Making It Easy for Prospects to Transfer Accounts

Virtually every consumer-level prospect that you wish to insure already does business with somebody else. This common fact presents a permanent hindrance that agencies have to continually overcome. As you well know, it isn’t always easy to convince people to give up what they currently have for an unknown future with you. To help, this column suggests a methodology that can ease your task of persuasion.

Insurance agents, of course, are not alone in their need to convince someone to cease a standing relationship and transfer their account. Arguably, every professional has to solicit switchovers. Like agents, accountants, attorneys, stockbrokers and doctors must also interrupt established relationships to generate new business. However, this mission is the most apparent with credit card providers.

Mailboxes throughout America regularly overflow with credit card offers, and each one of them highlights how simple and advantageous it is to shift your current card’s outstanding balance to a new and improved provider. These initial low-rate transfer offers are one of the winning formulas in a high stakes, high reward card game. Just sign and mail a special balance transfer check and you instantly owe your monthly payments to someone else. It’s that easy.

Bankers and brokers also make it almost effortless to transfer your stocks, mutual funds and IRAs over to them. All you need do is complete a simple document. And for free (or a token fee), most doctors, dentists, accountants and attorneys will photocopy a client’s files for their professional replacement. All of these pros gain new accounts by simplifying change, and so can you.

Few in the P/C industry specifically target insurance transfer business. Instead, direct marketers and direct writers mainly focus their promotional activity on lower cost to attract shoppers, while the independents tout more choice and better service. These conventional campaigns cause thousands of consumers to change insurers, but they also leave many thousands more entirely unaffected.

Traditional low premium or better service insurance advertising is not particularly effective with the silent majority: those who don’t bother to switch because it involves far more paperwork and effort than it’s worth. Most P/C insurance marketers ignore the value of the easy policy transfer. You can tap into this gap by developing a sales and service strategy that shifts the burden of the insurance transfer process from the prospect to you.

Seize the attention of those hesitant to change insurers by offering more than just a price or service advantage. All insurance marketers claim these as their own and that dilutes their impact. Shout out that you’ll also make the coverage transfer process as painless as possible. The right people will notice.

Focus your marketing efforts on making the prospect’s decision to change a simple one to enact. Offer “instant transfers” to people who meet your underwriting standards. Then make it easy for them to pay. Accept credit cards and offer automatic checking account deductions, whenever possible. And be sure to promise that you’ll be the one to drop the bad news on their former agent. This simple ‘adios’ act terrifies many prospects. Although it’s something that you routinely do for many new clients, few agents consciously use it to their marketing advantage. But most importantly, reassure consumers that you’ll guide them through the maze of changeover paperwork with minimal participation on his or her part, at no charge.

Notifying the other guy is only the first step in the transfer process. New insureds may also need to get back jewelry and art appraisals, driver safety course and alarm certificates, etc., residing in their former agent’s files. They may even need to sign a broker-of-record letter, when they are staying with the same carrier, or be required to notify a mortgagee or other third party regarding coverage and payment changes.

You can make it easy on yourself and everyone else by combining each of these individual requests in a single agency-created document: a Notification of Policy Transfer Form.

This one-size-fits-all form can inform everyone who needs to know about the change. Use and tweak the contents suggested [See sidebar on page N21 for an example.] to design this document for your own office, since it doesn’t yet exist in an official capacity. Each affected party gets a copy of the form with only their section filled out, similar to a Certificate of Insurance. [Tip: Lobby ACORD to create a personal lines transfer notification form to facilitate this very routine activity.] Without such a timesaver, the changeover paperwork that results from a successful new business marketing campaign can easily overwhelm your staff.

In addition to the hassle involved with the transfer act itself, people are hesitant to change companies due to the time involved in obtaining an accurate premium estimate. To many, online quotes are a time-consuming exercise in data entry and phone quotes are seldom willingly provided. GEICO addresses this issue by promising an auto insurance phone price in 15 minutes. You can offer a similarly fast phone or appointment-only auto premium estimates—if your personal lines prospects arrive or call prepared, with most of the underwriting information that you need to generate a premium offer already completed.

An easy way to obtain this pre-quote data is to distribute “quick quote checklists” as part of your marketing. The checklist asks people to have their current declarations page, license and registration on hand when they call or visit. It should also itemize the basic underwriting facts needed to provide a speedy on-the-spot estimate, including the primary drivers of each vehicle, dates of birth, vehicle usage, and claims, ticket, and accident history.

Feature this brief checklist (remember, it’s not an app!) on your Web site, on the back of your personal auto marketing postcards, as newspaper inserts, and prominently on any other auto insurance transfer solicitations. Similar checklists can optionally be developed for homeowners and other personal lines policies, depending on the prospects that you target.

Another consideration in gaining transfer business is to ask your top company, the one that will benefit the most from your switch-to-me campaign, to subject the transfers that this particular campaign generates to renewal underwriting, instead of new business standards. This preferred treatment allows you to apply more liberal pricing, waive some inspections, and use abbreviated application procedures.

It is unlikely that companies will go along with this for a variety of reasons, but if there is any leeway in the system that allows you to use this book transfer approach to new business underwriting, go for it. Providing your carrier with a marketing plan complete with adequate funding, staffing and action dates, will increase the odds in your favor. As a consolation prize, you may at least be able to pocket some extra co-op ad money to help defray the costs of your transfer-centric marketing efforts.

To attract new prospects, direct marketers, direct writers and agencies still like to offer giveaways (like roadmaps) for the mere chance to estimate a premium. This can be very costly in terms of time and money especially if the quotes that your promotion generates fail to result in an adequate number of long-term insureds. A better approach is to offer a gift only after the sale is made, as the culmination of the transfer process. Life-saving freebies, like first aid kits, smoke detectors, or fire extinguishers are particularly suited to this mission and should fit well within your insurance regulator’s rebating threshold.

Targeting personal lines “transfer business” via direct mail, ads, postcards, inserts, e-mails and more, can distinguish you from the lower price-better service crowd. With it, you offer a welcome remedy to the common fear of the hassles associated with switching insurance providers. In doing so, you’ll uncover a different breed of insurance prospect, the non-shopper, who was just waiting to be asked for their business—the right way.

Alan Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the 1001 Agency Ideas book series and other popular P/C sales resources. He may be reached at (800) 724-1435 or by e-mail at: shulman@agencyideas.com. His Web site is www.agencyideas.com.