10 best ideas for increasing retention

theinsurancelady · 02-28-2008, 11:45 PM

Hey veterans out there. I've been working on my numbers lately and notice that our retention rate for our non-standard P/C book is around 73%.

What are your best ideas for increasing that number? We are currently doing nothing formal, so all ideas are welcome.

Thanks in advance,
Kassidi

Frank Stastny · 02-29-2008, 12:38 AM

Send birthday letters you have created. Birthday cards, especially those provided by the companies suck, IMHO. Letters are much more personal.

Send anniversary letters, real letters not e-mail, four to six weeks prior to the renewal date. The anniversary of the policy not their marriage anniversary. "Congratulations, you are about to celebrate the first anniversary as a member of our (enter name of company) family. We promise to continue to provide you with quality insurance and excellent service..." You get the idea.

Include in the anniversary letter a statement saying you are going to contact them to schedule a policy review to make sure their current coverage is still what they need.

A news letter is always a good idea but only when you have something worth while to say. If you send them too often with junk in them they will stop reading them.

Sending the news letter by e-mail is probably okay but so few of my clients have computers and or use them on a regular basis that I send them snail mail. Again, like the birthday letters I think a "real letter" is more personal. More work? Yes, keeping the insurance one sells is an on going process.

theinsurancelady · 02-29-2008, 12:53 AM

It's funny because I find myself trying to come up with new ways to get new clients and then not focusing on keeping them....

I thought of doing annual reviews, but really like your idea of the birthday letter.

I too have a customer base that would do what Ben Stiller and Owen Wilson did with their computer in ZOOLANDER!

If you haven't seen the movie then it won't mean anything too you, but thats basically where my current base resides.

I think they would find a birthday letter very personal and welcomed.

I myself rarely read newsletters, even ones that I subscribe to. At best I scan them.

Thanks for the ideas Frank!

Frank Stastny · 02-29-2008, 01:01 AM

Send me your e-mail address and I will send you a copy of the letter I am currently using. Send it to frank@yio.info . Feel free to use it if you like it.

Frank Stastny · 02-29-2008, 01:07 AM

Originally Posted by theinsurancelady

I myself rarely read newsletters, even ones that I subscribe to. At best I scan them.

That's why I said to send them only if you have something worth while to say. I only send one or two a year. Just enough to let them know that I am still alive and their insurance agent. My "title" when I sign letters is "Your Insurance Agent".

theinsurancelady · 02-29-2008, 01:10 AM

"Your Insurance Agent"

I LOVE IT!

Mind if I borrow that?

I guess mine might rightly say

"Your Insurance Lady"

Maybe I'll try out both and see what response I get

Frank Stastny · 02-29-2008, 01:32 AM

Originally Posted by theinsurancelady

"Your Insurance Agent"

I LOVE IT!

Mind if I borrow that?

I guess mine might rightly say

"Your Insurance Lady"

Maybe I'll try out both and see what response I get

I like "Your Insurance Lady", however, if "Your Insurance Agent" works better for you by all means use it. You might also consider "The Insurance Lady".

I think it is important that people know that I am an insurance agent. My business card also says "Your Insurance Agent".

theinsurancelady · 02-29-2008, 01:40 AM

How presumptuous of you! I like that. I think people like an agent with a sense of humor and character. If I don't get a client to laugh or at least smile when they're in my office I feel inadequate. It's very important for me to make a personal connection with my clients and this would go right along with that.

I know there are a lot of people who feel you need to be stuffy and suited to be a professional agent. I'm just not one of them.

djs · 02-29-2008, 02:05 AM

Non-standard P&C is tough to have much retention. My experience is this is the one market where you don't want to spend much money, they'll think you are overcharging the premium.

My suggestion (especially for non-standard auto) is to offer to sit down with them every 6 months to see if you can improve the rates. Chances are, you won't be able to, unless something is dropping, but they will appreciate knowing that you are looking into it. I would do this with a phone call, or a letter offering to do a 'review' if they call you.

73% non-standard isn't terrible. It could be better, but it also depends if you convert any to standard.

Dan

theinsurancelady · 02-29-2008, 02:17 AM

We have tried converting those that typically should be with a preferred carrier. It all goes along great until, well until they do not pay their bill.

It happens over and over again.

You end up putting an other wise standard risk with a nonstandard company due to the fact that they do not have 6 months without a lapse in coverage.

When I first started moving people pver I thought it was great. Then eventually you have to ask yourself if you are serving your preferred carriers less than ideal risk.

I think a lot of local agencies really kill clients with "broker fees" including endorsement fees ie: adding a driver, adding a vehicle, address changes, even charging for accepting payments in office.

Their viewpoint is they can make more money on broker fees in a typical year with a customer who cancels a lot, then they would on a typical preferred auto policy.

According to most mumblings, broker fees are on their way out. At least here in California.

I don't think it's a good business model or for future sale of the book. Really there is no value in broker fees.

I'm trying to get away from price shoppers but thats the name of the game with non-standards.

Thanks for the advice,
Kassidi

djs · 02-29-2008, 02:34 AM

Yep... non-standard is a tough business.

Dan

Mr. Bill · 02-29-2008, 06:38 AM

And the biggest jokes are the Farmers (I believe) ads talking about how their previous agent overinsured them. Wow. What a concept.

