Top Ways to Retain Insurance Clients

Want to have an immediate positive impact on your bottom-line performance? Then implement our top tips for retaining more insurance clients.

Many insurance agents invest more energy in acquiring new customers than in keeping them. That’s unfortunate for two reasons. First, it costs more to bring on new clients than it does to retain them. And second, client retention is the primary factor that distinguishes the most profitable insurance agents and agencies from the lower-performing ones. If you’re not making a special effort to keep your clients on the books, you’re letting money walk out the door.

Fortunately, there are many ways to improve your client retention performance. Here are four of the best practices.

Improve Your Onboarding Process

We all know the power of first impressions. It applies equally to the new-client onboarding process. Everything that happens in the days and weeks after clients receive their policies will either reinforce their buying decision or call that decision into question. For example:

• Once the insurer issues a policy, do you review it to make sure it’s correct? If it’s not correct, do ask the insurer to make needed revisions?
• Do you deliver policies to clients in person (if possible)?
• Once clients receive their policies, do you schedule a meeting or phone call to review key coverage features and how they link to expressed needs?
• Do you provide an information package or website that describes procedures and contacts for the most common service requests?
• Do you share your policy for returning calls within a certain period of time?
• Do you ask clients how they want you to contact them . . . by phone, email and/or text? Do you go over the client communications they’ll receive and when they’ll receive them?
• Do you explain your process for reviewing and updating insurance policies?
• Once you understand their communication preferences, do you enter client information in your customer relationship system to automate further actions?

These are some of the main points onboarding should cover. No doubt there are others. The key is to take the time to welcome your new clients, to make sure they understand what they bought and to explain how to request service going forward.

Cross-Sell Additional Policies

One of the most powerful drivers of client retention is the number of policies owned. Customers with two or more policies will have substantially better retention than those with only one policy. This stands to reason. The more coverage in force, the greater the switching costs will be, either in terms of money or annoyance. Banks know this quite well. The minute you add multiple checking and savings accounts, the more complicated it becomes to switch them to a new bank, especially checking accounts used for automatic payments. Most customers surrender to inertia rather than suffer the pain of transferring accounts. They’ll even accept higher fees (to a point) before having to move accounts.

The same holds true for insurance companies, especially when the insurer has provided multiple-policy discounts. Not only does switching take a lot of time, but it also increases the cost of the remaining policies due to the loss of volume discounts. For instance, J.D. Power and Associates found that customer retention rates average 95% for clients who package their auto and homeowner policies. It’s 92% for those who bundle their auto and rental coverage. The market research firm discovered that retention falls to 85% for customers who only have an auto or homeowner/rental policy on the books. For a large insurance company, a 10% increase in policyholder retention can produce millions of dollars of incremental profit at the end of the year. The same financial dynamic holds true for the agents who sold those policies.

Given the benefit of clients owning more than one policy, try to make cross-selling a deliberate part of your sales process. One way to make sure it happens is to keep your fact-finding relatively high level during the first interview. Probe for needs and wants across multiple risk categories. Then once you confirm a need, move to the next product category and so on. Too many agents stop after they uncover a single need and then immediately drill down on that need. This lets the person buy only one product instead of two or more. It also means future cross-selling will likely take place at the first policy review a year later. If it succeeds at that point, you’ll get to book a commission. But due to the time value of money, you’ll have made less money than if you sold it the prior year.

Conversely, by exploring multiple product needs in the first interview, you can sell as many as possible in the first meeting and then bookmark the remaining products for future conversations. This gives you the benefit of being able to say: “Remember when you agreed that you had a need for X insurance last year? Would you like to address that need now?”

Another way to sell more policies per client is to use your agency management system to identify prospects with an obvious coverage gap. For example, run queries to see who might have bought Medicare supplement insurance, but not final expense coverage. Or those with large homeowner policies but no umbrella liability coverage to protect the full extent of their wealth. The point is, with automation, it’s simple to see which customers haven’t made certain obvious insurance purchases. Why not commit to running these queries quarterly or monthly and then schedule follow-up calls to clients with the most glaring coverage omissions?

Leverage Technology

The goal of implementing technology into your business is to operate more efficiently and effectively while increasing customer satisfaction. The more you do this, the more your customers will appreciate it...and remember it at renewal time.

Start by taking advantage of technology-enabled underwriting, also known as simplified underwriting. By using artificial intelligence, life insurers have been able to dispense with unpleasant underwriting steps such as having blood drawn for tab tests or waiting weeks for a physician to provide a statement. With simplified underwriting, the computer uses other factors as proxies for medical data. This often allows instant or near-instant approvals, cutting days or weeks out of the underwriting process.

Once clients receive their policies, make them aware of the various self-service tools at the insurer’s and/or your website. These might include automatic renewal reminders, getting coverage answers 24/7 from a service bot or setting up automatic payments. The latter is especially beneficial since it eliminates the possibility of clients forgetting to pay their premium and having their policies lapse. Plus, it accelerates premium payment, which improves the insurer’s (and your) finances.

Making sure to leverage the power of social media communications is also important. As part of onboarding, send clients links to your various social media accounts and invite them to friend you.

Embrace Gratitude

Not being grateful for your customers’ business can cause them to defect. Gratitude starts from the moment they agree to buy. Once that happens, send them a thank-you card or email expressing your gratitude for their decision. Also, begin to set expectations about the level of service you commit to providing. To prevent service gaps, always make sure your promises fall short of your capacity to deliver. This will allow you to impress them when your service exceeds their expectations.

Gratitude should extend throughout your customers’ journey with you. Have your CRM generate birthday and holiday greetings, which are perfect times to re-iterate how happy you are they selected you as their agent. Providing small gifts during the holidays or at annual client meetings can also strengthen the agent/client relationship. The stronger it is, the better your retention and financial performance will be.

Develop a Customer Retention Strategy

Adopting one or more of the ideas just discussed will be an excellent start at boosting your client retention. But the best way to have a large and sustainable retention improvement is to develop an overall customer retention strategy. Here are some elements that should factor into it:

• It should span the entire customer journey. Taking advantage of all leverage points, from pre-sale to post-sale, will produce the largest lasting impact.
• It should rest on your full commitment to provide consistent customer service, expressed both in words and deeds. Your customers should know you’re committed to doing whatever it takes to meet their needs for as long as they’re your clients.
• It should be written down. Don’t just give lip service to customer retention. Write down your commitment and share it with your clients and colleagues.
• It should have specific metrics. Defining desired improvements in customer retention will give you targets to strive for. Over time, you’ll be able to compare the prior year’s efforts with current ones. But make sure your objectives are achievable.

Finally, your strategy should incorporate specific actions that will produce the desired retention boost. These steps should be placed on your calendar and also automated whenever possible, so they’re easy to implement.

In conclusion, improving your customer retention can have a significant impact on your bottom line as an agent or agency owner. But it won’t happen just because you want it to happen. You need to commit to an overall customer retention strategy and then perform the actions that will produce the results you want. Good luck!

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