Agency Performance Partners


Posted on September 6, 2022 by Camille Maraguinot

How To Handle Insurance Rate Increases

When insurance rates increase, the agency and sales agent (if they are on commission) get an automatic pay raise. This means there are more resources available to the agency to fuel growth.

In addition, when rates increase, there’s an opportunity to talk with the client about other policies you can offer that they may not know they need yet.

When agencies do not have a clear renewal process, clients will feel neglected and start the process of shopping for new insurance. Insurance rate increases either happen to you—or for you.

With the right strategy, insurance rate increases can represent more of an opportunity than a challenge.

In this blog, we’re review the following strategies:

  • Reviewing the “why” of the insurance rate increase
  • Getting proactive on all renewals
  • Having the rate conversation
  • Renewal reviews vs. remarkets
  • Using remarkets as opportunity
  • Organizing your agency around new business when rates increase
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Where Was APP Last Week?

Kelly Donahue-Piro:

  • Assessment – Fond Du Lac, WI
  • Assessment Launch – Kittanning, PA

Heath Shearon: 

  • Carters Insurance – Agency Assessment – Texas 
  • Rock Creek Insurance – Agency 2.0 – Chattanooga TN

Top Reasons Insurance Agents Struggle with Rate Increases

This is a typical occurrence in an insurance agency:

  • You get notified by one of your top carriers that their rate is increasing and pure panic spreads through the team. We all jump to the worst-case scenario and panic. 
  • Clients call in daily and state, “You people keep raising my rates.” This causes the team to go into the scarcity mindset and jump to remarketing rather than having the confidence to have a conversation about the market and insurance rate increases. 
  • You get a list of daily uprates where you get to review and/or call clients and give them the great news that their insurance rates are increasing. Who wouldn’t want to make that call?

If this is happening in your insurance agency—you aren’t special! It happens everywhere. Here are the main deficiencies we see most agencies have in handling rates:

  • There is no clear process: The agency has not developed a clear process, so everyone is doing their own thing. Or, the agency has a process, but it’s not monitored—so people fall behind. Here is an example: the agency automatically remarkets anyone over a X% increase. There is a dedicated team member doing this, but they are backlogged and agents never present it to the client and we are massively wasting resources. (Note: APP DOES NOT recommend the automatic remarket, ever. Too many things change and we need to get comfortable talking to clients about rates, not calling with a cheaper price.)
  • There is no training on how to handle rates: By nature, service team members tend to be more peacekeepers, so discussing rates is overwhelming. They often think about how it may impact their personal situation and they work to fix the rate rather than explore a plan. There is a missing step where we communicate with the client to find out updates, find out what’s important to them, and review the account to find discounts.
  • There is no practice in talking about rates: There may be training here or there, but no one is role playing with the team to understand how to share the information with a client.
  • There are conflicting philosophies on rates: You may say you don’t want to remarket every account, but when a client leaves, the first thing you ask is, “Did you reshop them?” It is critical that the agency has remarketing standards.
  • There is a lack of training carrier discounts: The best place to start is within the current company (after you get updates and discounts). It is very difficult to keep up with 10 carriers, their updates, and all of their discounts. It is important you consistently have cheat sheets for carrier discounts and updates that the team can easily use without much hassle.
  • Cross-Selling is the biggest source of discounts: Monoline policies tend to take the highest rate increase, and for many team members, when they see an upset client, they shy away from discussing the cross-sell. This hurts the opportunity to maximize discounts and markets.
  • Agencies do not have remarketing standards: When you look where your team is spending remarketing time, often it’s your worst customers. Every agency should have a remarketing guideline to politely decline to remarket the clients you do not want to keep.
  • Agencies do not track remarketing: Just like having an agency closing ratio, you need to track remarkets. You should know (and you can in many management systems, check out our Agency Retention Program) how to get a remarketing closing ratio. When the team can see the data, it helps them understand who to remarket. It also empowers leadership to coach team members and celebrate their success!

“Renewal calls help to refresh who we are and what we do for our clients in their minds. It helps us stay on top of the changes in our clients’ lives. It’s the single most important conversation we have with our insured each year.”