Has anyone actually met someone who was truly overinsured? I haven't yet.

djs · 02-29-2008, 10:52 AM

Originally Posted by Mr. Bill

And the biggest jokes are the Farmers (I believe) ads talking about how their previous agent overinsured them. Wow. What a concept.

Has anyone actually met someone who was truly overinsured? I haven't yet.

Yes, many times. I believe its a regional thing, and probably only happens in the P&C side, specifically homes. In my area, when I have a mortgage company that isn't used to Bay Area pricing, they will want a home insured for the value of the loan, rather than the value of rebuilding the home. These numbers can be vastly different, and cost the insured a lot of money if the agent doesn't handle it correctly.

You have the opposite problem in other parts of the country, where rebuilding the home is frequently more expensive than buying a different one. I don't run into this problem, but I've talked to many agents that do.

So yes, usually at least once a month, I end up overinsuring someone so they can get their loan processed. I do this only after letting them know that I'm doing it. It's faster to do this than to try to get a lender to read the California law, especially when someone is trying to move into their house.

Dan

P.S. I'm not talking about an extra $50K on dwelling coverage, which is somewhat subjective, I'm talking about needed an extra $300K in coverage, usually twice the amount truly needed, because the lender wants it. It can't be used, no insurance company will pay more than it cost to rebuild a similar size/quality home, regardless of how much extra coverage they have.

theinsurancelady · 02-29-2008, 11:12 AM

I too have seen a few home policies overinsured. Maybe it's a California thing?

theinsurancelady · 02-29-2008, 11:12 AM

What about guaranteed replacement cost coverage?

djs · 02-29-2008, 05:40 PM

Originally Posted by theinsurancelady

What about guaranteed replacement cost coverage?

Not to many carriers in California offer this on home policies anymore. They lost their shirts back in the Oakland Hill fires. There are some old policies out there that have this, but not many. I believe there are a couple of carriers that offer it, but only on named peril policies.

Dan

1manshow · 03-03-2008, 12:55 PM

We also use the birthday letter approach and it is redeemable for an ice cream sundae at one of the restaraunts we insure. Builds goodwill w/clients and lets them know we're thinking of them.

We also send a renewal questionnaire that lets them know we are shopping for them and also gathers info. useful to my agency for multi-lining and account rounding. Account rounding has been our biggest persistency builder.

Newsletter goes out quarterly and lists "Client of the month" section which is a $50 gift card winner pulled from our list of clients who sent us referrals that month(they each won a $10 gas card). Our Newsletter also features one of our business clients in a "Spotlight on Business" section that helps generate exposure for them. Newsletter has been a huge success for us because we keep it personal (photos, local news,etc) and we write it in-house versus the canned corporate issues.

bobson · 03-06-2008, 11:20 AM

Originally Posted by djs

Yes, many times. I believe its a regional thing, and probably only happens in the P&C side, specifically homes. In my area, when I have a mortgage company that isn't used to Bay Area pricing, they will want a home insured for the value of the loan, rather than the value of rebuilding the home. These numbers can be vastly different, and cost the insured a lot of money if the agent doesn't handle it correctly.

You have the opposite problem in other parts of the country, where rebuilding the home is frequently more expensive than buying a different one. I don't run into this problem, but I've talked to many agents that do.

So yes, usually at least once a month, I end up overinsuring someone so they can get their loan processed. I do this only after letting them know that I'm doing it. It's faster to do this than to try to get a lender to read the California law, especially when someone is trying to move into their house.

Dan

P.S. I'm not talking about an extra $50K on dwelling coverage, which is somewhat subjective, I'm talking about needed an extra $300K in coverage, usually twice the amount truly needed, because the lender wants it. It can't be used, no insurance company will pay more than it cost to rebuild a similar size/quality home, regardless of how much extra coverage they have.

I was going to ask, "don't your provide a moral hazard by overinsuring a house by $300,000?" But then I read your last sentence. In my state if your house burns down the insurance company cuts you a check for coverage A, no ifs, ands, or buts about it.

Can't you explain to lenders the land has a value outside of the house? I mean I don't know what a city lot goes for in San Fran but I bet a helluva lot more than Casper Wyoming or the Irish capital of the West, Butte America (which also happens to be the birthplace of Eval Kenievel - RIP).

bobson · 03-06-2008, 11:27 AM

Originally Posted by theinsurancelady

Hey veterans out there. I've been working on my numbers lately and notice that our retention rate for our non-standard P/C book is around 73%.

What are your best ideas for increasing that number? We are currently doing nothing formal, so all ideas are welcome.

Thanks in advance,
Kassidi

Non-standard retention of 73% is pretty good. If you want that business to stick, make them go EFT. That will do more than anything else I bet.

jmmauthe · 04-10-2008, 03:23 PM

WOW!! Great advice on retention!! I worked for a cative branded agency in my first year plus of insurance and have just hit my 6 month mark at an independent agency. Therefore, my modes of retention were somewhat provided to me prior and not much thought was necessary to implement. However, now I feel like I'm in a whole new 'independent' world of customer retention. The birthday and anniversary letters are superb ideas, which was used at the agency I came from. However, the detailed information provided, by 1manshow, about their newsletter makes me want to find a client in our commercial lines to 'spotlight' or even provide coupons for others to go visit!!! A spark has now become a flame...look out for my wildfire!!!

(Still novice & slightly) Discouraged agent, revived!!!