As we move out of the hard market, customer retention in insurance is certainly on people’s minds. Over the past few years, growth has, for many insurance agencies, come from rate, not policy growth. While the revenue is up, the policy count for many has slipped. As rates stabilize, many insurance agencies are trying to strategize exactly how to stop losing clients and stabilize retention.
If you’re in this group, you aren’t alone. So how exactly do we stop losing clients today?
Your first step is to establish tracking. We recommend you start by analyzing lost customers and look for:
- Did you want to keep them?
- Was it mid-term?
- Did you get fired – AOR or BOR?
- Did they move all the policies?
- Why did they go?
- Was there a remarket?
- When was the last interaction with the client?
Strategy #1: Scripts and Process to Stop a Cancellation
There are some common myths in insurance when it comes to cancellation:
- Once the client has bound coverage elsewhere, they can’t be saved
- No one has the money for two down payments…
- When the coverage is the same and the client is saving money, it’s ok for them to leave
Here is the reality: all of these are myths! In order to stop a cancellation, you need to do the following
- Have clarity on what clients you want to go and which ones you want to save
- Identify when someone calls in, are they leaving due to a life change, service, or rate
- Getting a client who wants to cancel to the best person to save the client
- Where possible, if you can requote them over the phone you can save them
- If not possible, require a copy of the policy to cancel the current coverage (it becomes an agency standard to cancel a policy)
- Review that policy for coverage gaps and review them with the client
- Leave in the best way possible to win them back next year
Strategy #2: Renewal Reviews
You want to work on retention in insurance? Renewal reviews are the cure for everything. Did you know renewal reviews solve the following problems?
- Contact information
- Update coverages
- Earn referrals
- Cross sell
- Reduce remarketing
- Reduce E&O exposure
- Coverage increases
- Better educated client
While renewal reviews are challenging to get started, they are worth it. They are more than a retention strategy, they are also a sales strategy.
Here are the top reasons agencies believe in reviews but can’t seem to get it to stick:
- Lack of a clear process
- No training so the team is intimidated by the calls
- Over price sensitivity, so there is a fear of increased remarketing
- Fear that the calls will be ugly
- Uncertainty on how all the work will get done
- False belief in the quantity of calls that actually need to get made
- Doubt that it won’t poke the sleeping bear
Here is the reality: it can be a 6-point retention jump in 9 months, when done correctly. A renewal review is a skilled conversation, and your team needs training to reduce the anxiety that a new strategy may bring to the agency.
Strategy #3: Client Nurturing
It’s very challenging to retain customers if they don’t remember you. By conducting simple email marketing and/or even postcards to keep your name and branding in front of your customers, you will increase your insurance retention. Focusing on keeping in front of your current customers allows you to create the call-me-first mentality. When your clients call you before the competition – it’s a double win.
In today’s insurance technology ecosystem, you can easily send an email out to your clients. Some simple strategies include holiday announcements, birthdays, renewal, when there may be storms or claims issues and agency news. Even if the client doesn’t open the email they still see your name.
Conclusion
Customer retention in insurance is incredibly profitable. Raising retention means that for every policy you sell it has a greater impact. We can’t just simply say the client left due to price. We need to take a deeper dive into the why and how they left.
When you are empowered with clear data you can help solve the problem of retention. If your agency is reactive or automatically remarkets your agency will never be able to hit the top retention targets. The reactive model ensures you are fire fighting where the proactive renewal review model ensures you are fire preventing.
If you need help, that’s why we exist – let us help you get started with our Agency Retention Program.
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