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4 Reasons Your Insurance Agency is Losing Customers

by  Lianne Trantz  |  19 Oct 2017

Picture this:

Your sales are slipping and you can’t figure out why. It’s been like this for the last year or two, but it’s worsened over the past quarter. People aren’t renewing their policies with your brokerage.

It’s gotten so bad, you’re being ghosted by your most loyal customers — people you’ve shook hands with for years, sent birthday cards to, and even went to their kids’ little league games.

All gone.

But where?

You know they need insurance. It’s not like they sold their vehicle and moved out of town. So, you send them a friendly email. A “follow-up”. Something to remind them you’re still here… but no one returns your messages, or your calls.

This goes on for a few weeks until you finally realize what you suspected from the beginning: they went with another broker.

Why did this happen?

Maybe they found a better price somewhere else. Or, maybe they just can’t see a good broker when they’ve got one right in front of them.

No, that’s not it.

Your insurance agency is losing customers, so, what is it? 

You’re Still Using Outdated Technology

If you’re still using paper and ink around the office, it’s time to come to grips with reality. Your office is outdated, and it’s probably costing you sales and customers. Years ago, filling out paper applications was fine. It was normal. Today? Not so much. Customers expect fast service — they want to find a policy, fill out an application, and bind their coverage without leaving the comfort of their home.

They don’t want to go into an office across town. They don’t necessarily want an agent coming to their home or business. They want to click a few buttons in their browser and be done with it.

This is why disintermediation is threatening insurance agencies and why lots of agents are finding it more and more difficult to get (and keep) customers. Lack of up-to-date service and technology will cause your customers to cut you out of the equation completely.

Even if you have slightly more modern systems in place, it’s not enough. When a customer thinks “high tech,” they think of an insurance brokerage that can take their application online without a lot of hassle. They don’t really care what the excuse is for “bad” service. They don’t care about your problems. They care about theirs. And, they want them solved, fast.

If you don’t have a fully digital cloud-based platform, you won’t be able to compete against agencies who make it easy for their customers to log in, view policy details, connect with an agent, and manage their policy, make changes and see the endorsement in real-time. Customers today want to be able to even file a claim online and manage everything through a mobile app.

You Can’t Scale With The Times

Having a flexible insurance management platform is essential today. And yet, many brokerages don’t have one. If you’re unable to scale up because your management platform requires expensive software upgrades (or worse, complete overhauls), then you’re naturally going to be disincentivized to upgrade and expand your business.

But a more flexible management platform can help you scale up quickly without interrupting business. Without one, you’ll perpetually remain as you are and only be able to service a shrinking local market.

This is how Howden Broking Group was able to speed up its mergers and acquisitions, grow its brokering group, and expand its product line without destroying or disrupting what it had already built.

Prior to adopting an integrated management platform, they used many different technologies all running in parallel. It was an inefficient system, and it made it difficult for them to grow since they couldn’t see all aspects of their business in a simple and straightforward manner.

Once they switched to a more flexible and scalable system, data accuracy improved by 25%, with sales and cross-sales increasing 63% and 40%, respectively. Back-end efficiency shot up 60% and the speed of mergers and acquisitions improved by 75%, allowing the company to close deals in just 3 months instead of 12.

You’re Trying To Be A “One-Stop Shop”

One of the worst things you can do today is fake expertise. A lot of brokerages have moved towards a “one-stop shop” business model and it’s showing in their bottom line.

Most consumers intuitively understand that insurance brokers can’t be the best at everything. First of all, a lot of time goes into becoming an expert at one thing. So, if you claim expertise in 5 or 10 different lines of insurance, you’d better have an insanely knowledgable team.

Most brokerages don’t and aren’t even close.

It’s not that the team is bad. It’s just that an agency today cannot practically implement systems covering all lines of insurance and be masters at them all. They can either establish deep roots and relationships in one sector of the industry, or they can get surface-level knowledge and experience across a wide range of product lines.

An agent who sells auto insurance won’t be good at advanced life insurance policy design. And, a long-term care specialist won’t be an expert at business liability coverage.

There’s just too much to know.

Even if your brokerage could bring in specialists from a variety of lines, there’s still the problem of securing good brokerage contracts with the right insurance partners. Most good insurance companies want volume business. And, if you’re a “jack of all trades,” you’re not going to be able to give it to them.

This is why the Hylant Group, for example, chose to specialize in business insurance. And, over the last 80 years, it dug its feet into that sector of the industry.

The result?

Few other brokerages can compete with them in their space. And, for good reason. They have carrier relationships that other brokerages don’t have and specialized knowledge and decades of experience that can’t be replicated.

You’re Not Using Data Analytics

Data analytics is starting to become more and more important in the insurance industry. Without deep insights into your market, you can’t get the kind of information you need to truly understand your customers’ needs. Instead of being perceived as a trusted consultant, you’re just another annoying, pushy, insurance salesperson.

Using data analytics can turn this situation around and enable you to know exactly what your customer needs are...sometimes even before they do.

For example, let’s say a client buys a new vehicle with a lot of safety features, which they kept mentioning in their conversation with you. You ask about it, and they tell you that the cool new stain resistant seats will come in handy because his wife is pregnant. And, they needed a 5-seater because their 2 teenage daughters can’t drive for at least another year. You collect all their information, run an auto quote, and they buy a policy from you.

Six months later, you get a reminder — the policyholder’s wife delivered a newborn a few weeks ago. So, you reach out, congratulate them both and ask if they’d ever considered a life insurance policy on their child since they already have policies on their existing children.

Another year or so goes buy and you get another reminder — the daughters are old enough to drive. Time to add them to the parent’s auto insurance policy.

How did this happen so effortlessly? Through the “magic” of data analytics, integrated with a high-tech digital management platform.

This is how brokerages like Leaderim Insurance are able to adapt and change to market demands and avoid becoming stale or irrelevant to its customers.

Where To Go From Here

You’ve probably heard that technology is threatening the insurance industry. But it is actually taking the industry into the future.

A lot of what happens going forward depends on how you react to the new realities of the industry. For many brokerages, upgrading their infrastructure is crucial and will be the difference between staying competitive and going out of business.

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