by LynnThomas
The insurance industry received some great news recently. Possibly you that have heard about JD Powers’ latest research indicating that bundling other policies with Homeowners created the greatest increased levels of satisfaction from 2011 to 2012. Bundling Homeowners with auto created the greatest improvement of 19% in satisfaction compared to 10% for those who have auto with another insurer.
One of the study’s most significant findings is that bundling additional products creates higher Client satisfaction levels with the insurance companies. There is a hidden and great surprise – bundling increases the Client’s intent to renew their policy by 18%! If the Clients have one policy, they are 28% likely to renew rather than 46% for those with two policies. That 18% increase is big news on which agents can capitalize.
This is an outstanding opportunity for insurance agencies to proactively create loyal Clients by delivering a positive bundling experience while they deepen their penetration into their Clients’ life. Remember, the more policies and services Clients have, the more difficult it is for them to leave. Why? Because they need to recreate each product and service with another agency and that is time-consuming and cumbersome. Think of each product or service as a thread. Three to five products creates a string and after three to four years there is a rope. It is far more difficult to cut a thread or string than a rope.
The major takeaway from this research is to always bundle policies. This is a win for everyone. If new Clients do not give your agency all of their business, then tell them that by renewal time next year, if you do not receive all their business, you will not renew them. Those Clients that do not give you all of their business would have left you anyway; save your valuable time to focus on those Clients that value your expertise and knowledge.
The second is to know that by asking about and educating a Client regarding your agency’s other services will help them to have more positive experiences. You are not bothering them, you are serving them. The third is that annual reviews are important as they give you an opportunity to demonstrate your value to your Clients every year. Do it every year; if the Client
does not want it annually, mandate it every three years. Your accountant wants to see you annually as does your doctor and dentist. Professionals stay on top of their Clients’ issues by establishing good timelines when a review is warranted and three years in this economy and marketplace is probably the outside limit.
The fourth is that through bundling, the Client usually receives a discount of 10% -15% which saves the Client money as well as allows the agent to customize the insurance to meet the Client’s needs.
These last two value bonuses: the annual review and discounts are priceless opportunities. They allow the independent agents to differentiate themselves from the pack, and this differentiation is necessary to have you and your agency easily thrive. This is a very good day for the independent agent!