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  1. IA Advantage Blog
  2.  » Leads vs. Referrals: What’s Better for My Insurance Agency?

Leads vs. Referrals: What’s Better for My Insurance Agency?

Leads and referrals can be confused with each other. Make sure your insurance agency knows the difference between these online opportunities.
Published: June 27, 2022
Leads vs. Referrals: What's Better for My Insurance Agency?

A newcomer to the insurance industry knows learning the lingo is like picking up another language. Between beneficiaries, deductibles, and BOP (business owner’s policy), it can be easy to get lost between the lines remembering every definition.

A common confusion we see from agents during our demos is this: what is the difference between leads and referrals? Both are insurance terms and are often used interchangeably but have drastically different meanings. Here’s why knowing the difference means so much to your agency.

What Are Insurance Leads?

Leads are often considered to be any means by which your agency lands business, but often, that isn’t the case. Leads are essentially a list of contacts who may or may not be looking for coverage. In many cases, leads come from local records to help agents target consumers who have recently bought houses, cars, or made any other significant life changes. The contact may not know why you are trying to reach them and may not recognize your agency, limiting your close ratio and narrowing the scope of willing, local prospects you could be working with.

Leads are most comparable to cold calls and don’t come with personal endorsements. In short, leads can be a gamble and may take extra time and energy to close, and many consumers will not answer a number or agency they do not recognize. It’s easy to overspend on leads that don’t return a satisfactory ROI (return on investment) and, according to, leads only return about a 20% lead-to-close ratio.

What Are Insurance Referrals?

Like a lead, referrals are contacts given to an agent, but they don’t come from just any source. Referrals can be word-of-mouth or come from a trusted insurance referral site—like—and target consumers who are actively shopping for insurance and have expressed interest in finding coverage. In the case of a referral, the consumer is more willing to speak to an agency because they are already in the market for insurance on their own accord.

While not every referral is a guaranteed close, the close ratio for referrals is typically higher, around 50%. Referrals do come with a personal endorsement, whether that’s another consumer or another agency, which help consumers feel more secure in their choice to find coverage. Because there is no chasing the consumer with a referral, the energy you put into it is more likely to reap some reward without demanding the hours to produce a quality lead.

At, we deliver local, high-intent, appetite-matching referrals guaranteed to suit your agency’s preferred business appetite. We do this by means of our Appetite Engine, the smart algorithm we use to accurately match hot prospects with independent agents. See how our appetite engine works here.

What Are Claim-it Leads? also has a leads program—not to be confused with your standard lead generation site. With Advantage Professional, your agency gets access to what we call Claim-it leads, which are a sort of cross between regular leads and personally endorsed referrals. These are hot, high-intent leads from consumers who have expressed interest in working with an agency but did not select an agency from the agency results page. Claim-it leads are sent directly to your agency’s email and are available for purchase on a first-come, first-serve basis, meaning your agency will never have to compete for hot leads.

How Can I Get My Agency Referred? is not a lead generation site. We connect independent agents with online prospects through our dedicated team of SEO experts, with our Appetite Engine matching consumer needs to agencies’ preferred business lines, and by referring our agencies to the appropriate consumers. You can get your agency started raking in the referrals by subscribing to Advantage and loading your online profile with all the information local prospects will be looking for, like…

  • Logo and location
  • Business hours
  • Five-star reviews
  • Team members
  • Links to your site and social assets
  • Video
  • And more!

Don’t miss out on hundreds of hot, local referrals. Find the right Advantage subscription for your agency, and schedule a demo with a sales representative today to get started. You could be one referral away from your next close!

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