For many independent insurance agencies, they don’t spend time really drilling down why people are leaving. When you’re smaller, you know every detail about why your insurance cancellations are increasing. As you grow to ten plus people, it’s impossible to understand completely where, when and why people leave the agency. We all may have a feeling, but understanding who is leaving is a great way to tighten up some bolts and make sure you have a clear plan to shore up retention, making every new business policy count. In this blog we review what to do to get a clear handle on insurance cancellations in the simplest way possible.
Before we dive into the top strategies, I want to give you the best advice that I can to help you embrace and execute this process. Your service team needs skin in the game to help retain clients. Depending on your model, we generally recommend the following strategy:
- Clearly share every month each account manager’s retention rate and ranking. Yes, this may be uncomfortable, but just like a weekly weigh-in, the transparent and public accountability will help them understand the importance of retention. Doing this is important both for your goal to stop cancellations and for your team to buy in to cleaning up the data quickly and efficiently.
- Once you have the numbers, your next best bet is to create an incentive plan based on book growth. We outline a sample plan in this blog. Basically, you take a percentage of growth each quarter on their book and the team’s book and provide a bonus based on those numbers.
Step 1: Get Your Data Right
You need to make sure that your agency management system is geared up and ready to start tracking. This means you need to confirm and clarify the following:
- Are all the right account managers assigned to the book of business? If not, make these changes first:
- Identify in your management system whether you need recode rewrites. For more information, review this blog on tracking retention.
- Make sure customers are coded correctly so you can get an accurate department retention rate.
- For most management systems, we can code cancellation reasons. Review the list and determine if you can code it before or after the download. (Oftentimes the download clears out the reason.)
Once you have a handle on your data, you need to get a baseline metric for each person and department.
Step 2: Review your cancellation reasons (Hint: Insured’s request needs more detail)
In order to get a handle on why cancellations are occurring, we need to track the reasons — in as much detail as possible. Here is the list we recommend:
- Passed Away
- Moved Where We Have a License
- Moved Outside of Our Licensing
- Sold
- Change (i.e. added a youthful driver or vehicle)
- Price Reshopped (These should indicate where they went.)
- Price, No Reshop
- Non-Payment
- Non-Renewed
- Flat Cancel
- Agency Dismissed
Each one of these reasons needs to have a different strategy. There are some that we can control and some that we can’t control. For example, someone passing away is out of your control. Moving to a place we have a license, that is in your control!
Step 3: Share
When insurance cancellations increase, it’s time to share the numbers and talk about how to reduce them. You can always check out our blog for tips, tricks and scripts to help your team decrease those nasty cancellations.
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