How to Fix Your Insurance Retention ... and Grow | Episode 93

Walking into like an answering machine and having the blinking light and it has it says ten. And you're like, oh my god, I gotta listen to ten messages. Yeah.

Hi Sean, this is Mr. Johnson. Could you call me today about my insurance policy, please? Doodaloo.

Next message.

Um, yeah, it was kind of like that.

Welcome to the podcast dedicated to real estate, insurance, and building your business. Join us as we take you along our own business building journeys with additional wisdom from our network of local and national experts. Welcome to Bricks and Risk.

This episode is brought to you by Property Management Redefined. PMR is not just managing properties, we're creating partnerships that build long-term success for property owners. John and his team can be reached at manage at gopmr.com or by phone 267-753-6005. Tim. Yes, John. Who's a good client for PMR?

Property management redefined is looking for property owners who value three things accountability, reliability, and a results-driven approach. We want to maximize returns, but still provide client and tenant satisfaction. There's a lot of property managers out there. There are. What does PMR do really well? Biggest thing is they're seamless and they're worry-free. So with that approach in mind, it allows the property owner to put their trust in PMR and know that the results will be there. The other thing I think a property owner is really going to value because they do it so well is that they have a local expert team, boots on the ground, managing your properties and your tenants' expectations every day so that you feel good about your investments.

We have millions of listeners out there.

Tens of millions.

If they want more information, how do they find PMR?

Right here, guys. Reach out to John Stax and his team at Property Management Redefine. We'll take good care of you. Hey everyone. Welcome to another episode of Bricks and Risk. I'm Timmy.

And I am Tim's uh co-host, Sean Mooney, M O O N E E.

Do you know what's funny? When I was younger and growing up, because I grew up in a household with three siblings, so there's four of us running around. Right. You had to label stuff. Oh, yeah. Because you had to remember like who's who's yours, what you had to write your names on on things. Right. I wrote Timmy G with a period after the G on everything that I owned, as to not confuse it with Pat or Ryan or Mary Beth. Fun fact. There you go. There you go.

Now you know. Now you know everyone. All right. What are we getting into today? Today we're gonna talk about insurance. Uh our topic today is gonna stem from a post that I picked up uh online somewhere. On uh which social platform did you find that one? Uh Facebook. Yeah. Facebook. Um my favorite. But uh it was it was hard lessons uh from um an insurance client retention standpoint, and how this one particular agent was really struggling with uh handling retention with his and within his agency.

All right. So we've we've talked to the audience before about our nothing doc. Oh, yeah. Nothing divided by nothing equals nothing.

If you listen to like two or three episodes by now, you'd fully understand what the nothing oh we should we'll bring it up and we'll scroll the video. Oh yeah, we will.

We'll we'll give something we'll give something to Tara so he can flip through it. Oh, that'll be good. So, like, just as like Mooney is as interesting he is with his outfits, uh, he's also equally as interesting with his nothing dock, because it just has all this stuff. It's got like text, it's got hyperlinks, it's got these big pictures, it's got screenshots, it's like all this stuff.

Sometimes it's just that. Sometimes it's my comments that will layer on the actual link or doc.

Do you know what's like? It's like the bedroom closet from the movie Uncle Buck, where he's packing to go see the kids, and he opens the closet and all the stuff flies out, and then the bowling ball falls and smashes them on the head. Yeah. That's what your nothing doc is like. So I have to like go in very carefully to like decipher it. You have to brace yourself. You do. Like, I have to be like, oh man, this is gonna take me 15 minutes to even just learn how to read it.

Some crypto stuff in there, social media stuff in there.

So when we chose this one, I think as much as it stood out to you, like seeing it on Facebook. What stood out to me was the fact that what this agency owner was saying. So basically, guy or girl, I can't even remember, what he was saying was he'd been in the business for about two years. He has somewhere around 800 clients, which sounds pretty good. Good. Um, and in that two-year period of getting the 800 clients, he started losing 50 a month. Yeah. But to counteract that, he was saying, I'm losing 50, but I'm also gaining another 50. So he almost hit like a plateau of 800, and then he'd lose 50, he gained 50. He loses 50 months by months, he gains. So he's never growing from 800. Um, so I wanted to kind of like obviously toss this one over you. This is insurance, this isn't real estate. But I wonder.

I think it does lend itself just to the overall idea of how you operate the business, and maybe not specifically from a retention standpoint, okay, but from a real real estate standpoint or any other type of business industry is how can you uh conduct business that's going to um maybe keep clients, get get repeat clients, or get referrals from those clients? Okay. So I think it's kind of it washes into those other industries, but for our purposes, we kind of like lay it out just from the insurance standpoint. All right. So here's a question.

Yep. Would you say in your experience that it's normal to hit some kind of number, whether it's 500 clients, a thousand, ten thousand, doesn't matter. Right. To just get to kind of like a plateau or a ceiling and just start losing people, filling the gap. Losing people, filling the gap. Like, have you seen this in your business where you kind of reach like the mountaintop and it's hard to like keep going?

