Renewals are Crucial for Your Insurance Business : Learn Why!
Blog: Insurance Support World - Blog
The insurance sector is continually evolving, and you are most likely focusing on developing and selling new insurance products to increase revenue. Yes, this is crucial for your business to thrive; but the real growth is hard to achieve if your company lacks overall customer loyalty and has inconsistent policy renewals. If your customers are not renewing, you have a long way to go for capturing your desired insurance market share.
Since you want to increase your renewal rates, you first need to know what you should do to improve customer loyalty.
In comparison with the cost of retaining an existing customer, getting a new one is five to twenty-five times more expensive ( HBR ). This is a big reason to divert your focus a little more toward customer retention.
In order to ensure your customers don’t leave you at the time of renewal, you must consider the biggest factors that drive customer loyalty. A Bain & Company report reveals that a higher Net Promoter Score depends upon five major factors, which are as follows;
- Cost reduction
- Saving time
- Reducing hassle
However, more important than understanding the importance of these factors is effectively acting on them. These are even more crucial for your young customers having a lot of value potential for you.
Less than 1 in every 5 millennial customers would give high scores to their life and P&C insurance providers for the aforementioned factors.
Thus, to ensure your customers stay with your company once their policy tenure ends, you need to work on keeping them happy and satisfied, which can be done by improving your renewal rate. Start with determining why they’re leaving and finding customer churn causes.
Ways to Improve Renewal Rate
1. Organize & Analyze Your Data
Analyzing customer data (for instance, customer support logs, complaints, compliments, etc.) can help you understand the most common issues your customers face and what they find best about your company. The best way for this can be regularly asking customers for their feedback.
This will help you identify problems you might have been unaware of for a long time and validate your already in-process improvements to rectify several problems that often lead to customer churn.
Here’s an example of customer churn; a client whose claim is delayed or processed incomplete or declined without their fault might not do business with their provider again and might refuse to renew their policy.
2. Identify & Improve Problematic Areas
Once you break down data into sections, you will get to understand what causes the most churn. With this information in hand, you can take the next best steps (rectifying the issues) to improve the renewal rate. For instance;
- You may provide customers with additional support in situations that might lead to churn.
- If a product exceeds a high churn rate, you need to find what’s wrong with it and fix it.
- If a product doesn’t deliver the value customers expect or want, consider increasing the list of benefits.
- If you find a series of negative customer feedback regarding any process (like customer support or claims processing), change the way you do the work.
3. Make Policy Renewal Easier for Customers
You must also manage involuntary churn; outdated billing information is one of the biggest reasons a customer may end up experiencing involuntary churn, e.g., credit card failure. Having such process-related issues can lead your insurance business to lose loyal customers. To address these problems;
- Establish a communication system that automatically sends reminders to customers with pending renewals when the renewal date approaches.
- Have a team or system to guide customers, helping them throughout the policy renewal process.
- Confirm payment details.
- Record payment status.
- To learn more about improving the renewal process and keep up a competitive edge amidst these tough times, read through the points given below.
4. Make Sure You Collect Complete & Accurate Renewal Data
With most of your staff (probably) working remotely, efficiency improvement is the main focus. Technology solutions can help you save time in managing some functions like submitting customer data and working collaboratively with underwriters.
With a customizable renewal system in place, you can simplify and improve the collection and submission of renewal data, improve staff efficiency, and add value to customer relationships.
5. Identify Insights into Claims
The first step toward enhanced claims management is to have your customer’s claim information that you can use to measure and improve results. Moreover, integrating external data sources and KPIs and utilizing advanced analytics can help you identify claim trends that were undetected before.
With easy access to these insights, you can take preventive actions for your clients. As you start handling claims efficiently, your customers will realize your product’s value, and they will likely stick to your company.
6. Follow Up!
Most claim experiences are excellent, but a few are not pleasant. Thus, by following up with your customers, you can enhance their claim experiences. Now, in order to have a follow-up process in place, establish a communication procedure following which your team can contact customers who have filed claims. They need to follow up with them regularly until the claim is settled and the customer is satisfied.
When customers have a poor claims experience, they will most likely not tell you; they will silently leave your company by raising a request for policy cancelation.
Therefore, whenever you get a complaint, take action on it, rectify the problem, and keep the customer. Remember, if a customer is happy with their claim, they are likely to renew the policy.
7. Policy Renewal Rewards (for Customers)
You can offer some benefits to your customers, making them feel valued. Also, your customers will feel they are missing out on an additional benefit by canceling the policy. While your bucket of rewards might have many things in it, here are a few ideas to reward your customers. Give your customers;
- An appreciation treat
- Access to your best customer support executive
- A unique customer service email address or phone number
- A special discount card (they can use at local businesses)
There are several other ways you can improve the renewals process. And if you find you have less time for that, or it is too difficult for you to manage it, assign this work to someone or look for external policy renewal services. By Joining hands with an insurance back-office service provider like Insurance Support World, you can get more time that you can spend on delivering high-value services to customers.
At ISW, we are experienced insurance professionals meeting the back-office needs of insurance companies and agencies since 2008. To learn how we can help you with policy renewals, management, or any other insurance back-office function, call us at +1-646-688-2821 or email at email@example.com. Share your requirements with us; talk to one of our consultants today!
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