How to Retain Insurance Customers [Even in a Pandemic]
Between a global pandemic and fragile economy, it’s natural to be concerned about the future of your insurance company. You may have chosen to confront the issue full-on by concentrating your efforts on marketing to attract more clients, but this is not the only option to help your business grow.
Keeping your existing customers can ensure that you’ll have policy renewals in the future, which also means you’ll still have profits coming in. As such, you’ll also want to focus on developing strategies for retaining your clients.
Read on to learn how to retain insurance customers.
What Does Customer Retention Rate Mean in Insurance and How Is It Measured?
The customer retention rate measures the number of customers that a company has over a specific time period. It can gauge the insurance provider’s ability to minimize customer turnover.
The rate is calculated by:
Subtracting the number of new customers gained from the total number of customers at the end of the period
Dividing the difference by the number of customers at the start of the period
Multiplying the product by 100
To illustrate, suppose you had 250 existing customers at the year’s start. You acquired 30 new customers through the year and ended up with 245 customers by the year’s end. Using the given formula, you can calculate your retention rate:
([245 – 30] / 250) x 100 = 86
This means you have a yearly retention rate of 86 percent.
What’s a Good Customer Retention Rate for an Insurance Company?
A retention rate of 83 or 84 percent is average for insurance agencies as a rule of thumb. Of course, a higher percentage is most desirable.
However, having a favorable retention rate doesn’t always mean that the insurance company is doing well. It’s also vital to track the amount of time that clients actually stay with you. You may have gained a considerable number of new customers, but they may still switch to another provider before they result in a boost in income.
How to Retain Insurance Customers in 8 Ways
It doesn’t matter how effectively you bring in new business if you can’t keep your clients. Here are eight tips to help.
1. Make Sure Your Product Line Stays Solid
It’s essential to ensure that customers are getting a good price on the insurance they’re purchasing. If they don’t find it worth the premium, it’s time to reevaluate your pricing or the benefits that come with your policies. Otherwise, your clients will have little reason to stay.
2. Find Opportunities to Offer More Policies
Customers who are only paying for one policy are more likely to switch to another insurance agency. It’s easier for them to cancel it compared to someone who’s holding multiple policies, since they’ll only have one policy to shop around.
You may keep track of which customers have only one policy with your company and have your sales agents look for opportunities to upsell them. For instance, the consumer might mention that they recently purchased their first car. If your company also offers auto insurance, agents may provide a plan with multiple policies to save the customer the headache of renewing with several providers.
3. Highlight Available Discounts
Everybody loves a discount, especially on their insurance premiums. If your customers aren’t aware of the ones your agency offers, don’t hesitate to inform them about it.
For instance, auto insurance providers often offer defensive driving, accident-free, and low-mileage discounts. If a customer has taken defensive driving lessons, doesn’t use their car often, or hasn’t had any car crashes in recent years, the agent can bring the matter up with them.
If a customer knows that they could save money by staying with your company, they’re less likely to switch to another. Though you’ll receive less money from that customer, smaller but consistent payments are still far better than a canceled policy.
4. Cover Qualified Claims Quickly
When customers constantly struggle to file claims, much less collecting payouts, they can easily get discouraged and decide to move to another insurance provider’s coverage.
Getting a reputation for always denying valid insurance claims or refusing to pay for them could cause you to lose clients. It can also turn away others still shopping for insurance. As such, it’s best to pay the policy proceeds quickly if you’re handling a legitimate insurance claim to keep your relationship with your customers.
5. Provide Automatic Payment Options
Customers can sometimes have their policies canceled because they forget to pay their monthly premiums. You could offer automatic payment options to avoid such instances from occurring.
In an autopay setup, your company can automatically receive the amount the customer owes from their bank account or credit card instead of merely sending a bill. This ensures that premiums get paid on time.
To sweeten the deal, you could also offer your customer a discount if they sign up for automatic payments.
6. Always Keep in Touch
Just because a customer isn’t communicating with the insurance agent doesn’t mean they’re happy with your company’s policies or services. Instead of waiting for them to call when they’ve got a problem, you can reach out and ask them how they’ve been, if they’ve got any issues with their current policy, and so on. This way, you can make adjustments to their coverage (or your services) that suit their needs more effectively.
Of course, it’s also important to avoid being too assertive and potentially turn your customers off. If they say that they have no problems and don’t need regular follow-ups, then it’s best to respect their wishes. You also need to be sure that there’s a valid reason whenever you get in touch. For instance, you may be calling to explain some changes in the company or offer a new policy.
7. Explain Policy Benefits and Insurance Terms Clearly
The terms used in the insurance industry can be difficult to understand, even for clients that have been with you for a long time. Customers will appreciate it if you have the patience to teach the topics that they don’t know about yet, such as policyholder responsibilities and benefits, rate increases, and new policies.
Answering their questions helps them make more informed decisions come renewal time. Moreover, such positive interactions can grow your relationship with the customer even further and make them more open to special offers.
8. Offer Multiple Communication Channels
Providing several communication channels for your customers makes your company more accessible. Since not everyone prefers telephone or email, some other platforms to consider include:
A live chat option on your website
Social media pages like Facebook
Instant messaging apps such as WhatsApp, Google Business, etc.
You may also want to consider having 24/7 customer support so that they can ask you for help anytime. When customers need help but can’t get in touch, they can get exasperated and lose faith in your company—to the point where they’ll cancel their policy.
ROI Is Here to Help Your Insurance Company
Communication is a key factor in retaining your customers. But hiring, training, and paying the salaries of an in-house contact center team takes considerable resources and might not be feasible for your insurance agency. To save you the trouble, you can hire a third-party call center team that already knows how to retain insurance customers.
ROI Call Center Solutions provides insurance companies with call center solutions such as upselling and cross-selling, after-hours and multichannel support, and customer retention. Our team studies your business and customers closely to develop personalized strategies for fostering relationships and boosting your retention rates.