses to a younger generation that has never known anything other than a fully digitized world.

With these trends in mind, it may be helpful to break down insurtech into its components and examine each individually. In this article, we’ll take a close look at the function and benefits of one important tool: comparative rating technology.

What is a comparative rater?

Comparative raters employ software that allows an agency to enter a prospective client’s data once and receive quotes from several carriers. Without comparative raters, if agents wanted to offer clients multiple price quotes, they would have to log in to each carrier’s website portal and repeat the data entry process each time. Since they first appeared about 15 years ago, comparative raters have evolved to include a wide variety of other workflow and marketing tools, such as report generation, automatic lead follow-up, and client-facing quote generation.

Comparative raters are most often used in personal lines. Agents and buyers in this segment simply want to make sure they have explored all the price alternatives before making a final decision.

Applying comparative ratings to commercial lines is more challenging. Commercial products tend to have a wider variety of terms and conditions, and companies may have different desires for specific coverages and endorsements. This makes like-for-like calculations more complex. Despite these challenges, a number of new entrants in this sector are focusing specifically on commercial lines.2

Emerging lines of commercial insurance targeted by comparative raters include business owner’s policy, property, general liability, contractor’s liability, commercial auto, umbrella, employment practices, errors and omissions, directors and officers, and cyber liability.2

How insurance comparative raters work

To effectively use comparative raters in the insurance industry, an agent enters the prospect’s information and then chooses which carriers to ask for quotes. Applying built-in underwriting rules, the software provides rates in a matter of seconds. Some raters now allow the agent to take the quote all the way through the binding process. Most raters are cloud-based, which means results are always current. For the most part, the user experience is simple and intuitive, and staff training tends to be minimal. Additionally, raters often continuously check for accuracy, red-flagging missing or invalid data throughout the quoting process.

To save time, many comparative raters leverage the information available in the public domain to pre-fill data entry fields. For example, a rater with access to a state’s motor vehicle database may be able to pre-fill fields such as addresses, vehicle identification numbers, or birth dates just by searching a prospect’s name and email. Or, applicants and co-applicants can be switched with a single click without the need to reenter data when quoting the same household.

Some raters are able to put their quoting engine directly on an agency’s website, allowing potential clients to shop for insurance online. Publicly available information can be useful here as well. For example, if a prospect requests a quote for home insurance at an address located in a flood plain, the program might ask if they are interested in flood insurance.

Reporting capabilities included with most rating systems allow agencies to keep track of the number of quotes generated by each agent, location, line of business, and lead source, among others. Over time, these reports can provide insights into which quoting strategies lead to the best closing ratios.

The benefits of using a comparative rater

Here are some of the benefits commonly associated with comparative raters that can help improve an agency’s bottom line:

  • Efficiency—The primary benefit of a comparative rater is not having to go to each carrier’s website for each quote, turning a task that might take hours into one that takes minutes. However, there are other time-savers as well. Once an insured’s data is entered, it remains as long as the client is with the agency. This means quotes can be re-shopped at any time for endorsements, renewals, or rewrites. It takes only seconds to change coverage, reassign vehicles or swap a named insured. In auto or home applications, quote templates can be used to preselect answers to common questions. Comparative raters can also streamline the renewal process by allowing clients to update risk information securely online prior to requoting.3
  • Self-assessment—Keeping all of an agency’s quoting activity in one place allows for easier and more effective self-measurement than the scattershot approach of going from one carrier website to another. Rater-generated reports can tell an agency where its business is coming from, close ratios per carrier, and other valuable metrics that can be leveraged to improve profitability.
  • Marketing—By automating a series of follow-ups to any unsold prospects, comparative raters make it easy to remarket. Getting in front of prospects multiple times has a proven track record of improving closing ratios.5 Comparative raters may also be able to identify cross-selling opportunities.
  • Value-adds—Clearly, comparative raters are about more than just contrasting premiums. The software also sorts quotes by down payment, annual premiums, limits, and deductibles. One carrier may have the best price, while another may have more favorable terms. This information is extremely important for long-term client satisfaction.4 In addition, comparative raters often allow agents to modify interfaces based on their industry knowledge, essentially providing “customizable” insurance packages. This lets agents guide client choices in the right direction.5

How Nationwide can assist

Nationwide has recently improved our ability to connect with comparative raters via our new product, Nationwide Express. The process is designed to be simple and intuitive. Within minutes, an agent can start a quote through a comparative rater, then bridge directly to Nationwide to finish the quote and close the sale. Learn more about how we streamline quoting and selling.

To learn more about why adapting your systems and practices can help you succeed in today’s changing environment, visit our Guide to agency technology.

Chapter 1: Your Guide to agency technology

Clearly, adopting and maximizing technology is key to building for the future. Read on to learn about agency tools that can help meet client expectations, increase your team’s efficiency and help your agency grow.

Chapter 2: Learn more about technology basics

Once you have an understanding of the basic foundational technology, read what comes next for your technology journey. By integrating your systems, you’ll have opportunities to streamline sales and service clients.

Chapter 3: Take it to the next level