What is a Good Renewal Ratio

jstsa42 · 11-10-2008, 06:17 PM

Hello All,

Just doing a little research and was wondering what some of your retnention ratios are for previously closed customers.

How many customers ouut of ten stick with the plans that you have sold them and for how many years on average.

Thanks,
Mike

somarco · 11-10-2008, 06:36 PM

3 yr retention is around 85%.

jstsa42 · 11-10-2008, 07:59 PM

Originally Posted by somarco

3 yr retention is around 85%.

I am assuming that retention you gave is for the Majors carriers like Aetna, United, Humana, Blue Cross, Assurant, ect?

Thanks,
Mike

somarco · 11-10-2008, 08:24 PM

I only use major carriers. There is no reason to offer a 2nd or 3rd tier carrier.

Peelerinsurance.com · 11-11-2008, 12:34 PM

I will line up with somarco.. mine i about 95%. However I am one of those guys that calls all the renewals and moves them to other top tier carriers if the rt increaase is above market

Some on here do not agree with my business practice of moving the client... but i just look at it this way... if your cient is an internet based client (internet lead) they will just get back on the internet and shop the business again without me knowing and "poof" they have left and went with an agent slaming them into another company... most times a more limited policy than i wrote.... U MUST CALL AND OFFER THE ROLL.... if not you have not done your job

healthagent · 11-11-2008, 12:37 PM

Agreed. Total shift in my way of thinking from when I was doing something "ethical" by telling my clients to stay put and suck up the rate increase.

No longer. My initial job was to find the best plan at the best rate. That's my same job at each renewal.

If the carriers don't want me to shop around maybe they should reconsider 15% to 25% rate increase.

moonlightandmargaritas · 11-11-2008, 12:41 PM

Originally Posted by Peelerinsurance.com

However I am one of those guys that calls all the renewals and moves them to other top tier carriers if the rt increaase is above market

Some on here do not agree with my business practice of moving the client...

I'll submit that anyone NOT doing this isn't doing their job, and won't keep clients for long.

The only one that could have a problem with moving a client to a better value (not just for the sake of a new fyc - although that's a nice side benefit) is the carrier.

Most are them are filled with morons anyway...

healthagent · 11-11-2008, 12:47 PM

I'm doing well with moving clients from PPO to HSAs plans - especially the ones who claimed they didn't see the value in the HSA

Now that $400 premium is $480 and I'm showing them that $280 HSA again at renewal? Done.

Peelerinsurance.com · 11-11-2008, 02:18 PM

Well... glad to see folks are warming up to what i have been doing for years... all i know is that wene we had this discussion several months ago i just flat arse got slamed for doing this... it was also implied that a was a poor excuse of an insiurance agent by not leaving the client alone... things like unethical come to mind... so anyway, there u go

healthagent · 11-11-2008, 02:49 PM

Imagine the industry was different and your car salesman could service your loan.

You applied for a car loan and drove off the lot at 7.9% however after a year your salesman was allowed to shop again for you.

This time he finds 5.9% and can lower your rate. Well...do you want him to call and suggest that?

Obviously if your credit has changed for the worse your better off staying put - same with clients who have developed conditions.

Would anyone here not refi their mortgage if with zero catches or fees you could knock a point off? Common.

somarco · 11-11-2008, 03:58 PM

Churning clients for a FYC is one thing, and I know agents who do this.

Helping your clients at renewal, which I do all the time, and offering them a better value (if it exists) is another.

Most of the renewals are in line and there is no reason to move. Some of my GR plans that have whiskers are moving, usually to Aetna, but so far most of the other renewals are in line and no reason to move.

My clients usually stay with the same carrier, and same plan, for around 3 years. Some stay even longer.

jstsa42 · 11-13-2008, 01:39 PM

Great Information guys! I agree that the job is to find the client the best available options. I come from the Home Loan world, and you bet your rear end they loved it when you called and told them they could get a 5.9 instead of the 7.9 they had 2 years ago. That said, the closing cost numbers had to make sense. There is not any sense charging somebody $5000 in FL state doc stamps, and required taxes, to save them $50 on the payment. If there payments are $1000 a month then they have paid $24,000 in payments, mostly interest expense, in the first two years. You tack on $5000 in closing costs, and set them back to 30 years on the mortgage, and they not only have to pay the $5000 inn closing costs but the $24,000 in interest expense all over again. Fantastic, they saved $50 a month for 360 months or $18,000, but you cost them $29,000 to do it . NO benefit there.

Bottomline, you know what's right. It's not churning when you have your clients best financial interest at heart and put that ahead of your comissions. It's that simple.

moonlightandmargaritas · 11-13-2008, 01:53 PM

Originally Posted by jstsa42

Bottomline, you know what's right. It's not churning when you have your clients best financial interest at heart and put that ahead of your comissions. It's that simple.

Yes, very simple. Probably the only way I've been able to survive in this biz nearly 20 years.

For most, it's very elusive however...

Peelerinsurance.com · 11-13-2008, 02:06 PM

20 years... my god u must be old!!!

moonlightandmargaritas · 11-13-2008, 02:21 PM

Originally Posted by Peelerinsurance.com

20 years... my god u must be old!!!

Hehehehehe...just turned 52 Charlie.

ABC · 11-13-2008, 05:01 PM

Most of my individuals will stay on the same plan for 2.5 years. I think I am around 90% on that.

I hate to admit this but I really don't shift that many clients to new carriers. I sell mostly Anthem because their rates are very good and on the individual side average rate increase is 9%-14% which I think is low.
So after 2-3 years I might be able to switch them to a new carrier and save them money.
I for one have just seen to many individual carriers buy business and then throw out 24% rate increase the next year.

I have had carriers tell me not to quote their individual products because they were not competitive with Anthem in my area.