Are you wondering how the insurance hard market vs. soft market will impact your agency’s retention? I’m here to tell you it absolutely will. This may seem counterintuitive — when rates decrease, don’t clients shop less? Actually, the answer is no. We have several landmines to work around to keep retention on track. The reality is, word gets around that friends, family, and colleagues are saving — and your clients want the same.
In addition, your clients’ information is already in your competitors’ databases, and they’ll use it to grow during a soft insurance market. That’s why you need a retention plan that’s even more robust than during a hard market. In fact, many agencies and carriers reported higher retention in hard market conditions simply because there was nowhere for clients to move. Let’s look at how you can master retention even in a soft market.
Tracking Retention
In an insurance hard market vs. soft market we recommend you really adjust how you track retention currently. You need to see different angles of the retention metric.
Here are our recommendations and why:
- Review a Monthly Retention Rate vs. a 12-Month Rolling Rate: If you’re looking at 12 months of data, you won’t see the impact as quickly. I prefer to live in the truth — your retention rate may show a gradual decline if you’re tracking premium and revenue retention. Looking at it monthly helps you stay closer to what’s really happening.
- Review Policy, Premium, and Revenue Retention: Each of these numbers tells a different story. Policy retention will usually be higher, while premium and revenue retention may trend lower. If you see policy retention drop, you know you have a significant problem on your hands.
Each management system may handle retention differently, but you can track it on your own. Make sure your team is coding rewrites accurately and updating mid-term cancellations so the expiration date reflects the last day of the policy. Here’s a quick basic calculation you can use.
(# of renewals for that month) – (# of lost policies for the month)/(# of renewals for that month)
Using Renewals to Grow
So many insurance agencies think of renewal reviews as service work — but they’re actually growth work. Your agency needs to train your team and provide checklists to support skilled renewal conversations. Too many agencies avoid renewal review calls because they’re afraid the client will shop. In reality, that’s far from the truth — as shown through our Agency Retention program.
You can also become Insurance Nerdy and beef up your team’s coverage knowledge with our How to Explain Coverage Program.
What if one phone call could help with all of these items (kind of like penicillin – renewal reviews are an insurance agency wonder drug)?
- Update Contact Information
- Encourage Automated Payment
- Boost E-Policies
- Allow Your Client to Ask Questions
- Better Educated Client
- Cross Sales
- Coverage Increases
- Reduced E&O Concerns
- Improved Claims Experience
- Reduced Remarketing
- Referrals Generation
- Update and Clean Up Your Management System
This is truly the best way to handle so many agency challenges. It just takes a solid plan and some training. How else can you tackle all of this in one call?
Don’t Poke The Sleeping Bear
When I first started visiting agencies, I was shocked that many didn’t do renewal reviews. When I asked why, I often heard, “We don’t want to poke the sleeping bear.” Meaning — if we contact our clients, they’ll shop. I found that mindset peculiar. If the client remembers we exist, they’ll leave? That’s a scarcity mindset.
At the time, market conditions were very different. Today, GEICO alone will spend $1 billion on marketing. We need to recognize that, no matter what, the competition will poke our clients. By getting proactive, you’re in the game too — and clients usually take the path of least resistance. By calling first, you have the upper hand.
Your Client’s Information Is In Your Competitions Databases
During the insurance hard market, your clients shopped and tested the market. While they may have stayed because there was nothing more attractive, their information is now in your competitors’ databases. Do you think they’ll just sit on that information? Most likely not.
You need a strong defense to ensure your clients don’t get wooed away by the competition. If you don’t connect with your current clients, they’re ripe for the picking.
Conclusion
The soft insurance market may feel like a relief after years of hard-market pressure, but retention is now the battleground — and the agencies that win will be the ones who stop hoping clients stay quiet and start owning the conversation.
Track retention monthly, turn every renewal into a growth opportunity, and refuse to let competitors poach your book just because rates are dropping. One proactive call can update data, boost coverage, earn referrals, and lock in loyalty — but only if you have the plan and confidence to make it. Don’t wait for the sleeping bear to wake up on someone else’s terms.
Secure your agency’s future—register today for our 4-part How to Manage a Soft Insurance Market Webinar series and get the exact scripts, checklists, and retention playbook top agencies are using to dominate the soft market. Retention isn’t luck, it’s a strategy.
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