Keeping Insureds on the Books

Since leaving the independent agency system three and a half years ago to embark on a career as an insurance consultant, I have seen the good, the bad and the ugly when it comes to agents renewing business for their clients. Many times I’ve recommended that my clients switch agents, even if it meant keeping the same insurer. As a former agent, I hate doing that. But the reality is that if you can’t take care of your client during the year and offer a professional, well-thought out renewal, then you don’t deserve the business.

Consider a recent renewal I encountered with one client, a large commercial general contractor. The incumbent agent, who just the year before received the business, calls on the contractor once a year at the annual review; never offers value during the year; is difficult to reach during the renewal process; and then e-mails in the proposal. When it came time for the renewal meeting, the incumbent and a competing agent met with us to present their proposals. The incumbent had 365 days to prepare, yet was easily outworked by the competition.

Unfortunately, this is not an uncommon scenario. However, you can avoid this situation and keep your clients from falling off your books by bashing three key myths. I know these myths exist because I was an agent for more than 17 years!

Myth 1—Your client only wants to see or hear from you once a year.
Fact: Your client does want to see and hear from you as long as you’re adding value. It doesn’t have to be insurance related. Send them your latest position paper on a risk management issue so they can use it at a safety meeting, or even offer to lead a safety meeting. Don’t think that sponsoring a hole at their charity golf tournament takes care of this one. Be a voracious learner and pass on information to help your insureds’ business.

Myth 2—What you know is more important than how you deliver your renewal.
Fact: What you know is important. However, if you can’t deliver it in a professional manner, the business will go to the other agent who knows as much as you do but is able to better express their message. You need to have equal amount of steak and sizzle. Practice your presentation skills. Be creative on your proposals. Think about what’s in it for your client.

Myth 3—My account assistant can build the relationship. I need to sell more new business.
Fact: Dropping commission splits for renewals may be good for agency bottom lines, but terrible for building long-term relationships. Agents have become too focused on meeting sales quotas instead of developing strong relationships with their existing clients. I understand the need to make a living. I also know it is easier to keep a client than to find new ones. It doesn’t take much.

If you focus on the facts rather than the myths, you will earn more referrals from your clients and increase your new business closing ratio. But if you don’t spend more time thinking of your client rather than your next month’s sales figures, then you are bound to work harder to write new business to make up for what you lose. If you commit to busting these myths, then your success from higher renewal percentages and new business from referrals will catapult you to the top.

Believe me when I tell you consultants would rather work with strong incumbent agents. It improves the condition of our clients and makes our job easier. The beautiful thing about this process is that it really only adds a small amount of time over the course of the year. With improved planning, a little creativity and some professional development, you can increase your chances of building a client relationship that lasts for years. It makes your renewals easier for your client and for you. And, it builds a book of business that is the envy of any agent.

Dan Weedin (dan@danweedin.com) is owner of Toro Consulting, Inc., an insurance consulting agency in Poulsbo, Wash.