Survey Says: Insurance Companies That Spend More on Marketing Make More

Hal Conick
Marketing News
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Key Takeaways
​​What? Insurance companies that spend more on marketing tend to see "significant growth" in year-over-year revenue. 

So What? Agencies spending less than 5% of their revenue on marketing are three-times more likely to have a flat revenue, whereas those that spend 15% or more tend to see a revenue increase of 20%, year-over-year.

Now What? Investing heavily in marketing and focusing on retention provide the greatest opportunity for growth. ​

May 16, 2016

Insurances companies that spend more on marketing see bigger revenue increases, according to a recent survey from Velocify. However, organizations must be careful not to focus too heavily on technology and lose focus of retaining customers

Insurance companies spending 15% or more of their revenue on marketing are more likely to see “significant growth” in revenue, according to "The Techsurance Marketing Revolution," a recent survey from Velocify.

The company, which surveyed more than 1,000 insurance agencies, found that agencies spending less than 5% of their revenue on marketing are three times as likely to experience flat revenue. However, agencies spending 15% or more tend to see a revenue increase of more than 20%, year-over-year.

Other findings from the survey include:

  • Agencies spending more than 15% of their revenue on marketing generate twice as much revenue from nonstandard auto insurance and three times as much from life insurance than from commercial insurance.
  • Insurance companies using marketing automation sell 20% more policies per producer and 10% more per household.
  • Companies using lead management drove 43% more policies per producer and 13% more policies per household.

"The digital revolution has transformed the way people buy insurance, and our recent study shows that technology has become increasingly important for insurance agencies that want to grow," says Chris Backe, director of financial services at Velocify.

Backe says marketing automation and sales acceleration technology, in particular, can help boost revenue and give a huge boost to ROI.

Downside of Spending too Much on New Customers

One downside to watch out for is spending too much on new customer acquisition and losing sight of current customer retention. Velocify’s survey found that organizations spending more than 15% on their marketing mix tend to see a retention rate of approximately 81%, but those spending 5% or less see a nearly 86% retention rate.

“If you invest heavily in marketing and focus on retention, you have the greatest opportunity for growth,” the report states.

Marketing will continue to be important in insurance, especially as millennials grow in population and age. A recent survey from Communispace found less than half of millennials consider health insurance to be part of maintaining overall health and wellness . Finding the best way to communicate with this segment will be essential for long-term success, experts say. 

Since 2008, Stephanie Courtney has been better known has Flo, the face of Progressive Insurance Corporation's ad campaign. Progressive has created more than 100 commercials starring Flo and the character has earned nearly 5 million likes on Facebook. Flo exemplifies the power marketing can have in the insurance industry. 

Double Life – Progressive Insurance Commercial

Author Bio:
Hal Conick
Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at or on Twitter at @HalConick.
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