These bonus features are on top of significant premium savings via discounted insurance rates. According to research complied by dmv.org, consumers can save as much as 15 percent in premium, on average, each year with a packaged policy. Each time a policyholder adds another policy with the same insurer, other discounts may apply.

Why do some insurers offer packaged, multi-line policies at lower cost? They gain significant economies of scale by servicing a single customer with multiple policies, as opposed to many customers with one policy each. These savings in labor productivity are then passed on to consumers via the discounted coverage.

Insurers also are aware that their retentions are higher when they can write multiple lines, and these companies pass along their acquisition cost savings in the form of package credits.

Revving Retention

These various features play an important role beyond greater sales—they also may boost customer retention metrics.

“There is just more loyalty when a customer has multiple personal lines insurance policies with the same carrier,” said Rick Price, president of Price Insurance in Lake Forest, Ill. “It becomes harder to `break up'—to move the business.”

Price said that clients “know if they switch carriers on the auto insurance just to save a couple hundred dollars, yet want to keep the homeowners' insurance with the same carrier, that insurer is going to charge more for the coverage. There is no question that packaging insurance policies with a single insurer has had a positive impact on my agency's customer retention priorities.”

Read another Getting Personal column by Paul Morrissette, “Build Brand with Blogs”

He touted another plus in the packaged policy concept—fewer coverage disputes when one insurer is writing all the personal lines policies. “You avoid the finger pointing,” Price said. “Getting into a contentious situation where two separate carriers each argue that the other has insured the exposure causes enormous anxiety for the policyholder. With one insurer, such issues don't arise.”

Yet another advantage is more manageable budgeting by consumers. “A big cause of consumer stress is billing—that's where many of the insurance carriers I represent really fall down,” Price said. “They have disparate systems for processing bills, and also claims, policy changes, and so on. Obviously, having one bill is a lot simpler and easier for the client.”

Value for Agents

Having a single carrier on multiple policies further benefits agents and brokers in their own business operations. Eric Gordon, a partner with the Denver Agency, a Colorado-based firm, said, “When we conduct an annual insurance review for a client, we need to evaluate multiple policies that are often with multiple insurance carriers, each of them dated differently.

“If we can consolidate all these policies with one carrier at one effective date, it streamlines the process for both the client and our agency.”

Rather than managing an array of policies with differing renewal dates, the agency performs a single annual insurance review. Not only is it efficient for the customer, but it also has a positive impact on errors and omissions liability insurance. “We see this as a one-stop, turn-key approach,” Gordon said.

Packaging insurance policies also promotes long-term relationships among carriers, agencies and customers. The customer comes to realize the benefit of establishing a carrier relationship. “When a clients spreads his risk and generates a larger combined premium with one carrier, it creates a more meaningful relationship,” Gordon said. “Such stable insurance programs have been important to us, particularly with respect to our high-net-worth clientele.”

He added that if something does go amiss, a multi-line insurer is “more apt to stay on the risk than carriers insuring risks via monoline policies. “There's just more loyalty both ways, which creates a sense of security,” Gordon said. “The client takes comfort in knowing that they are well protected because the insurance company is underwriting everything.”

Gordon said that packaging business is not more important than providing the right coverage: “While many insurers say they can package policies, as an agent you want to suggest only those that offer the best coverages and ancillary services.”

He added that package policies underwritten by a carrier that prides itself on risk prevention and mitigation—as much as risk transfer—has unexpected added value. “When you consolidate a program it often creates a total account premium that wasn't there before, enabling the customer to take advantage of services like wildfire defense,” he said. “We've had instances here in Colorado where, in advance of a coming wildfire, the insurer will dispatch trained firefighters to take all steps necessary to save the home, cars and other assets—lining the property with sprinklers, hosing down the structure with fire-retardant gel, driving the cars off the premises, cleaning out the gutters, and moving flammable outdoor furniture.”

Buying property and personal security services directly from unique vendors can cost tens of thousands of dollars. “With the right insurer, this vital protection against disaster is complimentary. It can save a life, a fortune or both.” Gordon said.

Packaging business with one carrier, and linking clients up with complimentary services provided by insurers, are proven client retention tactics. Most strategy fails, however, unless you communicate. Price advised that agents and brokers should communicate via social media and blogs that tout customer reviews, while supplementing these words with traditional means of correspondence.

Winning the loyalty of customers isn't dependent on a large advertising budget. Expert advice that minimizes risk while simplifying the insurance transaction—now that's a package that benefits everyone.