We’re in a hardening market. The highs are high (more revenue!) the lows are low (explaining the cause in a difficult economy of the rate increase). However, any market change is an opportunity.
The agencies who capitalize on this marketplace will see it as just an opportunity. Now, you may think I’m crazy (and I probably am), but I love a hardening market.
The agencies I have worked with that have been making renewal calls will get more questions – am I properly insured? And less – you people keep raising my rates. They are ready to take on the additional inbound quotes while managing the current book.
Bottom line – these clients will get referrals from their existing customers because they have been doing the right thing and have built relationships with their clients. Many insurance agents would have loved to start proactive renewal reviews three years ago.
However, since we do not have an insurance crystal ball, there is no time like the present! Now is their time to reap the benefits of their hard work.
The agencies that have not been putting in the proper work will suffer.
- Lower retention
- Lost customers
- Too much reshopping
- Sloppy work and E&O Issues
- Burned-out team
Doing the hard things always pays off. As some of you read this blog, you will be stricken with FEAR, UNCERTAINTY & DOUBT.
Remember that you are reading this blog because you want guidance on communicating insurance price increases. Your instinct may be to do nothing because choosing to do something will be challenging, and uncertain and may cause more hardship.
Doing nothing means you let the rate increase control you! Don’t let this insurance price increase ruin your opportunity.
Why Your Agency Needs To Communicate Insurance Price Increases, Proactively
Let’s imagine this. You are a teacher and married to a nurse. Times are tight, and raising kids is expensive.
The Christmas credit card bill comes in, the increased heat bill appears, and one kid needs braces. The world can seem helpless. Then your insurance renewal comes in 15% higher!!!
Your client thinks
- I had no tickets or accidents
- How are we going to pay for this
- Why is this happening to me???
Now billions of dollars of marketing have been hitting your clients. They think, let’s shop for our insurance.
They get sucked into an online portal, pick their coverages, and like magic, that rate comes back way less than what the couple is paying today.
Ohhh, and they can bind right there and then.
But they don’t call your office. The first thing on Monday is spicy. You offer to shop their policy, but then this happens:
- There is a backlog of reshops, so it goes in the pile, and it takes four days to get back to them.
- The online quote they received they are calling and enticing them to come over.
- You ask for a copy of the quote because clearly, they must be incompetent to quote their insurance (see the 3 Minute video on why this can be insulting!)
- You call them and let them know the great news you can save them $300 – but they think how long I have been overpaying? Why did I have to ask?
You have to embrace the idea that proactive is ALWAYS better than reactive. Now, getting a proactive strategy can be difficult, but this blog will help you get your start!
Also, your job is easier when there are no competing quotes.
One more note, when your client gets a quote from a competitor – they don’t give up.
They target them year after year. Your client is vulnerable. You saved it this year, but you have to work hard for the next several years to keep the competition at bay.
Your Strategy: How to Communicate Insurance Price Increases
Who is ready to get your playbook on how to communicate insurance price increases? Yes, you!
In this section, we highly recommend you take on all strategies. However, something is always better than nothing!
Pick one and address it every month or quarter. Whatever you do, pick the hardest one – don’t judge them! You may want to do the easy stuff, but the hardest one on this is the one that will give you the most value.
Using Blogs, Email & Social Media to Educate Clients on Insurance Price Increases
One strategy I think is great is educating your client as to what is causing insurance price increases. Many people think the rate increase is personal, and it’s only happening to them!
When your client is better educated, they become a better client for your agency. Let’s get the message out and about.
Remember, most people can handle the rate increase; they just want to understand why. When people call into your office and ask about the rate increase, remember it’s just a question, not a demand to remarket.
Using Blogs To Educate
If your agency is not blogging, why? Sure, it’s overwhelming at first, but it gets better. Blogs are a great way to get your message out to:
- Google searches – when the world sees you as an authority, people want to do business with you
- Using blogs on social media or blogs – you can drive the message back to your website
- It gives your clients something to read and share
- You can add videos and other resources as links to the blog for more context
Blogs are nothing more than an article that can help explain the marketplace. While there are best blogging practices, sometimes you just need to get started and build your muscles as you go!
To get started, contact your website provider for how to add to your blog or get a blog added to your website.
Using Email to Get Your Message To Your Clients
Email is a great, efficient, and fast way to spread your message! Your fear may be that if you email your clients, they will all shop.
I’m here to remind you of the following: people take the path of least resistance if they are going to be upset about the rate. They are far more likely to call you rather than your competition.
This is a good thing. Remember, we are in the relationship game – communicating about rates helps us build relationships.
