Each percentage point of customer retention could amount to millions of dollars in premium revenue for an insurer. Yet retention, as noted in the Accenture report, Hanging on: A new look at commercial insurance customer retention, is a distant consideration behind growth and profitability for carriers. In my series of posts on this report, I’ve examined three of the areas that an insurer’s dedicated customer retention strategy should cover. In this last post in the series, I’ll cover the fourth area: how carriers should respond to an agency merger or acquisition (M&A).
Even if an insurer has adopted a robust customer retention strategy that addresses the other three areas I’ve outlined—distribution management, customer stickiness and the renewal experience—an agency M&A can wreck that strategy. This is critical, because agency M&As are a frequent occurrence.
Recognizing this, smart carriers will have plans in hand on how to respond to improve the likelihood that a new agent or broker will not transition insureds to a competing carrier. Among other ideas, a carrier could develop:
- A high-touch communication plan to introduce itself and its value proposition to new agents.
- A rapid white-glove system to onboard new agents.
- Specialized plans that incentivize new agents to remain with the incumbent insurer at the first renewal.
Carriers need to have the same year-long focus on customer retention as they have on their year-over-year growth plans. Carriers should clearly define their retention strategy, including plans, goals and measures relating to all areas of their business. Without a retention strategy, carriers are allowing customers and premium to slip away every day.
To learn more download the report: Hanging on: A new look at commercial insurance customer retention