Inflation & Independent Insurance Agents – How to Handle It
As we travel across the country, we see that there is one thing on independent insurance agents’ minds these days and that is inflation. Everyone is being impacted by this, including insurance. So, it makes sense that frontline staff is taking a lot more phone calls from customers concerned about their rate.
In this episode of the Ridiculously Amazing Insurance Agent, Kelly talks about how we handle these, sometimes scary, conversations about inflation and its many consequences.
Inflation Hurts Everyone
Every agent reading this has groaned as they passed a gas station. It’s rough out there and people are naturally looking to economize.
They’ll ask themselves questions like “Do I really need Netflix?”
And they’ll definitely give you a call when they see that their rate just went up. They have the right to and there is a way to make this conversation work for everyone. We are going to go step-by-step through how to make happen.
Why You Need A Plan
They are 100% going to give you a call. Money issues make people stress out, lose a few IQ points (there is scientific data on this), and put on their “Karen” voices.
Unless you want to get in the ring—something no one really wants—you need to have a plan to receive their concern and do something productive with it.
You know we love plans and if this whole topic gets your hackles up, we suggest you take a look at the course we have on Rate Calls to keep retention rates sky-high. Yes, we have an entire course. Go check it out.
Okay, back to your scheduled programming.
Fight Your Anti-Inflation Instincts
You are going to want to hop to it and fix it for them. That is what your insurance-based spidey-senses tell you to do and you have to fight it. Independent insurance agents often have very little/nothing to benefit from “fixing it”.
It’s usually just a great way to lose the agency money and we don’t want to do that.
And we get it. This problem really hits home right now because you are also looking to cut costs. But if you give in to this urge, you are going to have a million lines to remarket, you will get backlogged, and then life will really be tough.
APP Approved Plan For Inflation Concern Calls
Here is a step-by-step guide to handling inflation-caused rate concern calls from your customers.
Step #1. Breathe And Empathize.
There is no use in panicking. You need to put on your therapist/insurance agent pants and listen to them. Set your own feelings aside and hear them out. And no matter what they say you need to remember to ignore the “fix it” instinct.
They might have just lost their job and they have to take a hard look at all of their finances. They might have just had a baby.
Just hear them out and meet them where they are.
If they are really, really upset and that instinct gets really, really strong, remember this:
The worst thing that can happen is they cancel and don’t pay for insurance, but then things will get much harder. They might go into a lapse and then it’s much more expensive for them and they won’t have many options. And if they get pulled over, get into an accident, or have an emergency happen, they will be in a much, much worse situation.
Our favorite response to any incoming caller goes like this:
- Thank them. “Thank you so much for calling in.”
- Relate. “For all of us, things are getting pretty hard.”
- Let them know you can help, but DO NOT promise to re-shop. “The great thing about being an independent insurance agent is having options.”
- Go right into a review. “So, I’m going to go ahead and review your account with you. Together, we will come up with a game plan that is in your best interest.”
The point is to take control of the phone call.
Step #2. SCRUB Their Account.
Right off the bat, confirm their contact information. The number in the system might be five years gone and you need to fix that.
And somewhere in that process, you might find out what happened. For example:
- Was there an endorsement?
- Was there a claim?
- What is their payment history?
- How old is their roof?
- Did they hit a milestone birthday?
- Did a discount fall off?
- What is their insurance score?
- Are they driving the same amount?
A quick note:
Some people might call in like this at renewal, but even if they call mid-term do this for them, too.
Once you are done scrubbing, you’ll either find a reason or you won’t.
Step #3. Look At ALL Possible Discounts.
From top to bottom, take a look at every discount offered and see if they qualify for any of them.
KEY TO THAT: Before you get overwhelmed by that thought, we know that keeping track of that info for (at least) 10 different companies might be impossible. So, we recommend that every independent insurance agent have access to a “discount sheet” with a clear depiction of all your carriers and their discount. You should even include a rough estimate of each one.
If a client qualifies for a discount, you might have to sell them on it.
For example, we went over some time management tips recently and heard a lot of flack about payments. Regardless, you should always ask if they want to pay in full or move to EFT. Let the client decline it. Don’t do it for them because you never know.