Now that we know the common challenges, let’s dive into how to master handling insurance rate increases.

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Insurance Agency Retention

Review the “Why” of the Insurance Rate Increases

No matter how you get alerted to an insurance rate increase (inbound call, rate increase alert, or renewal review) your goal is to identify the why of the rate increase. It is key that the agency help the team accept that not everything is the agency’s fault and/or problem. If a client has purchased a brand new $90,000 truck, they need to expect the rate to increase! Some common rate increase reasons are:

  • Client activity
  • Endorsements
  • Weather
  • Carrier insurance rate increases
  • Business growth
  • Recent claim

When you first get wind of a rate increase, it is critical that you do not panic. All too often there is a reason for the rate increase. Your main role is to investigate the increase and provide options to clients. Whenever anyone is frustrated about ANYTHING, you want to think about what options you can provide. Options empower the client to feel more in control of a difficult situation. 

One of the reasons I love renewal review calls is that it shows the value you bring to the table. You call when times are good and when times are difficult. If a client has had a renewal review for a few years and the rates go up, you have already shown your value. When you only call when there is a challenge, your clients expect you are calling with bad news. 

Getting Proactive on ALL Insurance Renewals

When we share that APP recommends proactively contacting every single client once a year for annual reviews, too many insurance agents’ jaws drop. They think:

  • My staff will walk out 
  • Everyone will want to be reshopped
  • We are poking the sleeping bear

I remember as a young lady in insurance asking why we wouldn’t contact our customers. The first agency owner I worked with stated, “We don’t want to poke the sleeping bear.” I thought to myself, “We are worried if we talk to our customers they will leave? Hmmmmm.”

Our Agency Retention Program proves differently. The reality is—by being proactive, you can achieve the following:

  • 2-3% increase in your retention rate
  • Three coverage increases per team member per week
  • Two sold cross-sells per per team member per week
  • 40% reduction in remarketing
  • 45% contact ratio
  • 93% of staff after six months of being proactive would not go backward

The bottom line is this: When you are proactive in working with your clients, you show value. When you ONLY call when rates increase, you make it about the rate. When you wait until the client calls you—your back is against the wall. Also, think about all the people who don’t call and just shop for you. When a current client calls you with a competitor’s quote, your job is way harder. 

The only way to drive retention and the client experience is to be proactive. Show value annually and work to make sure the clients have the right insurance for their lives and businesses currently. 

The Agency Retention Program is one of the signature APP programs. Don’t recreate the wheel. We have trainers, call sheets to guide the call, scripts, and tracking. 

Script explaining why rates increased when it’s the client’s activity that caused it:

“I see here that you had a speeding ticket in April and it looks like a small accident in June. Do you recall these events? Due to these events, you have lost your safe driver and claims-free discount. Let’s take a look and review your account to see what kind of options you may have.”

Quote from APP Client

“Prior to hiring APP, our retention was 88.6%…ugly. A year after the retention program, our retention averaged 92% and above. It wasn’t easy, and it didn’t happen by chance. Every single day, we had to stick to the program, and every single team member had to get on board. Not just the retention, but increase in sales, Google reviews, and a reduction in remarketing. It’s no secret that the clients need annual reviews. What’s the secret sauce is the workflows, processes, and education pieces to make it happen, and that’s what APP provided. 

Gina Clevenger, Clevenger Insurance

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Want this type of training for your team? We have it in our Agency School:

Insurance Agency Retention

How to Have the Insurance Rate Increase Conversation

Does talking about an increase in insurance rate make you a little cringy? Generally, we have FUD (fear, uncertainty, and doubt). We are fearful that the client will shop, we are uncertain about what to say, and we doubt ourselves and our ability to have a professional conversation on the matter! But we can and we are better than that. 

In today’s marketplace, most people and businesses just want to know why their insurance rate increased. They aren’t looking for you to fix it, but they are looking for an explanation. In order to have a productive conversation about rate, you want to have three main objectives:

  • Show Empathy

“I completely understand, it seems like everything is going up. Electricity, cell phone bills—it’s everywhere. As you may have read, insurance rates are no different. That’s why I’m calling to make sure we have the best information to get you the best value!”

