TOP 5 REASONS MAKING RENEWAL REVIEW CALLS
SOLVES ALL THE MAJOR CHALLENGES IN YOUR INSURANCE AGENCY
Introduction
Renewal review calls can be controversial amongst independent insurance agency owners, however, in the captive world this is a cornerstone of how they keep and cross sell clients. We will share with you how renewal reviews can cure several challenges in your agency, but first, let’s outline all the reasons we hear why renewal reviews are a waste of time or can even hurt your agency:
● You are poking the sleeping bear, meaning that when you call YOUR client they may start shopping and you can lose a client.
● It’s a waste of time because you won’t hear back from people.
● Calling clients at renewal will lead to rampant remarketing of accounts.
● When you call your clients, you open a can of worms and find a lot of issues that are time consuming to fix.
● There is no way there is enough time to call every client.
● My team will walk out if I start requiring renewal review calls.
Our goal is to share with you how many of these accusations against renewal review calls are based on fear rather than a strategy. We aren’t saying doing it is easy, but we are saying that it gets easier and solves so many other agency challenges proactively that you pick up the time you need to make the renewal review calls.
When we launch the program with agencies, we ask this one powerful question:
“What could be more important every day than making sure our clients’ policies are accurate and they have choices in protecting what they work hard for?”
So, if you are not a renewal review call believer, let me ask you, what could be more important? Reinstating coverage and renewing policies are, but very few things other than those are more important. Yet we too often treat our clients like transactions rather than stepping up to the plate and being their insurance agent. Renewal review calls allow your agency to have an organized process to get the job done. We find on average you connect with 50% of the calls made.
My hope is that by the end of this article you have an open mind about the value of renewal review calls and how they can change the game in your agency.
reaching your agency's
RETENTION POTENTIAL
Every policy you can keep on the books means each piece of new business adds that much more value to the agency. However, too many agencies don’t work to keep an accurate retention rate.
In most management systems you need to give meticulous attention to data entry and accuracy to make sure the retention report is accurate. Agency owners can get frustrated and give up tracking this critical performance indicator for the agency. However, for agencies that have small commercial and personal insurance policies, it’s easy to see that keeping and growing the book of business has become increasingly difficult.
Renewal review calls actually help boost agency retention rates by 1.5%-2% in 6 months. We know this because we require all of our agencies to track their rates accurately. Let me share with you what this would look like for an agency with $13.7 million in premium.
“What could be more important every day than making sure our clients’ policies are accurate and they have choices in protecting what they work hard for?”
This is the equivalent to selling an additional $29,000 in new premium every month!
| Premium | ||
|---|---|---|
|
Current Premium |
$13,725,253.85 |
$13,725,253.85 |
|
Retention |
87.49% |
90.00% |
|
Retained Premium |
$12,008,224.59 |
$12,352,728.46 |
|
Difference in Premium Growth |
$344,503.87 |
|
|
13% Commission Rate |
$44,785.50 |
|
In addition, this additional premium will be compounded each year. The retention rate keeps climbing when you continue to make renewal review calls. Many agencies move to a 92%-94% retention rate after making the calls for two years. For your agency to hit its retention potential, renewal review calls are a key to success.
proactively finding
E&O ERRORS AND COVERAGE GAPS
The second your agency opens every morning, there is the possibility of an E&O claim. People make mistakes, and there may have been instances where you made a wrong hire that led to potential concerns.
In addition, finding and fixing mistakes has been indicated as one of the biggest time management traps and stressors in an agency. When you find a mistake, you have to drop everything, fix it and beg the underwriter for forgiveness. This process can literally take hours, and more often than not you have to have a difficult conversation with the insured about the issue.
Here are a few common E&O issues and general gaps in coverage we have seen remedied through renewal review calls:
● Vehicles that were not added
● Inaccurate umbrellas that were not updated during endorsements
● One client added a 1200 square foot addition onto their home
● Clients who had passed away or gotten divorced
● Wrong property that was insured
● Changes in business operation
Having a touch point every year means that you can get updates from clients and also double check work that happens throughout the year.
selling more
TO YOUR CURRENT CLIENTS
When clients call in you can certainly take the time to cross sell them, however, many agents dive into problem solving mode rather than cross selling mode on inbound calls. We know that when you cross sell accounts retention also improves, so selling more to your current clients helps also boost retention.
When a client works with more than one agent, they are not only missing key discounts, it’s also only a matter of time until one agent asks for the business from the other or one agent makes a mistake and the other one can dive in.
There are four ways you can sell more to your current clients:
● Attract policies that your insured has with other agents
● Educate and create new need on policies that will best protect the client but they have not yet purchased (for example an umbrella)
● Improving coverage
● Adding on new or existing endorsements to add value to the policy
Your client has already said yes to you and your agency once. By consistently educating your clients on all the policies you recommend, you will win new business. With cross selling you can consider wins by obtaining expiration dates, quoting policies during the renewal review and consistently reminding clients about your recommendations.
