How to keep your non-standard auto clients

When selling non-standard auto insurance, do you know how to retain your clients or are you driving away the business? There are a number of factors that affect retention, including:

The following will examine how those factors influence customers’ decisions to stick with you. Retaining the bulk of your business should help keep your company on the road to success.

First, understand that there are two definitions of retention: Part A and Part B. Part A refers to keeping clients on the book just long enough to get to a renewal. Part B refers to renewing the client and continuing to do so for years. Part B would be preferred. After all, it means you’re building a real book of business.

Financing and payments
Generally, paid-in-full policies have by far the best retention. The reason is obvious. The insured has paid for the entire term, so unless there is a claim or an underwriting problem that was caused by the broker, agent or company, the insured is likely to put his or her faith in you.

Following that logic, the more the client has put down on his or her policy, the better the retention. This holds true because of the same provisos as above; No one likes to lose money based on cancellation. If there is nothing to lose financially, keeping the policy active is less significant. Premium financing policies generally retain at least 15 percentage points better than direct bill and low-down clients.

Automatic electronic fund transfers (EFT) of monthly payments also can help to enhance retention for both premium finance and direct bill installments. So every client that you can convince to use this option should. Remember, policy cancellations for non-pays will be the greatest contributor to cancellation, and subsequently non-retention.

Keep an eye on first and second payment defaults. You want to circumvent these to get the policy to renew and earn commissions that you don’t have to give back.

Underwriting and documentation
As simple as it sounds, underwriting the policy correctly so that there is no uprate is key to lowering first payment defaults. A simple, courteous reminder call that a payment is due also can help.

When underwriting and gathering documentation, run the motor vehicle record and review the application to ensure there are no blown rates and that the policy is acceptable to the carrier. Provide the required documents upfront, and nip a lot of problems in the bud. Paying attention to details in paperwork upfront will eliminate headaches on the back end, and can substantially lower loss results.

Trying to stick square pegs into round holes and fudging gray areas in underwriting will lead to lost clients and carriers, lawsuits, and potentially worse. In the long run, it could blow your agency right out of the industry when your business should be succeeding and earning more as its book builds.

Service and sales
The key to good service is communication; ignore communication at your peril. If you want to aggravate someone, simply refuse to be in communication with them when they need to be in touch with you. Make yourself unavailable, hang up on them and do not return calls. It will ensure lost business. If you really want to upset your clients, don’t allow them to finish expressing their thoughts by cutting their communication, belittle what they have to say, and be outright rude or indifferent to their issues. You will surely upset them, and they will leave you as fast as they signed up.

People may buy on price — and they definitely leave on service. So apply the principle, “The customer is always right,” and do what it takes to make the customer happy if it is within your means.

Good service starts with the agent properly explaining coverage and payments, and making the client feel comfortable and confident that he or she has been well serviced. It continues with dec pages. Documents should be received in a timely fashion by the carrier and/or its agent.

The forms sent should be self-explanatory and easy to understand. For many, even simple forms can be rough to understand. When customers call, be patient and ensure there is understanding. Being condescending to clients will not gain any favor. It is right up there with indifference, which is a basic lack of true care and unfortunately is seen far too often these days across industry after industry.

The Internet can help elevate your ability to deliver timely information to clients. For example, simple e-mails acknowledging both the receipt of service requested and completion of said service helps the client to see that the service issue was handled, which eventually enhances the quality of service delivered and aids in retention. One good service is to provide all clients, agents and brokers with a 24-hour e-mail “hotline” for important service issues. The e-mails should be monitored by the senior executives of the company in real time with the mandate of immediately handling important matters to the full satisfaction of the clients.

As you run your agency, remember that most folks like to do business with people they like. The personal touch goes a long way, even if that personal touch is expressed via technology … but that’s another subject.

Richard Acunto is the founder and CEO of Survival Insurance Brokerage, Guardian General Insurance Services. He has more than 25 years of experience in non-standard auto.

Topics Auto Agencies Underwriting