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October 14, 2020

How to Engage Better on Auto Insurance

Summary:

Believe it or not, your policyholders would like to hear from you more often―and communication can affect policyholder loyalty.

Photo Courtesy of Pexels

Don’t be hesitant to reach out to your policyholders. They want to hear from you — but in the right way. It’s all about creating and implementing the right outreach strategy.

Auto insurance consumers are shopping more than ever before, and that’s not surprising. A competitive environment combined with easy access to online quotes and an informed shopping audience has led to a shopping bonanza, even among loyal policyholders.

Carriers find themselves needing to retain valuable customers but may be nervous that their outreach might not be well-received. Do not fear. Your policyholders want to hear from you, if you use the right outreach strategy.

What’s your outreach strategy?

Does your strategy revolve around the renewal period? Do you simply send policyholders a renewal notice rather than make personal contact? Are you concerned they won’t welcome your outreach outside of renewal?

If you’ve answered yes to any of these questions, you’re not alone. Anecdotally, we know that many carriers are reluctant to reach out to policyholders outside of renewal for fear of putting them off.

However, if you avoid outreach outside of the renewal period, you could be missing an important opportunity to improve customer satisfaction, profitability, retention and upselling/cross selling initiatives. Why? Because believe it or not, your policyholders would like to hear from you more often―and that can affect policyholder loyalty.

See also: 5 Trends Changing Auto Insurance

What consumers are telling us

Our recent auto insurance consumer study, which surveyed over 2,000 U.S. auto insurance consumers who had shopped their insurance in the last year, indicates consumers are not being contacted by their carriers as often as consumers would like―and they’d like that contact to be more personal, not simply a standard renewal notice. After all, who wants to be treated like a number?

Across every age group, 74% or more of our respondents reported they want to personally hear from their carrier during their renewal period. Slightly over half are open to outreach anytime during the policy term. Almost one-third of policyholders would like to be contacted by their carrier both at renewal and during the policy term. Fewer than 14% are content with just a renewal notice.

Here’s the disconnect. Only 46% of respondents reported any personal contact from their carrier during their policy term, including renewal ―even though many are receptive to it, especially during renewal, when the vast majority of policyholders most want to hear from you. In fact, almost half of our respondents who shopped their insurance policy said their carrier’s failure to reach out to them influenced their decision to switch.

Who should reach out to whom?

While our study debunks the common myth that policyholders shy away from carrier contact and reveals that your policyholders do want to hear from you, there are a few caveats. One of them is, “I won’t contact my carrier. My carrier should contact me.” In fact, our research shows that almost half of policyholders are reluctant to contact their current carrier before switching to a new carrier. 18% of those who switched believe it’s the carrier’s responsibility to contact them instead.

But that’s not all. 19% of policyholders who didn’t contact their carrier before switching believed contact wouldn’t have made a difference. In other words, they were sure their carrier wouldn’t respond to their needs. Among those who shop, almost half who switch carriers are influenced to do so because their current carrier never reached out to them.

The message is clear. Connect with your policyholders, because they are waiting to hear from you. By upping your outreach and opening meaningful conversations with your policyholders, you can boost retention and create valuable, long- lasting relationships.

Engage with your policyholders…but on their terms

While it’s great news that policyholders want more engagement with their carriers― engagement that extends well beyond an automatic renewal notice, it’s not a green light for you to inundate them with irrelevant contact or content. Your customers want to engage with you, but they want that engagement to be meaningful and on their terms.

Most policyholders prefer to hear from you through email (90%), but quite a few Baby Boomers would also welcome a phone call (55%). Almost as many millennials are open to contact through a mobile app (43%). If you happen to know when policyholders are actively shopping, it’s good to know that the vast majority of those shoppers are okay with you reaching out within one to five days after they’ve received a competitor’s quote. However, they don’t want to be pestered. One post-quote outreach is enough for most policyholders.  

See also: How to Thrive in Auto Insurance

For carriers that have been reluctant to touch base with policyholders outside of the renewal period (and we suspect there are many), the message is―don’t be. But make sure you understand your target audience’s preferences first, then tailor your outreach to match those preferences.

What do your policyholders want to talk about when you reach out to them? More than you might think.

From increased coverage to bundling options to providing feedback that can help you improve your business, your policyholders are ready and willing to have important conversations with you. These critical conversations can lead to improved customer satisfaction, profitability, retention and successful upselling/cross-selling programs.

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About the Author

Ian Griffin serves as director, product management, insurance, for LexisNexis Risk Solutions.

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