  • Educate the Client

“Rates in our state are going up on average X. The insurance commissioner for the state actually approves the rate increases. However, that’s the value of working with us because we can help evaluate your options.”

  • Use Monthly Numbers

“So let’s take a look at your account. It looks like your rates went up X which is X in relationship to the state average. That would be about X per month.”

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Need to slow down cancellations in your agency? Get our Agency Template on How to Stop a Client Cancellation.

Insurance Cancellations

Renewal Reviews vs. Remarkets 

Would you rather do the automatic remarket or spend time reviewing accounts with clients? For many agencies, the automatic remarket is what has always been done—but let’s review the pros and cons. 

  • Automatic Remarkets
    • Pros
      • You are prepared when someone is upset
      • You can call them with the good news that you have better pricing
    • Cons
      • Incredibly time-consuming
      • Generally, the team falls behind
      • Not all remarkets get presented
      • We aren’t getting updates
      • No opportunity to cross-sell or upsell
      • We make it all about price
  • Renewal Review Calls
    • Pros
      • Find E&O issues
      • Coverage increases
      • Cross-Selling
      • Reduced remarketing
      • Increased retention
      • Better team morale
    • Cons
      • Most agencies don’t have a system 
      • Agencies need a call sheet to follow
      • Agents aren’t trained on what to do or say

Being proactive is the best approach! The challenge is that getting them started is very difficult and the team pushes back on the amount of work they perceive it will cause. The fact is, once the team gets the hang of it, they actually enjoy making renewal reviews.

Opportunity To Explain Insurance Rate Increases

At APP, we approach remarkets as the last tool you use in your tool chest. When a builder builds a home, they use power tools and only use hand tools for finishing work. Too many agencies take too rash of an approach. We see handling rate concerns like a funnel, at the very end, if there are no other options, we move forward with the remarket. 

Every agency needs a remarketing strategy that focuses on updating the account to current agency standards. This means we do not want to quote “apples to apples” (another phrase I personally hate in insurance). Instead, we want to view the time we invest in remarketing as an opportunity to educate and improve the client’s insurance experience. Improvements include:

  • Increasing coverage
  • Cross-Selling
  • Moving the client to a better and/or higher commission carrier
  • Updating deductibles
  • Changing their payment strategy 
  • Earning a referral or Google review

Remarkets need to be carried out with an abundance mindset vs. a scarcity mindset. This means that, as professionals, we can counsel the client on what they need—not just focus on price. You want to think, “if I am going to take the time to remarket, we also want to gain some opportunity.” 

In many agencies we work with, we actually put together remarketing standards. Similar to new business, we vet the remarket. If they don’t qualify, we do not shop them: if they go, they go. Here are some remarketing standards we generally focus on:

  • Payment history
  • Frequency of remarkets
  • Claims
  • Are they kind to the team?
  • Property type 
  • Age

Organize Your Agency Around New Business When Insurance Rates Increase

The awesome thing about being an independent insurance agent is that if your rates are going up, so are other agencies. If you can focus on locking down a spectacular renewal process and give your team the tools and training they need, you can also gear up to be a sales machine.

As rates go up, you need to brand and market the agency at a higher level so you can attract more new business. Assuming your competition has not read this blog or implemented any of the APP strategies, this means they will be scrambling to keep clients and reactively remarketing.

You can trust your renewal process and focus on your new business process to track every lead, cross-sell at the point of sale, and create a client for life. It is worth it to be on the offense rather than the defense and a strong renewal process can let you rest at ease, knowing that your current clients are taken care of and your sales team can focus on gathering up the new business. 


I don’t think any insurance agent enjoys delivering the great news of a rate increase. However, we aren’t alone, accountants tell their clients all the time they are paying more in taxes, and my mechanic doesn’t even blink when they tell me what it will cost to fix my car.

We get kinda weird about the price and rate in insurance. Some of this is because the majority of insurance agents have not built enough consistent value and the agencies have not taken the time to train their teams. At APP, we want to fix this industry problem with our Agency Retention Program. 

Want to learn more about our services?

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