You are supposed to be their guide and if this is a way to save them money, ask them about it.
Remarketing In The Face Of Inflation
A lot of customers want to jump to this point, but sometimes it’s not necessary for them to save money. But if steps two and three don’t work, we have one more measure.
Step #3. Do They Qualify For A Remarket?
You might have never heard of this, but it’s very real. We believe that there are customers who do and do not qualify for a re-market.
Take a look at the following:
- Their age
- The year of their roof
- What they do in their household
- The value of their policy or policies
- If they are a good fit for your insurance agency (this is a great point for turning them over to another agency)
If they DON’T qualify, this is the point where you turn back to discounts and keep looking.
If they DO qualify, we have one more filter.
Step #4. The Last Line of Defense Before Re-Marketing
This step includes some micro-steps and is very important to do. That’s why it’s in such big font.
Micro Step #1. Update the ENTIRE Application
Go through it with a fine-tooth comb and underwrite everything. Yes, literally underwrite everything.
Mirco Step #2. Ask Them Three VERY SPECIFIC Questions
#1. “How much are you looking to save in order to go through the hassle of changing insurance carriers?”
We think you should say it just like that. You need to highlight that that process is indeed a hassle. To cancel their current plan, they have to fill out paperwork and they have to cancel other paperwork.
If they are homeowners, the escrow can get messed up as you go through this whole process. And if you are dealing with auto, they have to redo their e-card and go through all of that stuff. You should prepare to hear them answer with a very determined tone of voice. “One hundred dollars!” Put that in a different context.
“Oh so, you’d be willing to change over for about $7-8 a month?” Whenever you bring up monthly figures, people tend to make different choices.
BIG WARNING FOR HOMEOWNERS!
Whenever a company writes a new policy on a home, they send out a home inspector to assess the risk and they often have conditions to keep the customer on the account. So, if there is a leaky roof, chipped paint, or an old railing? It all needs to be fixed. Then you have taken someone in a bad situation and put them into a much worse one.
#2. Are you willing to take that risk?
You have to kind of rub their face in all the ways this can go south for them. It’s all a risk, especially for anyone who owns a home. Inflation has driven everything up, including the price of that paint.
A risk for auto policyholders is that if they are strapped for cash, some companies will require a bigger upfront payment.
#3. Is that something you are comfortable with before getting started?
Just a little more face-rubbing.
Step #5. When you do remarket…
We think that you should NEVER email a quote, ever. Instead, you should book an appointment with that customer to go over their options. Because every remarket needs to be worth it and it won’t be if you just send it off without a conversation.
Also, in regards to quotes, you don’t need their permission to quote for renters or umbrellas. You can also prepare a preliminary quote for life insurance.
Remember, the worst thing a person can say is “no”.
One More Thing…
We have to mention this discount that gets overlooked so often.
Two reasons for that:
- Personal preferences and biases
- It’s hard to keep straight between all the different companies
Let’s talk about usage-based driving telematics. It’s included with many carriers today and it is the way of the future. You have to learn it and not let your feelings get in the way.
We recommend that, just like with the discounts, you use have an internal telematics sheet prepared. It needs to include what it looks like and how to explain it. If there isn’t much you can do to help the person calling in, this can be a great thing for them, but you have to keep your opinion out of it.
Inflation Talk – Let’s Review
We know that every independent insurance agent in the country is going to encounter this conversation. So, you need to prepare and have a plan.
Step 1. Provide Empathy
Let them know you understand because it’s more than likely that you do.
Step 2. Scrub Their Account & Look For The Reason Why
Update everything because that’s helpful and then see if you can find the actual reason. Make sure you also check for discounts.
Step 3. Before Remarketing, See If They Qualify
This is important because you need to see if taking the time to do this is actually worth your time because sometimes it’s not.
Step 4. Book An Appointment
Do not just email them. This is a great cross-sell opportunity and you need to take it.
If this is still too scary/confusing/too much for you/your team, reach out. We are more than happy to talk about it.
And check out our course ALL about talking about rates. It’s worth it!
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