Customer Retention - Insurance

Goals

To find the best practices for customer retention in the insurance industry, including primary healthcare, car, or home insurances.

Early Findings

Best Practices: Customer Retention in the Insurance Industry

  • Understand who the customers are: It is crucial to understand what customers need, their prospects, and what drives them. Thus, marketing strategies should be built upon customers needs and expectations. This clarifies the importance of customer segmentation, the practice of categorizing customers according to common characteristics (price-sensitive customers, service-sensitive customers).
  • Understand where referrals come from: A customer who comes to an insurance agency through a referral have a much higher likelihood of staying with the same agency long-term. An insurance agency should set up a referral program that’s going to benefit customers in the long run. "This program could be as simple as giving referrers a gift card or a percentage off their premiums. The most important thing about a referral program is that it should be “in the faces” of customers, so they know how they will benefit from providing referrals."
  • Multi-lining customers signed into multiple products: The more products an agency can get customers signed onto, the more likely they are to stay with the same agency. "Insurance companies can potentially increase retention rates by offering discounts for clients who have more than one policy with the agency. For example, a client who has health, life and auto insurance with an agency might be enticed to renew a contract if offered a more favorable rate on all three policies than a customer who only pays for life insurance coverage."
  • Personal Service : Insurance agencies/companies can increase retention rates "by providing greater degrees of personalized customer service to existing policyholders."

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