Using Newsletters to Improve Insurance Customer Retention

At the start of this retention series, in the first post I listed a handful of tools or actions an agency can begin to seem immediate retention improvement.

The first listed was NEWSLETTERS, but nothing more was said.


In this final post on retention, lets delve into the details of putting a newsletter into action.

Why do you need one?

As mentioned before, customer contact is key to improving insurance customer retention, and the newsletter is a great foundation to Customer Communication Plan.

Also they can be very easy to setup and automate with little expense, creating a high return on investment.

So how do you set one up?

1.  First, scrap the paper.  Yes, I have read some studies that suggest a paper newsletter mailed out to customers gets read more than an email newsletter, but there are drawbacks to paper.

Paper is expensive.  A newsletter will easier cost $.50 to $.60 a piece.  If you do that monthly on a 1000 customer book, you are easily dropping $500.  Yet that same newsletter in an email format would be free to $30 a month.
Paper is harder to generate a call to action.  Email makes the call to action much easier, because you can create links to email or your own landing page.

Paper is harder to track results.  Most email services will tell you whether something was opened and links have been clicked.  It’s easier to split test emails

2.  Choose an email service.  There are multiple ones to choose from:  Aweber, Mailchimp, Constant Contact.  You will not find a consensus among marketers about which is the best.  Explore on your own.  I use Mailchimp for my newsletter and have found it easy to use.

Mail services are great because of the tracking ability, and they allow you to set up unsubscribe features, so you don’t feel like a spammer.

They also provide templates that allow you to drag and drop content in professional looking design.    Most will make sure their templates are mobile friendly as well.

3.  Gather your email addresses.  For newsletters, don’t limit these to current customers, but include prospects and lost business.  They will unsubscribe if they don’t want the content.

4.  Create a content calendar.  Monthly is an appropriate schedule for best results, but you don’t want to scramble each month to come up with new ideas.  Spend a couple hours looking over a calendar, and deciding which topics are appropriate to each month.  Don’t just think insurance topics, but what is going on in your community.  Will you have parties in the office at certain times of year that you will have pictures you can place in the newsletter?

This may lead to the question:  Where do I get content?  The easiest place is your companies.  Many will have sample newsletter content that you can easily copy, paste, and adapt to your agency.  One carrier offers almost 70 distinct newsletters.  That will keep you going for nearly 6 years–not bad.

5.  Finally, block off time to set everything up, and automate as much as possible.

So do you have one in your agency?  Any tips for the readers?  Please comment below.

Theron Mathis

P.S.  I hope you enjoyed this retention series.  Look out for the May newsletter for next month’s topic.

Insurance Customer Retention: A Tale of Two Agencies

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness….sorry, wrong story.


Here are two real stories with similar insurance customer retention issues but very different results (names have been changed to protect the innocent).

Story #1: Jones Insurance resides in a medium size Midwestern town. Due to market conditions, their companies contracted leaving them with only a couple of companies. Their largest company has had major internal changes as well increased loss pressure because of bad weather.

The result is that prices have increased dramatically over the last year, causing customers to shop and move. This has led to a 3 year decline in customer count.

What would you do?

Here’s what Jones did. They contacted the carrier to discuss rate activity. The company said there was no room to lower rates because of loss activity. The company did provide the agency with a list of upcoming renewals and the potential price increases. They also increased the deductible credits, because a lot of the agency’s customers were at a 250 home deductible.

Nothing happened….customers still left, and the agency was frustrated.

The next time I ran into this agency, I asked how things were going. He mentioned that his main company was killing him, because all their customers were leaving due to price increases. I asked a lot of questions, and discovered the information above.

My next questions was whether he was proactive in calling customers ahead of time.

He responded, “We don’t have time.”

I asked about sending out postcards since the phone was so time-consuming. He was afraid of the cost.

“What about email?”, I asked. “I don’t have a list”, he said.

I walked away from the conversation as frustrated as he was, but for very different reasons.

How would you have responded?

Here are my thoughts:

You can only control what you can control. The agent can’t control the company rates. The marketing rep can’t either. Even if their complaints take root, it would probably be 6 months before new rates would hit the street. So continuing the current path would continue to lead to customer run-off.

So what can he control. He can control how he helps his customer respond to the increases. He can’t control their reaction, but making an attempt to contact, sympathize  explain, etc. may not save every account but it is action in the right direction and would save more than doing nothing.

