In the Accenture report, Hanging on: A new look at commercial insurance customer retention, we discuss why carriers need to adopt a dedicated customer retention strategy, and we outline the four areas a strategy should cover. In this latest post in my series on those areas, I’ll cover the renewal experience.
Customer retention is most at risk during renewals, assuming that a carrier’s service has not seriously deteriorated over the previous year. This risk is greatly heightened when, instead of sending out an automatic or flow-based renewal notice, the carrier decides to fully rewrite the policy. While a full underwriting approach helps the carrier identify recent changes to an insured’s risk profile, it creates a significant disruption for the agency by requiring it to commit significant time compiling the information the carrier seeks. The experience is not a good one for the customer, either. The disruption creates an opportunity for a customer-centric agent to shop the policy around.
Renewals for customers with changing risk do not have to be disruptive, however. Carriers that need more information about customers can gather it and ensure a smooth renewal experience for them and their agents, which should increase retention.
One way is by taking steps to flow-renew a larger percentage of business in many market segments. The carrier can do this while still gathering the data needed to adequately assess changes in customers’ risk profiles by using advanced analytics, potentially supplemented by external data.
Carriers, however, might need more information to assess a risk. In that case, they first should explore new external data sources. If those sources can provide the needed insight about the risk, carriers would not have to directly contact either their agents or customers.
To improve the renewal experience for all agents and customers—but especially in more challenging renewals—carriers could proactively promote their value proposition. Within a quote, highlight the forms of value that set you apart from your competitors, whether they are policy provisions, services or complementary offerings. This approach makes it easier for agents to remain with a carrier, especially in a competitive bid process and when the incumbent is seeking a significant rate hike.
To learn more download the report: Hanging on: A new look at commercial insurance customer retention
Next time: Insurer responses to agency mergers and acquisitions.