Is it worth it to market personal lines policies to drivers and homeowners who shop year after year? It’s costly to book new business and besides; a steady flow of renewals is what keeps the insurance industry in business, including your agency. Yet today, it’s harder than ever to retain accounts because virtually every one of your insureds has multiple buying choices, both online and off. So with all of the competition, now and in the future, what can you do to keep more business on the books?
The Usual Suspects
There are plenty of well-known actions you can take to sweeten your retention ratios. These include offering competitive premiums, keeping in regular contact with your clients via social media, newsletters or blogs, renewal reviews, and promptly responding to all client inquiries. Additionally, there is a preemptive approach: focusing your promotional efforts mainly on prospects who are predisposed to stay with you after the initial policy sale – instead of just anyone with a car or house.
Speculating on who will renew their personal lines with your agency isn’t an exact science. Sometimes this guestimate is based on the person’s policy count: the more contracts they buy from you, the harder it is for them to leave. But this “commonly-known fact” may not be as reliable as it once was.
It’s often taken for granted that price-focused policy shoppers are less likely to be loyal than protection-driven consumers who buy multiple policies. But with so many rivals vying for personal lines today, and with key marketers simplifying the shopping process, you may discover that a multiple-policyholder looks around as much as a monoline insured. Plus, that young millennial may soon be buying his or her first home or starting (or advancing in) a business – and prefer the advice of a local professional to that of a distant seller.
Look at Your Book
How can you know precisely which prospects are the most likely to buy and renew their personal lines policies with your office? You can’t; but you may get a grip on it by reviewing your sales and cancellation results. Look at your personal lines records over the past several years. See which insureds left for competitive reasons and which stuck with you. Then endeavor to spot what attracted each group to your agency in the first place. It may be the medium that you used, your promotional message, or both.
The result of this simple investigatory exercise may be something axiomatic, such as learning that your most loyal auto and home insureds originally derived from referrals. If so, aggressively and continuously seek out more. Other steady renewers may have come from your commercial lines book, by selling personal lines to owners and employees of businesses that you already write. Still more loyalists may have resulted from new business campaigns targeting specific policies, such as boats, umbrellas, and flood. Simultaneously consider why unhappy insureds depart. Drill down for the root cause and learn from it.
Use the knowledge gained above as factors in developing future personal lines promotions. Appeal to as diverse a pool of prospects as your budget allows, employing both digital and traditional media. Measure the resulting sales and renewals – and make marketing adjustments as needed. Your agency’s retention ratio involves additional factors as well, including having steady, viable markets, establishing a desirable brand, and making it as easy and pleasant to do business with your office as possible.
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