He can control his access to markets, and now may be a good time to look for more. He can’t control whether they appoint him, but he can stack the deck in his agency’s favor. Look professional, demonstrate activity in the agency, and feel modern with an online presence.

Story #2: The Smith Agency is larger than Jones but facing a similar problem. Like Jones, they have had markets contract on them in the last several years. One particular market left the agency, forcing them to roll to a current carrier. Thankfully they had a carrier willing to take on the business, but that is when things get interesting.

The carrier that took the book transfer setup a price match on incoming business. This made the transfer fairly seamless, unfortunately at the first renewal, a storm hit. Pricing jumped from the matched price to the “natural” rate which was dramatic.

Customers were jumping ship, and when they called, they were angry. The agency immediately called the carrier frustrated and disillusioned at what could look like a “bait and switch”. The company listened, but wasn’t able to make any pricing concessions.

The agency was short-staffed and did not have the manpower to requote every renewal, so they had to get creative.

What advice would you give?

They assigned one person to reach out to the customer and walk them through the renewal increase. They did everything to avoid shopping the renewal, no matter the increase. They looked at deductibles, discounts, replacement values, and potential cross-sells.

Yes, they lost customers, but more amazingly their policy count went up, because they found cross-sell opportunities. Premiums went up because the majority of the customers kept the rate. They just wanted an agency that cared.

The process changed the agency as a whole, and they implemented the same strategy throughout the PL department, and had similar results.

Knowing both these agencies, I learned valuable lessons: Action trumps inaction, don’t let fear ruin your retention efforts, and control what you can control.

What are your thoughts?

The Lost Business Log: A Simple Customer Retention Tool

Don’t Let Quiters Ruin Customer Retention

The “Lost Business Log” is an easy tool you can use today that will help you get a handle on your customer retention.

not this type of log

This is a back-end tool that allows you to track customers leaving your agency.

You may be thinking, “How can counting my losses help me keep more business?”

The Lost Business Log does several things that will improve customer retention.

  1. It never lets you forget that customers are being lost and need to be replaced.  Even if you are only losing customers through death and moving, it is important to track because while there was nothing you or your companies did to send them away, they are still gone, and you need to replace them.  

  2. It forces you to change your marketing before it is too late.  Think about our first example.  If death and moving were the only reasons people were leaving, what does it say about your book?  Your demographics could be old or full of transitional type customers.  How does this change your marketing?  Reach out to younger customer or look for a more stable demographic.

  3. It gives you a crystal ball on at-risk customers. What are reasons people move: price, customer service, claims service, etc. The log forces you to ask these questions.  Perhaps it causes a followup call because they left without telling anyone.  You can send out an exit survey on why they left (email makes this easy). You can get them to commit to becoming a prospect again when things change. If possible find out their x-date, new company, and pricing. Then they become a prospect again.

  4. It can help you redirect referral sources.  If a particular lead source, whether outside like a realtor, mortgage lender, car deal, etc. or inside like a customer is the source of a lot of lost customer you can stop the lead sources.

  5. It can help you pre-qualify new business.  You may find in looking at your lost business that there are certain characteristics they all have in common.  They be monoline customers, multi-incident, single car, single driver, etc.  If you find these to be true, it can change how you quote and sell.

Here’s how to set it up.  You can use or paper or something like Excel, and include the following columns:

Customer name         Policy type         New company         New price         Xdate         Reason   

Don’t over-complicate the process.  Place a spreadsheet on everyone’s desk, and review as part of your month end checklist.

You will find this simple task will make a big difference, and help everyone feel the pain of losing customers, leading to conversations about how to keep them longer.

Theron Mathis


Insurance Retention Strategies: The Customer Communication Plan

In the last post, I listed a number of things that agents use to effectively increase retention.

Very few things impact retention as readily as customer contact.  talk to customers for insurance retention

Your customer gets hundreds if not thousands of Insurance Impressions every day.  I just spent the last month watching the NCAA basketball tournament (Go Cards!), and I can’t begin to count the number of insurance commercials I saw.  It’s not only TV that bombards your customer with these messages; radio, billboards, and direct mail are always reaching into your client’s eyes and ears.  I don’t think a week goes by that I don’t have an insurance solicitation in my mailbox.

So what impressions are leaving your customers if they only hear from your competitors, and not from you?

Studies and best practices say you should reach out to your customers, 3-6 times a year.  This sounds like a lot, and you may be seeing dollar signs with the cost of print ads, newsletters, and postage.  It doesn’t have to bust your budget.

