How to effectively resolve insurance customer concerns with rate increases
Actively contacting clients pre-renewal may be the only effective way to address customer concerns about rate increases.
If Verizon increases my cell phone bill by $5/month, I’ll get upset.
There are a few things they can do when I call up:
- Explain the additional value that I’ll be receiving for my $5.
- Apologize but explain why they have to due to unavoidable costs.
- Credit my account the $5 to keep me as a client.
All of these might keep me as a client but none of them will leave me feeling good about the company. Why? Because I had to call them!
Renewal team: Communicate with clients annually
There are very few insurance agencies who connect and engage with their clients on renewal, let alone preemptively communicating changes and updates. The general consensus is, “if we don’t make light of the rate increase, most won’t notice and those that do will call in to discuss. We’ll lose a few angry clients but it’ll cost us too much to create systems to connect with every client so we’ll swallow the bad PR and 3-4% retention drop.”
Related: The insurance agency renewal blame game: people or process?
Retention rate is a major consideration for all agencies, but not enough worry about the impact of bad press on their brand. One upset client is much more likely to spread their pain to 5X the people than a happy client will.
We decided at G&N Insurance to make an investment in our renewal process and as a result, our retention is over 95%, our brand is preserved, and our sales team is never without leads to call.
Pre-renewal communication is key
We have virtual assistants working pre-renewal to set up an internal renewal team to communicate outbound to our clients each year. The conversation is intended to address weaknesses and opportunities that we’ve found in the plan.
The annual pre-renewal communication brings value to our clients, many of whom have never experienced such a process. It allows us to control the discussion and discuss additional lines of insurance and valuable endorsements as opposed to passively reacting to upset clients that their bill went up $5.
Actively contacting clients, we’ve found, is the only effective way to address customer concerns about rate increases. If you have a client who contacts you to discuss the rate increase they found, you’ve already lost.
Related: What drives customer satisfaction?