- Email your clients your blog and or video
- Have a call to action to book a review
- Add in outside articles for context and clarity
- When people call in, you can forward them your email or blog to share the information with them
The bottom line is, you get to clarify the message and educate your client. You control the rate increase narrative rather than the insured.
Using Social Media to Educate Your Client
Social media is here to stay; we can use it to our advantage! It’s an opportunity to have some fun, be authentic, and share what is happening in the marketplace.
You can have more fun on social media to make the message interesting to your community.
- Use video to share your message
- Identify three reasons your rates may have gone up
- Share stats from the industry
- Counterbalance it with contacting us for a review to maximize your discounts
Using social media, you can have a two-way conversation on rate!
Just Do It. Make the Phone Call For an Insurance Renewal Review
If this is your first interaction with APP welcome, you will quickly learn we believe the cure for every insurance challenge is proactive renewal reviews.
If you are a long-time reader and not getting alignment on renewal reviews, now may be the time! Also, our online course on How to Reduce Remarketing offers a special discount for you.
Insurance agencies run one of 3 Models around insurance price increases:
Wait & See Model
In this model, agencies run from the idea that the clients will call them and then they will react to rate discomfort.
Many agencies use this model either out of fear or to poke the sleeping bear, or they aren’t sure any other way (mainly because agencies feel overwhelmed as is).
We discourage this model because it’s causing way more work and a difficult client experience and won’t get your agency ahead. If you are running this model, you should check out our training on how to handle a rate increase, so your team has the scripts and strategy they need.
Shop Till You Drop
Many agencies practice this model. This is when there is a trigger of some kind, generally a dollar amount or percentage increase, and the team is triggered to take action. That action could be one of the following:
- Remarket based on older information and call/email the client to let them know you have an alternative
- Contact the client alert them to the increase, and review the account with them
You guessed it I’m a WAY bigger fan of #2. Agencies that automatically remarket have challenges.
- We don’t have updated information
- We can’t cross-sell
- We don’t know if they want to be remarketed
- It’s a lot of work, and you won’t get everyone on the phone
This strategy makes it all about price. We call you when the rate increases rather than we call you to make sure you have the best value and coverage. Let me be honest, it’s better than nothing, but it’s still not developing the relationship you are striving for.
Proactive Renewal Review
This is the way to do it! Get proactive.
Imagine every client is called yearly for a proactive renewal review to build the relationship, educate the client and identify the best plan together.
When you call the client proactively, you can communicate the rate increase to the client.
I know you think every client will demand to be shopped or they will shop.
I also know this is based on fear! Our stats show the opposite. Your remarketing will drop, and your retention will increase.
Now, there are always a few people who are upset, but far fewer than the other models.
Your team will need scripts on what to say, so we are giving you our favorite scripts for FREE! This will help your team feel more confident and comfortable.
Many agencies have us assist them in getting their team to be proactive with our Renewal Review program. Be sure to check it out and book a meeting.
Tools Your Agency Needs To Communicate Insurance Price Increases
Your agency may need a few tools to get these communication strategies down pat. Here is the best news they can all be used for other purposes!
- Camera (Phone or laptop works!) to shoot videos
- Email tool
- Rate Increase Scripts
- Training for your team on how to handle rate
- Renewal Review strategy and checklist
At APP, we have these tools for you and your agency feel free to reach out!
Conclusion on Insurance Price Increases
We know some of these concepts may seem overwhelming or even a bit scary. That’s ok!
Doing nothing is far more dangerous. Our concern is that your team NEEDS training on what to say, how to say it, and how to control these conversations.
Much of agency fear has to do with a lack of team training and confidence – so it’s scary to get out in front of it.
Training is something every agency needs to embrace. Your staff is your biggest investment, and it needs to be tended to! Invest your time and resources (or partner with us!) on training your team.
I wanted to leave you with a few training options that may work for you:
- Use our blogs in your team meetings to help convey your message (almost all blogs have videos too!)
- Consider our online school where you can take a lesson together during team meetings
- Consider having us work directly with your team!
We hope that this blog has given your agency some solid strategies on how to communicate to clients about insurance rate increases.
When you think about what to say come from the heart, provide the client with valuable knowledge, and provide the information with confidence and the outcome you desire will become present.
The bottom line is you’re not alone! We’re here to help and train your team on how to have effective conversations with your team and clients. Check out our options so your team is empowered to have conversations with clients that are coming to your team every day.
Have no fear APP is here to help you identify how to run an insurance agency to have your agency serve you, your team, and your family.