Not everyone needs to hear from you 6 times a year.  In fact, only those customers in the “retention danger zone” need that level of activity.  That danger zone is 1-2 years.  Make sure those young customers get more touches, because after year 3 customers tend to stay much longer.

So what kind of communication do you need to make with them.  Calls are one touch, then you can add birthday cards, thank you cards, seasonal tips, holiday cards, agency newsletters, emails, and social media touches.  If you rely heavily on phone, email, and social media, then print and mail costs are very low.

Let’s focus on the annual customer call.

Agents that do this often try to call customers pre-renewal or at anniversary date.  This can work, but unless you have the automation set up to prompt you to do it, it can be tricky.  Most management systems track anniversary date, and you can easily generate a report on monthly basis of that month’s customers to contact.

One solution is to forget anniversary date, and use the alphabet.  This will help you roll through your book of business throughout the entire year.  In January call A-Bs, in February call C-Ds, in March call E-Fs, and so on.  In agencies that don’t use alpha-splits among their CSRs this is a great solution.

These calls do not have to be complicated.  In fact, you will reach very few people, and will get a lot of answering machines, which is good.  The main point is to let them know you appreciate them, and are looking out for them.  This is a big deal.  Think through all the business relationships  you have, and how many times throughout the year do you get home from work, check your messages, and hear a thank you from those businesses — rarely.

leave a message for insurance retention

Here’s a simple script:

“Mr. or Mrs. ____ this is _______ from the _______ agency.  Everything is okay with your policies, we wanted to call and tell you thank you for doing business with us.  If you have had any changes in your household or have questions, let us know.  Thank you.”

If you do get a customer on the phone, this is a great time to verify email and other contact information.  This is really a courtesy call and it’s not necessary to sell anything.  However, if you uncover something, like another line of business, such as a boat or motorcycle, vacation property, or scheduled items, set a time to get back to them with information on those issues.

You may be thinking, do you really need to call everyone?  It would be great, but feel free to segment.

There are a lot of ways you can segment your customers.  You can rank them based on the revenue they generate to the agency, tenure, centers of influence, etc.  Definitely if it is a customer you would rather get rid of, don’t put them on the list.

Make sure those in that retention danger zone are on the list, as well referral generators and high revenue clients.  Then prioritize from there if you don’t think you can do them all.

Here’s my question for this post.  Do you do customer reviews?  Do you have a communication plan for customers?  What has worked best for you over the years?  Let us know in the comments below. 

Be Productive,

Theron Mathis

Bonus:  What do I do if I don’t have a management system?  Is there an old-school way to automate?  Yes, and it’s simple.  In fact, I use this method even today to prompt me to follow up and remember future to-dos.  It is the simple accordion file made up of 31 days and 12 months.  Or you can create your own 43 folders.  My father taught me this in his agency years ago.

Here’s how it works.  Today is April 12th.  Let’s say you want to follow up with Mr. Jones next week on a quote proposal.  Drop the quote or any other reminder with a couple scribbled notes in slot number 18.  Review your accordion file every morning, and on the 19th you will see your reminder to contact Mr. Jones.  Once you write him as a customer, you know you need to check in with a call in 6 months.  Put a note in your October slot.   At the beginning of each month, clean out the current month folder and place it in the appropriate date for that month.  If you review this every day, this can be a lifesaver to trigger follow-ups and contacts.


Getting A Handle On Customer Retention in Your Insurance Agency

Agency consultant John Fear talks about the three Rs of Insurance: Referrals, Rounding, and Retention.  These are like the three-legged stool, remove one leg and it collapses.

If you are a newsletter subscriber, you know that April’s focus is on retention, and Retention is crucial to success in the Insurance Industry.

Insurance Customers Leaving Your Agency

Before we move forward, we need to get a handle on agency retention.  Agents that perform well at this metric, track it on a regular basis looking for ways to improve their score.  I have worked with several agents that assign a person to retention improvement, and tie a portion of their compensation to retention improvement.

So, the first step to improvement is to figure out where you are.  If you are a direct writer, this is easy, because you represent one carrier, and your company can run the figures for you.  For Independent Agents, this can be a bit trickier.  Company reports will be deceptive, because your agencies numbers are always better than the individual companies.  The reason is that because you lost business with one carrier does not mean it left the agency, there is a good chance that it found a home somewhere else in-house, but you need to verify it.

