This is the first in what is likely to be an ongoing series of interview based case studies by The Digital Insurer on business models that have incorporated digital thinking. Chris Eade is the founder and CEO of Lifebroker – one of Australia’s largest life brokers.
It specialises in selling life insurance on-line and over the phone and provides a comparison of life insurance products offered by more than 10 of the largest insurance providers.
The company is based in Melbourne and employs almost 100 staff.
The interviewee : Chris Eade
Chris is the Chief Executive Officer and founder of Lifebroker. He founded the company in 2003 in Australia.
Chris has grown that business to one of the largest life insurance brokers in Australia and has also expanded into the UK.
Chris is on LinkedIn
Q:When was the decision made to focus solely on the individual Life Insurance business?
Lifebroker was established on the strong belief that by specialising in life insurance, we would be in the position to become the market leader. This means we concentrate all our operations, planning, systems and technology to offer a specialised service and expert knowledge in the life insurance space.
By focusing our efforts on life insurance, we are also able to extend the reach of our service through our partners, including mortgage brokers and on-line comparison portals, helping us connect with a wider client audience. These partnerships would be restricted if Lifebroker wasn’t a specialist and provided a broad range of insurance products, as we would be seen as a competitor, rather than a partner.
Q:What is the approx. size of your business? How much larger is it now than say 3 years ago?
In the past three years, Lifebroker has seen an increase in active clients of almost 40% and now has almost 20,000 clients.
Lifebroker has experienced strong results in the last financial year and has established itself as a leader of the on-line space as well as market leader in alliance partnerships. We’re extremely proud of these results.
Q: What are the acquisition channels you have (own site, comparison sites, worksite, referral, cross-sell etc.)?
Lifebroker operates through three key channels. Our major channel, which makes up 70% of our operations, is Lifebroker Core. This channel services the clients who have made a direct enquiry through our own marketing efforts.
We have also established a network of Mortgage Broker Alliances, where our clients are referred to Lifebroker by their mortgage broker. We are proud to have headline agreements for our services with most of the mortgage aggregators in Australia.
Finally, we have a number of Digital Alliances, which range from full website integrations to simple lead agreements with a wide range of websites and comparison portals. The most prominent of these alliances is Comparethemarket.com.au, where Lifebroker powers the life insurance and income protection sections of this site.
Q: What percentage of customers complete the process completely on-line? What have been your key learning point about on-line applications?
A strong team is extremely important in the application process, as most clients prefer to complete the application over the phone rather than on-line. Over the phone, our consultants can walk the client through the process and help with any questions they have along the way.
We also have a small UK operation, Lifebroker UK, which by comparison sees 30% of its applications completed on-line. This isn’t unusual overseas and, although the on-line behaviour of Australian consumers is different, it continues to evolve and I believe we will see the number of on-line applications in Australia grow over time too.
Q: What regulations apply for people selling over the phone in Australia?
We are regulated by the Australian Securities and Investments Commission (ASIC) and must hold an Australian Financial Services Licence (AFSL) in order to operate. Compliance is quite strict in Australia, however, our systems and processes make working within these regulations easy for both our staff and clients.
Consultants can only provide information to allow their clients to make an educated decision to meet their insurance needs; we are not allowed to provide advice to clients. To ensure that we work within our compliance regulations, all staff receive thorough training as well as a RG146 qualification before they begin working with clients. Staff also receive on-going training when compliance changes are made, to ensure that all consultants are confident in all the regulatory requirements they must abide by.
The nature of this industry means that we are constantly adapting to new regulations, for example, a wide range of changes came into effect on 1st July 2013 through the FOFA reforms (future of financial advice). For us, a highly regulated industry has a positive effect. It inhibits operators who don’t have their clients’ interests in mind and ensures potential clients are confident that we work within a closely regulated industry, protecting their interests.
Q: What are the key success factors for people to sell insurance over the phone?
Lifebroker’s success can be attributed to strong client service, it really is as simple as that. We make the process of purchasing life insurance approachable and as efficient as possible. We are reliable and do exactly what we say we are going to do for our clients. If a client wants to receive a call back in two days or two hours, we call them back on time and work within their schedules and needs.
Q: How do you make your consultants successful? How important is recruiting the right people versus training them well?
It is a combination of recruiting the right people as well as providing comprehensive training. We look for passionate people, who are invested in providing quality service. We want them to dive right into training and be engaged from the outset.
We also provide rewards and recognition for innovative staff and staff who provide best practice service, which in turn contributes to Lifebroker’s growth and development as a business.
Q: You mentioned there is a trend towards people wanting to get more information on-line. How have you responded to this trend?
Lifebroker has focused on its website content for a number of years, to provide people with easy access to the information that they need about life insurance. We tap into our team’s vast industry knowledge, to provide a comprehensive range of information on our website. By supporting our clients right from the research phase of the purchase process, we start to build a trusted relationship even before the client requests an insurance quote.
