The Comparative Rating Revolution: An Agent's Story

Comparative rating systems may seem ubiquitous in the 21st century as they’ve been around for more than three decades. Many independent insurance agencies rely on their efficiency every day.  

But have you ever stopped to think what it was like to sell insurance before there were raters?  

Comparative Quoting in the 1980s/1990s 

In my first insurance job, there was no computer on my desk. On my first day, I got a catalog rack and about 20 manuals to read, study, tear, and insert in plastic sheets. Everyone at the agency had a Merritt Manual to look up vehicle symbols that had the occasional update (replace pages 40-43 with this insert) along with a calculator and phone.  

When a client called in, we did everything possible to get them to come into the office with their MVR and vehicle registration. Yes, we sent people to the DMV before coming to our offices. Imagine that? 

Once you had a prospect, you had to research four areas in the manuals. Their territory by way of their ZIP code. Their car aka symbol. Their class, which included sex, marital status, etc., and was usually related to driving experience. Last was any points (tickets or accidents) on their record.  

After your research, you made several calculations with that handy calculator to determine a rate. You then calculated the payment plan by premium financing the policy. Then once the premium was agreed upon, you handwrote the application and could not use white-out.  

Also, if you ever made a mistake on the effective or expiration date, you had to start over. My first client took three hours to write. Veterans could write clients in one hour, sometimes 45 minutes, if previously quoted.  

After all of this, there would be times when you “blew the rate.” What did that mean?  

You missed a factor or used an incorrect calculation somewhere, and the office underwriter would red ink the application like a high school English teacher. And you’d have to go back to the client to break the great news about the rate changing. Then it was back to shopping other carriers, research, manuals, calculators, handwriting apps. You get the picture.  

Once the application was written, photos were taken, money received, you had to bind it one of three ways: postmark, fax, or phone binding. You’d call a toll-free number and enter a driver’s license or other data points. Then, you’d get a confirmation number and had to mail it within 24-96 hours, depending on the carrier.  

Or, you faxed the application, printed a fax confirmation, and added it to the file. Then, you mailed the application to the carrier. (We used to mail dozens of envelopes daily.) Accounting had to draft a trust check and deposit the insured’s money. It would take up to 30-45 days for policies to get issued, even policies with zero uprates or problems.  

Introducing the Comparative Rater 

One day in 1991, the agency announced that when we have a four-car risk, we could use what they called a comparative rater.  

Rather than making us manually rate four cars, we could enter it in a computer. The keyboard clicked loudly, and the monitor took up an entire desk with only 13 inches being the actual screen. But it was awesome! After 15 minutes, you could print the quote on a dot matrix printer (that seemingly took another 15 minutes), and you were off to the races.  

About one year later, we all received our own computer for rating a policy. We reached the point where we had computers on every desk in the office. Yet we weren’t networked. So, when someone called in, you had to find out who they spoke with and go to that person’s computer to find the quote.  

A few years later, everyone in the office could see everyone’s quotes, and we had a network printer. Modem binding became the new fax or phone bind, and direct bill was born. Despite the modem bind, we still had to mail the application with a trust check and have it postmarked within a specific period. This was the insurance business in the late 80s and early 90s.  

Finding the Best Rate Today 

Since we manually rated, we never “knew” what company was best. For anyone to say they know what carrier is best for a client is to say you’re an actuarial genius with a photographic memory.  

You might have an idea, and you might be right six or seven times out of 10. But 100% of the time? No way. Going to every single carrier website is merely the modern version of what we did in the 80s and 90s.  

The other part to the inefficient manual process of old was manually filing computed quotes in accordion files so we could retrieve the information when needed. This is much like checking multiple carrier websites to find previous quotes today. Entering the same data several times into carrier websites is a waste of time, and it lowers close ratios.  

Modern consumers don’t have time to wait. They want their quote now.  

If we’re being honest here, if you don’t have a comparative rater for your personal lines, you’re doing your clients an injustice. Because you never know who has the best coverage for the best price for every risk you speak with. It’s impossible unless you’re a captive agent.  

A comparative rating tool does several things for you: 

Saves you time! 

You only have to enter data once for as long as the insured is with your agency. You can also re-shop quotes at any time. Endorsement, you can shop. Renewals and rewrites are a breeze when the data is in a comparative rater.  

It used to take hours if you blew the rate. Now it literally takes seconds to change coverage, reassign vehicles or swap a named insured. 

Makes your job easier and more efficient! 

Binding is a cinch. Click a link, and the carrier website opens with all quote data prefilled. Answer a few warranty questions, and you’re binding in seconds. (Remember we used to FAX or MAIL applications in for binding?!) 

You can print evidence of insurance for escrow, ID cards for auto, and fill in ACORD forms when you need to submit business to excess and surplus lines brokers or MGAs. 

Also, you can avoid double entry by bridging that policy into your agency management system. If you need to requote in the future, bridge from your management system to your rater for the most updated rating information.  

Shows your value to your client! 

Independent agents have always represented not only choice to the consumer but a good price. The accuracy in a comparative rater is second to none because most quotes are real-time, meaning the carrier provides them to the rating vendor.  

A comparative rater will display pay plans and quickly sort the quote by down payment, annual premiums, limits, deductibles. One carrier may have the best annual price, but another may have more favorable terms. Insureds love favorable terms. 

Makes it easy to remarket! 

Back when I was a young agent, if we didn’t sell the policy, we would sometimes send a postcard to the prospect. It was a manual process, and it was only the one follow up.  

Nowadays, comparative raters make it easy to remarket to that unsold prospect by automating a series of follow-ups. This marketing automation is increasing closing ratios for agencies as they’re getting in front of those prospects multiple times after providing a quote. 

Gives you insights into your agency! 

Comparative raters do more than quote a policy. You can run reports and see where your business is coming from, what carriers are being quoted, close ratios by producer, location, or carrier, and many other valuable metrics.  

As a young agent, I would have loved the efficiency and speed a comparative rater would have brought to my sales process. Don’t take this technology for granted. You may save money going directly to a carrier to get the rate. But, being able to spend more time with your clients or sell more policies because of the time saved makes the return on your comparative rater investment good for your agency.  

Looking for a comparative rating tool? TurboRater enables you to do everything listed above and more! Plus, no long-term commitments are required. Request your quick, hassle-free demo today

About the Author

Zach Weeks

As Content Marketing Specialist, Zach Weeks manages and implements ITC's marketing efforts, spanning customer communications, social media, content, and email marketing. He has a bachelor's degree in editing, writing, and media from Florida State University. Zach enjoys sports writing, competitive gaming, and spending time with his family and pets.

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