As premiums increase in a very challenging economy, agencies must be more proactive than ever to avoid attrition since premium increases trigger clients to shop their policies. In the past, clients have been used to seeing decreases, and during times of economic prosperity even a small increase was met with acceptance. However, this is not what is happening in the current economy. Those agencies that have a plan will survive this and thrive vs. the agencies that don’t have a plan. Here are a number of ideas to keep your clients sealed to your agency:
1. Client Phone Contact – This is probably the most important. clients need to be contacted 45 to 60 days prior to renewal. This should be done preferably by phone or in person, but for those who are hard to get a hold of email may be your only option and can be very effective. If done by phone or in person, it may not be a bad idea to provide a recap via email.
2. Account Consolidation – This is well-known in our industry. The more accounts your client has with you, the less likely they are to shop their policies and will contact their agency if there are any pricing issues. Remember any policy you share with another agency is at risk to being lost to that other agency, most especially when a client gets a rate increase.
3. Carrier Appointments – The more carrier appointments, the more likely you will be able to shop a policy and keep that account in cases of significant increases and underwriting non-renewals. Carrier appointment can be critical in times like this. If you are small-to-midsize agency and not part of a larger network such as a cluster or alliance group, you a truly missing out on some key appointments that can make or break you during a time of increasing premiums and tight underwriting standards.
4. Communications Program – If your agency does not have a newsletter or other regular client communications, you are at greater risk of losing a client. This is because you are not branding your agency and your professionalism. Professional organizations communicate with their clients to keep your name out in front of your client base as a player in the marketplace. It’s no different than supermarkets that send out their weekly specials; they do so to keep their existing customers and hopefully win some new customers. It’s a cost of doing business and staying in business, and also an agency win the client’s entire account.
5. Other Marketing – If your agency focuses on a certain community or a niche industry, increasing your advertising budget may not help bring a ton of new business, but it helps keep your existing business on the books. This works well if you can advertise in a medium that reaches a good percentage of your client base, such as a community newspaper, or for those who have niche agencies, a trade publication. “Publication” can include more than just magazines and other paper distributions – websites or other online marketing channels are a popular place for clients to get information in today’s technology age.
6. Sell your Agency – If you don’t want to do any of the above or are not in a position to, your best bet would be to sell your agency before your book may be effected by increasing premiums or tighter underwriting standards.
The bottom line is that short of selling your agency, you are going to have to work harder and invest in your agency to keep your clients. Also, as premiums increase, your commissions will increase and this can help pick up some of the additional expenses that it may take to keep and grow your book. Successful agencies will not play the wait–and-see game; they will have a plan and take action. Those who don’t are at risk of losing their policy count and commission revenues. That is why it is so important to take action and protect the book you worked so hard for. In addition, this will help maintain or increasing your agency value when it does come time to sell.