Last year we launched the Ask an Expert section of our website, which provides clients with another avenue to seek information. Ask an Expert allows the public to submit a question about life insurance on-line and our team of experts provide a comprehensive response. The topics we have covered are as broad as life insurance for professional athletes to your insurance options when pregnant.
Q.What have been the most effective approaches for cross-selling (e.g. email with call, call with email follow-up etc.)?
Since Lifebroker has been in operation for a number of years, we have developed a significant pool of data, which helps tailor our client communications depending on their inquiry. Using this data, we know that particular client demographics (for example, clients of a certain age, occupation or income level) are more likely to apply at certain points after the initial inquiry has been made. Our system tailors the follow-up process for each client to match the ideal scenario, which is usually a mix of outbound calls, emails and SMS interactions. We know there isn’t one approach that will fit all clients, for example, we may only follow-up with some clients through electronic channels, and our processes have been designed with this in mind.
Q: How has your business changed with the increasing use of mobile devices? What are you doing differently?
A number of years ago we created the Lifebroker mobile site as the shift towards mobile began. This site was designed to be simple and effective, with a key call to action that invites the client to receive a quote from Lifebroker.
For shorter communications with clients, we use SMS to confirm calls, information or appointments.
We are also examining the potential of an app for our clients but given life insurance is a single purchase product, which is usually held for a number of years, we are trying to determine how an app could best serve our clients.
Q:Do you have a physical sales force that can meet clients face-to-face?
Apart from our Mortgage Broker Alliances, our communication with clients is mostly through email or phone calls. Our service has been designed for convenience and works around our clients’ busy schedules; whether it’s after work hours, after the school drop off or on the weekend, they can contact us.
Q:Do you allocate clients to a phone advisor?
Strong, personal service is core to our business, so every client is assigned to a dedicated life insurance consultant, and a dedicated Client Service Officer (who is the administrator on the policy) to guide them through the process.
Q: How many people do you have in selling activities and how many in servicing activities?
Lifebroker is based in Melbourne with close to 40 staff in selling activities and assisting our clients with their applications, from the initial quote to when their policy goes into force. We have dedicated teams of applications, revised terms and claims specialists to ensure our clients are supported at every point of the process. A strong support team, including the Alliance team, also services our Mortgage Broker and Digital Alliance channels.
Q: When you first started did you find it hard to find insurers willing to sign up as providers?
Surprisingly not, our insurance partners have all embraced our strong business model because it provides another avenue to source new clients. Many of our insurance partners do not offer their services direct to the public, so we introduce new audiences to their products.
Q:What do you see as the key trends that will impact your business in the next 3-5 years?
Obtaining comparison quotes within the digital space is still a young concept in Australia and, in the next few years, we are likely to see a strong increase in applications being completed on-line.
Much like the UK and South Africa, Australia is likely to see a range of lifestyle products launch into the market. These products will provide rewards for clients that invest in a healthier lifestyle, for example, there will be rewards for clients that invest in a gym membership.
Q: What do you see as the challenges to expand into other markets in the Asia-Pacific region?
As we expand into international markets, it is essential to be aware of the regulatory requirements and cultural differences of each country. For example, some countries have a strong emphasis on face-to-face interactions when discussing life insurance, rather than the convenience of online enquiries.
Q: What opportunities do you see to extend into other lines of business e.g. non life, wealth products?
As a specialist life insurance business, we don’t have any current plans to expand into other non-life wealth products. We want to make Lifebroker as strong as possible and enjoy business growth doing what we do best.
Q: What are the core IT systems you use? Are they in-house or third party solutions? Which are of particular value
Lifebroker operates under a combination of IT solutions developed in-house and via third parties. Whatever product we use, it is tailored to our specific processes and is used to continually improve our excellent client service.
Q: Can you expand on the IT systems you use? In particular which systems are of value to you?
Lifebroker has benefited from having a CRM which directly integrates the website, as well as all our affiliate websites, into our workflow system. This instantly delivers quotes and contact requests to our workflow managers for allocation to a dedicated life insurance consultant. This electronic interface reduces the time it takes to contact clients so we often surprise customers with a call, speaking to the client while they are still looking at the quotes on the website and initiating the conversation while the client is still in the right mind set to speak about life insurance.
Essentially, our IT systems have been designed to make the application process as seamless as possible.
Concluding Thoughts from The Digital Insurer
Lifebroker is a great example of entrepreneurial endeavour to create a digital business model in a very focused niche of providing pure protection policies. It has a role to play in those countries where the investment component of life insurance has been ‘unbundled’ from the pure protection. This trend has not yet been established in the face-to-face markets that dominate in most markets in Asia. The business opportunity is open to those who are able to test and customise models similar to Lifebroker that can work in each market.