How to Plan and Build an Insurance Referral Programme

Lowers Customer Acquisition Costs

Traditional marketing is expensive. Even to be heard costs a lot. In the insurance industry, where customers are constantly shopping around and lured in with lower sign-up costs, they can become despondent to the same old. 

Referral programmes cut through that noise by turning happy customers into marketers. This happens at a fraction of the cost. For smaller enterprises or leaner teams, this creates a scalable, cost-effective way to grow without burning through your budget.

Higher Conversion Rates

Trust between friends and family often accelerates decisions. Leads that come through referrals convert far more reliably because they come pre-qualified by someone the prospect knows. 

It’s literally the difference between hot and cold. Instead of a cold call or just another ad, new leads via advocacy gain a warm introduction to the insurance company. One will feel like a sale, the other like someone looking out for the interests of those in their personal circles. 

Enhanced Customer Loyalty and Retention 

Referrers have also been shown to stick around for longer. Insurance companies prospering from heaps of advocacy have obviously put a lot of effort into satisfying their customer base. Satisfied customers are retained customers.

What’s more, when a retained customer puts their name behind your brand, they’re  emotionally invested in your success. That connection increases their loyalty, raises lifetime value, and strengthens the kind of relationship insurance companies should always aim to build.

Increased Brand Awareness and Trust

Every referral plants your name in a new conversation. Unlike ads, which people are naturally inclined to tune out, personal endorsements carry weight. They simultaneously expand your brand’s reach and reinforce trust towards your brand. 

After all, friends and family members typically have your best interests at heart. They want the lead to benefit from the exceptional service the insurance company has to offer. Plus, it’s natural for us to enjoy the social capital we gain from recommending something deemed valuable by others. So in that sense it also increases the perceived value of your brand. 

Define Clear Objectives and Goals

Clear goals shape smart design. If your aim is to acquire more customers, increase revenue, or enter new markets, remember to use SMART goals.

Identify Your Target Audience

Since referrals tend to come from the happiest customers, metrics like NPS can help pinpoint your strongest promoters. Customers that you score a high NPS with are most likely to share their positive experiences with new leads. Once you identify these individuals, incentivise them to make a referral.

Define Referral Incentives and Rewards

It’s one thing to calculate the cost of a reward—it’s another to choose one your policyholders actually care about. While gift cards and policy discounts are popular, the most effective incentives are tailored. 

Dig into your customer data. What kind of cover do they have? What might make their policy more valuable or affordable? For example, someone with home insurance might respond better to a discount on anti-theft devices than a generic voucher. The more relevant the reward, the more likely it is to drive action.

Determine the Programme Structure

There’s quite a substantial amount of research that companies usually have to undertake to choose a structure that supports their strategy. You need to consider whether rewards be immediate or delayed? One-time or tiered? One-sided or shared? The right format balances simplicity for users with alignment to your business goals and customer behaviours. 

But to help you speed up this process, we’ve written an article on the ten types of loyalty programmes. Each one looks at suitability with regards to business goals and objective, demographics, sector, and implementation challenges.  

Use Referral Software to Track, Manage, and Automate 

Manual tracking is cumbersome and prone to mistakes. At Propello, we recommend Investing in referral software, tailored specifically for the insurance sector. This could be part of a loyalty platform like Propello’s. 

The main thing it should do is handle tracking, automate reward distribution, and provide real-time data so you can spot what’s working and what’s not. All this should be ticking over in the background but running smoothly for your customers and staff. 

Make Your Programme Easy to Use and Understand 

Clarity always beats cleverness as recent studies have shown. For your referral programme to be successful your customers must be able to use it. If they don’t know how to join it or make referrals they won’t bother. 

Test everything, including your UI and make sure instructions use plain language. Equally as important are the amount of steps it takes for an advocate to make a referral. There should be as few as possible. The simpler the experience, the higher the participation and conversion rates.

Ask for Referrals at the Right Times 

It’s often said that referrals are the ultimate expression of loyalty. For insurers, who traditionally relied on acquisition-led models, higher retention may be perceived as an automatic opportunity for referrals. Ripe for the taking. However, in brand advocacy, timing matters. 

Ask for referrals during moments of high satisfaction. This is often after positive feedback, a smooth claims experience, or at the policy renewal. Customers are more likely to recommend you when they’ve been asked at a point in the journey that feels natural. 

Promote Your Referral Programme on Marketing Channels

Visibility starts with integration. Every channel your company has, from your website, social media channels to landing pages and emails, should feature your referral programme. Your customers should see references to your referral programme across all touchpoints. The more naturally it shows up in the customer journey, the more likely people are to notice and act.

Encourage Employees to Promote the Programme 

Your team is perhaps your strongest asset. Therefore, train staff to mention the programme during conversations with policyholders, especially at high-trust moments. When employees advocate for the referral offer, it feels personal and participation tends to follow.

Use Social Proof to Encourage Participation

Highlight testimonials, success stories, and real rewards earned through the programme. Seeing that others have benefited builds credibility and encourages hesitant customers to join in.

Craft Compelling Referral Messaging 

Focus on what’s in it for both the referrer and the referred. Your messaging should be clear, concise, and always contain benefit-led language. Highlight the ease of sharing unique referral links (or the referral process), the value of your service, and the mutual reward. A good referral should feel like a win-win.

Continuously Improving Customer Experience and Satisfaction 

At the foundation of every successful referral programme are happy customers. To maintain that happiness, always prioritise:

• Consistent service quality.

• Personalised interactions.

• Frictionless support across all touchpoints. 

Customers that genuinely enjoy engaging with your brand are far more likely to recommend it. Ongoing investment in experience makes referrals more natural, frequent, and credible over time.

Offering Additional Incentives for Top Referrers  

The best way to make your loyal advocates stick around is to make them feel valued. You should try introducing loyalty initiatives that acknowledge highest-performing referrers. Try strategies like:

• Tiered incentives

• Milestone rewards

• Exclusive perks

Public recognition or VIP benefits not only encourage continued participation but also cultivate a sense of brand community. Rewarding advocacy at scale boosts both retention and referral volume long term.

Encouraging Referrals Beyond Policy Sales

We’d recommend not limiting rewards to policy conversions. Incentivise referrals that also lead to quote requests, consultation bookings, or demo completions. You can scale the value of rewards and even limit them. That way, advocates can’t “game” the system, redeeming rewards for endless amounts of quote requests, for example. 

Instead, limit your most valuable rewards for when the new lead your advocate brings in purchases their insurance product. To incentivise the highest number of referrals as possible, don’t limit them. That way your advocates will always have something to aim for. 

When you expand rewardable actions, it lowers the barrier to entry and encourages broader participation. It also generates more leads, deepens funnel insights, and creates multiple paths to conversion for your referral programme.