Best Practices for Ensuring Insurance Renewals

Fran Majidi September 15, 2022
Insurance Renewals

Maintaining relationships should keep you busy during the entire life cycle of the customer-agent relationship. Whether your customer is up for renewal in a couple of months or another year, there are some best practices for ensuring their business.

If you have a churn-and-burn approach to running your agency, it may be worthwhile to stop and consider how much you’re losing by not focusing on renewals. If you’re counting on renewals to grow your agency, you’re on the right track, and we have some tips that will help.

Document All Communications Along the Way

Write down a sentence or two each after each conversation with a client so you know where to pick up after you left off. There will be customers who filed claims, and they should automatically be reviewed. Documenting complaints is also important because these are the customers you may need to convince to renew or you may need to shop alternatives for them to keep their business.

Hopefully, you’ve not been neglecting the squeaky wheels over the previous months, but it’s never too late to start paying closer attention to these customers. Contact the problematic accounts as early as possible.

When to Shop New Rates for Clients

Don’t waste your time reshopping people who’ve had a small increase of 10% or less if they are not complaining, but do check in with them before renewal time just to ensure their loyalty. If a customer is enticed by lower rates they may consider shopping around but will be less apt to do so if you are communicating with them along the way and reinforcing your relationship, which sometimes means offering new quotes.

How Often Should I Touch Base with Customers?

Never go more than two months before touching base with customers to see if they are happy with their policy and to see if they’ve had any major life changes that may affect their rates.

They say a good agency renews about 80% of their policies. Well, a great agency will retain 90% or more if they do their due diligence. It’s really only a little bit more work. Make those calls!

When to Call Before Renewal

At the latest, you should call 45 days before renewal, but we always suggested you make first contact 60 days prior and then another followup a month before renewal. There’s nothing like being ahead of the game because otherwise, it’s challenging to find a good solution if your customer doesn’t like the new rate you’re offering. When you make the call be sure to let the client know that you’ve begun the renewal process. Assume the renewal and don’t ask the client if they want a review, but be eager to do a thorough one if asked.

Most customers are not keeping exact dates of when their car insurance will expire, so in most cases, the client will be happy to hear that the ball is rolling when you call to say you’re starting the process. But be prepared for the people who want a lower rate or expect new discounts, if they’ve been accident- and claims- free. And if they don’t ask for one and they qualify, don’t hesitate to jump on the phone and give them the good news. Never skimp on discounts that apply for a couple of dollars more in commission!

Treat Each Renewal as a New Sale

Of course you don’t want to review an entire policy if a customer is simply happy to renew, but you must be prepared to sell your agency a second time because it happens! We generally don’t recommend selling on price for a renewal unless it’s an issue with the client, so stress the financial strength of your company and let the customer know you have their back. If a recent accident is now raising the customer’s rate, explain that the accident is on record and their rate will increase even if they decide to shop elsewhere. See if you can apply a discount to lower the new rate.

One great way to sweeten the deal with grumpy customers who are bound to pay more anywhere they go is to send a gift card with a reminder that they are a valued customer.

Thank Your Customers for Continuing to Work with You

Let your clients know that it’s an honor to be their agent. They have no obligation to renew, so now’s the time to really connect and ask questions about the past year and all that’s changed in their lives both professionally and personally. Listen carefully, because these updates may trigger a rate change, hopefully for the better.

Unlike an initial sale, where you educate the customer about coverages, think of the renewal call(s) as a time to show deep appreciation rather than discussing add-on coverages you think may be worthwhile. However, if they are uninsured with a new asset, it’s a good idea to make them aware of the products you sell that can protect them. It’s a fact that the more lines of insurance you sell to one client, the lower the chances that they will bounce to another agent. Keep your clients shielded and they will stay with you!

Aim for 90% Renewal or More

If you did not do it so far this year, make it a point going forward to focus on customer retention. Don’t wait for renewal time to contact your book of business. If the work is too much for you to do in addition to making new sales, hire a customer service representative who is cheery but professional. It can be a full-time job keeping in touch with everyone, and hiring a small staff or even just one person can really make all the difference because you are selling customer care above everything else.

Contact Unsuccessful Leads

Another way to get ahead without spending any money at all is to go through your heap of unsuccessful leads. If you haven’t been keeping track of the insurance leads you buy with a reliable CRM, consider investing in one. Unsuccessful leads often turn into sales come renewal time, especially if you contact that lead well ahead of time. Most comparison shoppers are apt to shop around again, but you can nip a customer’s activity in the bud by giving them a quote before they even start surfing the web.

It’s a Great Time for Referrals!

If you’ve been servicing your clients’ accounts regularly and not waiting until renewal to touch base, you’ve done a good job in solidifying your relationships. This is why renewals are a great time to ask for referrals. A happy customer who feels you have their back will be more than happy to help you do the same for a friend or family member.