As you well know, the personal lines insurance market is comprised of two halves -- the captive half and the independent half.  When it comes to winning customers, which half has the advantage on price?

As an independent agent, you're probably thinking that your ability to rate-shop across multiple carriers gives you a distinct advantage, and we would agree...well, kind of.  

Let me explain.  Collectively, the independent market offers insurance agents the opportunity to shop carrier pricing.  Since carriers change their pricing routinely, your best-priced carrier this year might not be the best next year.  Having appointments from multiple carriers operating in the independent market allows you numerous opportunities to find a strong price.  This is definitely advantageous since price is a very important selling point for prospects.

However, the collective independent market also has another feature which may be less advantageous -- it provides strong pricing incentives to above-average credit prospects and strongly penalizes below-average credit prospects.  In the captive market, it is the exact opposite -- higher credit prospects (in relation to the independent market) get far less pricing incentive and lower credit prospects get smaller pricing penalties.  

What this means is that independent carrier pricing will be better than captive pricing for high credit individuals and worse than captive for lower credit individuals (see chart for an illustration).  Since pricing drives consumer choice, this cuts your market-size roughly in half.  Pay attention and you'll notice that most of your winning quotes are coming from the higher-credit individuals and most of your losing quotes are coming from lower-credit individuals.

So what does this mean to your business?  At the end of the day, you need to understand where most of your winning-quotes will come from.  Industry pricing dictates, on average, they will come from higher credit folks who tend to have higher incomes, because independent agents have a pricing disadvantage to the captive carriers for lower credit individuals.

While reaching these higher income individuals may prove difficult with traditional marketing practices, the Lead Maker system has been designed specifically with high income, high quality prospects in mind.  Learn how the free Lead Maker system can help you to target high credit prospects in high-volume applications and steal significant market share from your local captive competitors.