I was recently asked if I had any statistics about insurance agencies who performed annual client reviews.  I do (somewhere), but lost interest when I couldn’t turn up anything after ten minutes of folder foraging.  But I did run across some stats from which you can reasonably extrapolate the kind of results your insurance agency might get if you performed annual reviews.

• 83% consumers want an annual review – NAIC Survey
• 90% want all their insurance in one place – Progressive Survey
• 6.8 is the average number of insurance policies per household; most agencies average less than 2 (this includes life, health, disability, an agency should have an interest in these other products that are out there –

Selling other insurance products, such as life insurance, can actually improve the retention rate of other products the agency sells. A 1998 report… showed that the retention rate of automobile policies improved when the customer purchased more than insurance from the agency.

The retention level improved from 61 percent to 83 percent in policy year five when a customer purchased three or four products from the same agency. The rate improves from 44 percent to 75 percent in year 10 and from 35 percent to 71 percent in year 15.

Yet, the percentage of American households who own multiple lines of insurance from the same agency remains small. Only 6.9 percent of all households have purchased p-c and life insurance products from the same agency, LIMRA reported in that study.  National Underwriter, 2003, Issue #2)

Of course, there are reviews and then there are reviews. The content and positioning of a review questionnaire should follow the objectives the agency has for the activity. I recall visiting a large agency service center a few years ago when they were sending out renewal questionnaires. At the time, the response rate was about 30% – respondents overwhelmingly asked to be re-quoted to see if the agency could get them a reduced premium.   I’m sure someone around there has a bad taste about that still.   There was a problem with the questions the agency used on the questionnaire.  Customers seemed to think there were one of two outcomes:  either the agency was going to sell them more stuff thereby increasing my costs, or they were going to make the agency re-quote my policy to reduce my costs.

Effective review formats consist of questions to turn up potential gaps that may not be addressed in standard policies.  An online format can be sampled in an Annual Review Wizard from Confluency Solutions (request a review if you want to try it out).  The Wizard asks what has changed and puts the agent in a position to follow up with suggestions to adjust insurance protection for those changes. This format is focused on creating opportunities to discuss other products and capture more policy relationships – a follow up is necessary in a process like this, and an agency needs to know it has capacity for the activity that will be generated.  But a review can be an effective account development and retention tactic.  You just have to have a little faith in my extrapolation…or maybe you have some results of your own you wouldn’t mind sharing?

I was doing some light research while drafting copy for target market website landing pages, and once again, allowed the internet to pull me into a digressive side alley. So of course I have to drag you in with me.

The cover article in a periodical widely read by agents and companies, Rough Notes, caught my eye. The September, 2008 issue features an agency that is able to provide high levels of service thanks to technology: Technology Backs High-Service Approach at 7-Person Agency.

What is instructive about the article is that all the ‘technology’ referenced in the piece is internally focused: insurance company-to-agency via download and real time rating, internal efficiencies gained going paperless (that can mean several different things, but that is a post for another day). There are a handful of platitudes about ‘service’ in article: ‘customer-focused’, ‘service “through the internet’; ‘Technology has allowed us to communicate with the younger generation…through email’; ‘We’re able to meet with clients more frequently, assist with claims, and provide them with quotes from other companies if that’s what they want’. These are the same kind of general, ‘service’ claims agents have been making since eight seconds before the advent of dust.

My point is not to cast doubt on the featured agency’s ability to deliver these service generalities better than other agencies. The point is that too often we assume internally focused technology and efficiencies result in better service. There is an old and well validated axiom: work expands to fill the time available. If we create time through efficiencies, but do not explicitly fill that time with measurable, customer focused activities, the void is often back filled with more internally oriented work.

What caught my eye about the article’s title was the juxtaposition of the words ‘technology’ and ‘high-service’. My mind leapt to the assumption that some kind of customer facing technology was at work in the featured agency. That I made the assumption is my problem, but it does raise another point. Technology for pushing data around the agency, or to and from the company, is not technology that consumers care about. Too often I still see agency websites touting a ‘state of the art computer system’ when all there is to brag about is an agency management system and some kind of comparative rater. That will engender a great big, consumer yawn every time. If a consumer is to care about technology, direct benefits need to be described – that is, here is how you will save time, or here is why your protection will be better. Indirect benefits – we’re more efficient so we might be able to spend more time with you – just don’t resonate.

There is nothing to suggest that the featured agency is using technology to systematically develop their customers and differentiate their agency. It’s all about saving time, and putting that time savings to work in an ad-hoc way will result in’higher-service’ that is inconsistent at best.

I don’t mean to suggest that efficiency is not important; it is a key to profitability and sanity. But having more time is not the same as providing value-added service (which the Rough Notes cover suggests the article is about). That is a point we felt was being missed too often when we conceived Confluency Solutions four years ago, and the point is still being missed, I’m afraid.