Educating clients on all the policies you recommend is planting a garden of opportunity. When another agent makes a mistake or a rate goes up, you want the client to call you first. Renewal review calls make sure your clients know you want their additional business and that you are an option.
Imagine if every one of your account managers who makes renewal review calls adds an additional 2 policies per week or 8 per month. What would that do to your bottom line?
| Monthly | Annual | |
|---|---|---|
|
Average Premium Per Policy |
$1,000 |
$1,000 |
|
8 Cross Sells Per Month |
$8,000 |
$96,000 |
|
Number of Team Members |
8 |
8 |
|
Monthly New Premium |
$67,000 |
$768,000 |
|
Average Commission Rate |
13% |
13% |
|
New Monthly Commission |
$8,320 |
$99,840 |
reducing remarketing
WITH RENEWAL REVIEW CALLS
It may seem counterintuitive that when you start proactively reaching out to your clients your remarketing is actually reduced, but it’s true. As part of our renewal review program we track the remarketing closing ratio. This is the number of remarkets vs. how many move companies.
Agencies generally handle remarkets as a combination of these efforts:
- Proactively remarket either via the producer’s request or automatically at a certain rate increase
- Reactively remarket when the client calls in upset about rate
Both of these lead to a lagging remarketing hit ratio, which leads to wasted time. Here is a breakdown of remarketing time spent.
| No Renewal Reviews | Renewal Reviews | |||
|---|---|---|---|---|
|
Average Time for a Remarket (hours) |
1 |
1 |
1 |
1 |
|
Average Remarkets Per Month |
8 |
96 |
6 |
72 |
|
Total Time Invested in ReMarketing |
8 |
96 |
6 |
72 |
|
Average Review Contact Ratio |
40% |
40% |
70% |
70% |
|
Remarket Success |
3.2 |
38.4 |
4.2 |
50.4 |
|
Remarkets Not Successful |
4.8 |
57.6 |
1.8 |
21.6 |
|
Total Hours Spent Non-Productive |
4.8 |
57.6 |
1.8 |
21.6 |
You can see clearly that your team may be spending 2.5 weeks per year just remarketing accounts, and that is a conservative number! If you can reduce remarketing by 20% but increase the hit ratio, you reduce total time and make it more valuable!
We know you cannot relinquish all remarketing, but when you are proactive you have greater control of the situation and can remarket out of intention rather than being bullied into it by a client.
“When you are proactive you can reduce remarketing and increase the hit ratio on remarkets. You can remarket based on intention rather than a client’s feelings about rate.”
At APP we achieve these numbers by training the team on how to handle rate. This includes proactively talking about rate with the client so you can control the conversation and reaction, clearly outlining all discounts for each carrier and providing agents a framework to follow before remarketing. Oftentimes you can work within the policy to help stop a remarket and earn back time to make renewal review calls.
earning more time back &
UPDATING CONTACT INFORMATION
The first 60 days of the renewal review process are the most difficult, just like anything that is really worth it!
Once you master calling proactively 100% of your renewals, you start to see a drop in the following:
- Upset client calls
- Clients contacting producers and needing to get to account managers
- Remarkets
- Scrambling to fix mistakes
When you can reduce inbound calls to account managers, they can better focus clients to account round, increase coverage and update accounts.
One key that can speed up your account managers is to have accurate and up-to-date contact information. Part of a good renewal review process is taking the time to update contact information for all parties and all methods. When you have ways to automate communication via text and email, you can pick up more time and efficiency for your team.
When you can reduce inbound calls to account managers, they can better focus clients to account round, increase coverage and update accounts.
One key that can speed up your account managers is to have accurate and up-to-date contact information. Part of a good renewal review process is taking the time to update contact information for all parties and all methods. When you have ways to automate communication via text and email, you can pick up more time and efficiency for your team.
how to make
RENEWAL REVIEW CALLS HAPPEN
If you want to make renewal reviews happen you should consider the following steps to ensure success:
- How you will track it in your Management System
- When you will call the insureds
- Incentive plan for the team
- Who will call who
- How you will tell the team
- How you will distribute calls
- How you will train the team to handle rate
- Scripts for cross selling
- Pre-Call Prep
- On the calls guidance
- Documentation in the system
- Agency standards of coverage
- Agency standards for remarketing
If your agency wants some help getting started we have a few options:
- Agency Performance Pack has a 6 month video training course with all of the documents you need.
- Agency Interactive — you can purchase a few consulting hours to help you on your way.
- Agency Performance Program — join us on a 2 year process to make your agency ridiculously amazing, including training on renewal review calls.
