Insurance Agent Interests 02/20/2024

Solidifying Your Retention Strategy as an Insurance Agent

By Joseph Peters

Many insurance agents devote a lot of time and resources to pursuing new customers, thinking it is the best way to grow quickly. In reality, this is not the case. Yes, adding new business is essential to growth, but it costs seven to nine times more to sign a new client than to maintain a relationship with an existing one.

The problem is many agents put so much effort into new business they don't give enough attention to their current customers. Clients will notice this and feel they are not a priority, prompting them to explore other options. When the agent loses them, it diminishes the growth they are trying to achieve.

A good insurance professional recognizes the value of their current book of business, as agents who sustain a 5% retention rate improvement over five years double their profits. They realize to see sustainable growth, they need to build a strong foundational network for their business.

To maintain a solid customer base, every agent needs to understand the most crucial aspects of insurance customer retention and lasting business partnerships.

Life and Health (L&H) vs. Property and Casualty (P&C)

Statistically, the type of insurance an agent specializes in plays a factor in the likelihood of maintaining their current business. L&H insurance agents have a much easier time retaining clients and have more loyalty than P&C agents because L&H policies are longer-term with more predictable claims.

Another challenge for P&C agents is consumers often cite price as the main factor for buying an insurance policy, especially with P&C policies. Those agents are always at risk of losing their customers to agents who offer better rates, which makes being able to prove value as an agent even more important.

Insurance Agent Customer Retention Strategies

The best way to retain customers as an insurance agent is to do your job well. If you meet your clients' needs, you’re off to a great start.

However, sometimes that isn't enough. Price-sensitive consumers will always seek the best deal — especially P&C policyholders — and other insurance salespeople will constantly try to poach your clients. You need to stand out, go above and beyond and give them a level of service they don’t think they can find anywhere else.

There are two aspects of standing out in today’s insurance climate: building a relationship and enhancing your customer’s digital experience.

Personalizing Service and Building a Relationship

Building a strong, long-term agent-to-client partnership involves fostering trust and showing them you are a reliable and knowledgeable agent. It's about providing insurance solutions and proactively expressing your dedication to meet their needs.

Here is how you can connect with each customer on an individual level:

Be Upfront and Proactive About Potential Issues

Whenever a potential issue arises with a client, notify your them and offer to assist them immediately. If you want to go further, proactively seek and recommend solutions without asking. You may find the conversation daunting, but delivering bad news is part of your job as an insurance agent and withholding information can have more severe consequences than loss of trust.

Consistent Communication

Neglecting contact with an existing client is the number one reason an insurance agent loses them. If you frequently communicate with each customer after you sign them, they will feel like they are still a priority. Reaching out to present them with new policy options, scheduling regular check-ins and notifying them of exciting upgrades to agency offerings are great ways to engage with them.

Providing Options and Expanding Coverage

Having many different options makes you more appealing as an agent, especially to a price-sensitive customer. Plus, it allows you to sell multiple policies to them, which can lead them to consolidate their coverage with you and create a stronger association between the two of you. A client having more than just one policy with you can make a huge difference in retention efforts.

Shop and Compare Rates for Them

This strategy may be helpful for those who struggle with churn due to competitive rates — P&C agents in particular. You can always look for lower rates and better-value coverage plans on your client's behalf. When you find a policy that might be a good alternative to their current situation, reach out and let them know. It’s better to have them change policies with you than without you.

Understand Their Needs and Show Flexibility

To build a long-term relationship, show your client you are able to adapt and find new coverage solutions for their ever-changing life — such as getting married, having children or changing jobs. Keep up with their life and anticipate their needs. Use that information to offer new products and show you will always strive to understand their situation and provide assistance.

Reward Renewals

Show your customer how much their business is appreciated with common gestures, such as sending a gift with a handwritten thank you note at every policy renewal, offering discounts and more. Your client will notice this and be more likely to reciprocate through continued loyalty.

Enhancing Digital Customer Experience

A seamless digital experience is what the modern consumer expects from every business. As an agent, it is a great way to satisfy every client and make doing business with you easy, which will make it hard for them to part with you.

Here are the most important aspects of providing user-friendly services:

Utilize Multiple Touchpoints

Regarding service, a consumer may prefer a quick automated web experience, while another prefers speaking with someone. Sometimes, it depends on the task at hand. A customer that can use multiple communication channels is 21% less likely to cancel their policies.

Provide Self-Service Tools

According to PropertyCasualty360’s Insurtech Center, 20% of customers use insurance portals on weekends, and 48% make premium payments outside traditional business hours. Provide a digital platform that allows them to get quotes, pay their premiums, file claims and do other policy-management tasks at a time convenient for them.

Assist with Payments

Setting up an autopay option can ensure your customer doesn't miss payments and lowers the risk of not renewing their policy. If a client is uncomfortable with that feature, you can text them on the day of policy renewal — studies show this reduces cancellations by 52%.

Omnichannel Approach

An omnichannel experience means interconnecting all the mediums you use. This is essential to ensure a consistent and reliable experience, no matter which channel your customer chooses to interact with you and manage their policy.

For a comprehensive introduction to leveraging technology to improve your business’s digital experience, check out these articles:

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