Most management systems can handle this type of reporting, but don’t make it too complicated.

There are three ways you can track retention:  written premium retention, customer retention, or policy retention.  Tracking premium retention is dangerous because rate increases can mask customer run-off.  Customer retention is good, but I like policy retention, because it can alert you to problems quicker, and allow you to salvage customers in the danger zone who have moved a policy or two out of the agency.

Pick a benchmark date (month-end is easy) and determine how many policies (or customers) you have (subtracting any new policies you’ve written over the previous 12 months).  Find how many customers you had a the previous year’s month end, and compare the two.

Here’s an example:  At the end of March 2013, you have 1000 policies.  If you look at March 2012, you might find 1000 polices as well.  Retention looks good.  Don’t forget new business.  Between March 2012 – March 2013, you wrote 500 new policies.  You need to subtract that from your 2013 to get an accurate picture of how many policies you kept.  In this example, you really only had 500 policies at the end of March 2013.  You only have 50% retention.

This is an extreme example.  Very few agencies will have such a low retention, but even in this case, you can see how many policies you had to write to stay even.  Acquisition costs for new customers are really high, and retaining more would have allowed you to write less and stay even or possibly see growth.

Insurance Customers Exit This Way
Don’t Put This Sign On Your Door

Let’s talk about some simple retention strategies that you are able to implement into your agency.

1.  Agency Newsletter.

2.  Selected Pay Plans.  EFT / Recurring Credit Card / Paid-in-Full.

3.  Pre-Renewal Calls.

4.  Customer Reviews.

5.  Account Rounding & Cross-Selling.

6.  Social Media.

7.  Value Creation.

8.  Service Center.

Theron Mathis

Next Steps:  Over the next several weeks, we are going to dig into some of the above strategies, and detail out how agents are using them effectively.

Here’s what I need you to do, let me know what is working in your agency, and what strategies you would like to know more about.

Here’s how you can give us your feedback.

Comment below,  email us at, or message us on Twitter @productiveagenc.

Insurance Carriers Scrap Credit Scoring for New Rating Variables

In a move that will be seen as radical by many in the insurance industry, several companies are scrapping Insurance Scoring (Credit) for newer non-traditional rating variables.

The two most controversial variables being rolled out by carriers are:

1.  Vehicle Appearance.

2.  Buying Habits.

CarsIn the past, many agents would inspect vehicles for pre-existing damage before adding comprehensive or collision insurance in order to prevent fraud or improve their auto profitability.  This new “vehicle appearance” variable goes beyond mere damage inspections.  

Car color has been determined to greatly impact the risk profile of the customer.  Most consumers intuitively understand this, and will not be surprised that red and yellow vehicles attract greater theft and driving violations.  The decision to buy such certain colors tells a company a great deal about the profile of the customer.

Stripes and two-tone vehicles perform poorly as compared with mono-color vehicles.  Other features such as neon plate covers, added spoilers, and spinning hub-caps, also will create a negative risk score for the customer.

Interiors of cars are important to rating as well—leather vs. cloth has been found to greatly increase risk profile, and beaded car seats tend to relax drivers beyond the ability to react quickly in changing traffic circumstances.

Agents are worried because of the workload issues this will create, because initially they will have to inspect every car until companies discover databases matching car appearance with VINs.

dollarBuying Habits appears to bring even greater pricing accuracy than any previous variable.  Carriers have partnered with Amazon and Google to understand the buying purchases of their customers.  The fuzzy logic that Amazon uses to determine the likes and dislikes of customers also creates a risk profile that companies are beginning to use.  This will necessitate the use of correct customer email address within the family they can pull the Amazon data.  In order to gather data from Amazon, many companies are considering entering an arrangement to sell their own data, so Amazon can more accurately market to their customers. 

Buyer-discount cards, such as those distributed by grocery chains and gas stations, are also ripe for data mining that will allow companies to price their insurance products based on buying purchases.

Companies are extremely excited about the potential that these new variables will create more accurate risk profiles of customer leading to greater underwriting profits, and are considering such things as height and weight of driver along with political affiliation.

Bob Johnson, President of Risk Managers Insurance Co, proudly stated, “Vehicle Appearance and Buying Habit data will lead into deeper market segments and more accurate pricing.  While the initial logistics will be onerous to our agency force, we believe the long-term benefits will outweigh any extra workload.”

Welcome to the new era of Insurance Pricing,

Mark Eugene

P.S. April Fool’s Day!