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Communicate: Questions Agents Should Ask Insurance Customers

September 26, 2017
Aartrijk - Converse to Convert

Converse to Convert!

By John Novaria

Communication may be the most important ingredient of success. It doesn’t matter the organization — if people aren’t talking and listening, then things don’t get done properly or they don’t get done at all.

This holds true for insurance agents. Smart agents recognize the importance of communicating regularly with their customers throughout the year, not just at renewal. That’s because policyholders experience important transitions throughout their lives — some happy and some stressful — and these changes in family or financial status have an impact on one’s risk profile. Whether it’s financial gain, acquiring a new asset or increased liability, almost every milestone is an occasion to reevaluate exposures and coverage.

By consistently asking new and existing customers questions around life events, agents can offer practical advice at the right moment.

Agents who serve as true risk advisers are aware of this. They know that if left to their own devices their customers won’t occasionally revisit their insurance coverage, nor do they have the know-how to do it properly. Smart agents also know that to maintain or grow their book of business – and minimize E&O exposure – they must have conversations with customers during these pivotal moments.

‘What’s Happening in Your Life?’

Sending a birthday card is a thoughtful gesture, but other life events are far more relevant and often warrant a decision about insurance. For example:

  • Marriage: A small percentage of an agency’s customer base will marry in a given year, and perhaps half of these will defect to another carrier or agency. Agents should move swiftly when they learn of impending nuptials and get in front of those clients.
  • Cohabitation: Policyholders who live together but are not married make up a growing percentage of an agency’s book. Living together is often a precursor to or a substitute for marriage. The decision to share a living space and assets is an important one that should include a discussion of insurance.
  • Relocation: Every year 12% to 15% of an agency’s customers move — younger ones more frequently. Buying a first home is a time of increased defection risk, given the emotion surrounding the event and its complexity. This is a critical time for the agent to offer counsel about coverage needs and options.

These life events all can affect a household’s risk exposure. Marriage and cohabitation mean the merging of personal possessions, which can change the limit of coverage needed for personal property. Moving can involve the purchase of a home or condo, a person’s most valuable asset, which can’t be rebuilt without insurance.

Anticipating life events and providing exposure/risk guidance also can improve retention. Agents should implement a consistent, repeatable process throughout the customer life cycle – from onboarding through renewal and at key moments in between. They should prepare a checklist of the important “moments” in the life of a typical policyholder and regularly consult that list to prompt an insurance discussion. The results can be surprising. Agents often learn more than they expected to by asking a few good questions.

Help Customers Plan Ahead

Too often the insurance value proposition focuses on the here and now, luring prospects with the promise of saving them time and money. While it’s important to make it easy to get a quote and obtain affordable coverage, the most successful agents see themselves helping customers plan rather than peddling products. They are educated and licensed professionals, and they know it’s their job and responsibility to ask questions, identify exposures, and provide solutions that protect the lives and assets of their clients. They steer the conversation away from the lowest price and policy limits and instead focus on helping customers understand their exposure to personal risks — including the limitations of existing coverage.

By consistently asking new and existing customers questions around life events, agents can offer practical advice at the right moment. Helping clients understand changing exposures leads to coverage selections that spell the difference between full recovery and unnecessary financial hardship.

Using a checklist and other questions, a smart agent creates a win-win-win by executing a proactive risk strategy:

  • The agency maximizes lifetime client value by increasing the number of policies per customer, improving retention rates and reducing E&O exposure.
  • The policyholder is covered for unpredictable exposures — or is at least more educated and thereby consciously chooses to buy (or not buy) certain coverages.
  • The carrier issues more policies and reduces coverage gaps in its policyholder base.

Consumers rarely think about insurance coverage on a day-to-day basis. They buy what they think they need and move on. Receiving a renewal notice or invoice prompts them to act again.

Smart agencies cultivate a deeper dialogue with customers throughout the year — and certainly well in advance of the renewal date — to retain and grow their books. Conversation can lead to conversion.

 

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