Yeah, because there's there's different factors that kind of force your hand when it's the insurance agency and how this occurs. Okay. And so one might just be staffing, right? So you start an agency, you hire two salespeople, and you don't hire a service person inside of your agency. So there's no support, like people are slinging deals. Yep. But there's there's no one to support them once they come in. And so you start your agency. Well, oh, I need to grow. I need to grow, I want to grow fast. I want to get this thing off the ground, I want to get going, I want to grow this agency. So going in with that mindset is is fine. And so that one of the shortcomings where you might hit that plateau is because you have two salespeople, you know, how much can you possibly sell in a year, two years, three years, right? Um and then insurance is a retention game. So in order to um have good retention, you need to be able to service those existing clients.

Yeah, so it's like it sounds like they were falling into the trap of let's grow this thing like really fast. Like you said, 800 in two years sounds sounds pretty good. Yeah. But if all you're doing is spending your time on getting new clients, that means there's less time to focus on retaining clients. Yep. And I think if all you're doing is looking to grow, like they said, they're losing 50, yeah, but they're gaining 50. They're they're selling, they're selling all the time, they're meeting new people. Yeah. And the example in it was it sounds like it said it was 100% online. Yep. And what I gather from that, it's like it's probably more like cold lead generation, like not so much relationship. Yeah, buying leads, running ads. Exactly.

That sort of thing.

Yep. So one was, you know, is that a normal thing? It sounds like, yeah. Sounds like they went pretty fast, but sounds like they're missing the the element of support so that they're not losing 50 a month.

Um Yeah, and that could be that could be one kind of angle that may be causing that. Um the other might be that they put all of their business with one carrier that's super hot right now. And then they maybe uh the underwriting guidelines are not it not that strict. Oh, so that they're allowed to like, you know, right, right, right. So they got good rate, and you can get a lot of deals through to issue coverage for that maybe some other carriers wouldn't, but then they're you know, you gotta at some point pay for that. And so by way of by way of increased rates, so let's say, you know, you're putting 75% with that one carrier, and they take a huge rate increase. Right. Well because all the carriers are different, right? So now your main horse, you know, just took rate of you know, 18% or 22%, and you're just focused on selling, then and maybe you don't have other carriers that can compete. Maybe there's uh just by way of rate, uh some attrition there where people are leaving your agency because you sold them on price, right?

So like that's a factor like an uncontrollable aspect of the market could be because you like you said, you herded all of them into this one carrier. Let's say you got 10. Yep, but this one carrier has 75% of the business. If they increase their numbers, people are gonna jet. Yep. A lot of people, yeah.

Well, especially like cold leads, right? You're getting the cold lead, you're you're winning their business because you were six dollars less than their current carrier, right? So now that it renews, now you're six dollars more. John Skippy to do is out the door.

John Skippy to do.

Okay. Like that name. So staffing could be one, rate could be another thing, and maybe a couple other different factors that kind of play into that. But those being the mean two.

What are your thoughts on like marketing? So one of the things they had said is that it came 100% online, which I would attribute more to like coldly generation. You're just putting Facebook ads or you know, you're just like, you know, spending money on websites that feed you names and numbers and making cold calls or sending cold emails or text messages or whatever. Yeah. Like you're talking to people you don't know. Right. So if you're talking to people you don't know, like explain like that method of growth versus yours being a little bit more relationship-based, word of mouth, referral. Yep. How do you think that's playing into his scenario here because he doesn't have that? 100%.

Yeah. So my model is a much slower. We're not going to write 800 new clients in two years. Right. We we we don't, I don't want to. Uh it's not a desire of mine. Um if I could get 800 of the the clients that I like and and you know, get them in that little target zone, that'd be great. Um but all the things that come with it. Um so yes, uh, that person is definitely, you know, spending the money to bring the clients in. And I there's a dir direct uh relationship of people leaving because it's the cold internet lead. It's not gonna be uh people that stick around. They're not uh psychologically, they're not buying insurance from us because we are the trusted advisor. That that that's just a different relationship. Um and so they're probably more inclined to leave if uh if the rate goes up or you're not getting the service, they're like they're they'll be gone.

All right, here's a good question. In your state farm and all state days, yeah, where other people were running the agencies and you were like a salesperson at the agency. Yep. Were they doing similar methods to grow their business? Was it a lot of online lead gen? Was it mailers? Like how in the offices that you've worked at previously to your own, yeah, were they running those marketing methods?

Yeah, so Allstate was more relationship driven, I would say. Okay.

So it was a lot of, you know, who's like, this is the brokerage that I want to lead. I'm okay with the Allstate brand, but I'm gonna build my agency off of relationships. Yeah. So you got to watch that.

And then State Farm, I would say, was more uh the like a heavy dose of uh at that time, uh like direct mail and different uh marketing campaigns like that.

Like almost like walking into like an answering machine and having the blinking light, and it has it says 10, and you're like, oh my god, I gotta listen to 10 messages. Yeah. Hi, Sean.

This is Mr. Johnson. Could you call me today about my insurance policy, please? Doodaloo.

Next message.

Um, yeah. It was kind of like that. And like 17 faxes that, you know, we're going back in time on that one. Uh fax machines where they were just pile up on the fax machine when you walked in on a Monday morning. Stuff like that.

All right. So let's compare State Farm to Allstate. You worked at those two agencies. But it's it's not, it's not like buy, you know, each agency owner uh picks and chooses what they want to do. State farm was more cold, Allstate was more warm because that's what the owners led with.

Well, also, too, it's like we you know, if you get a period where, you know, some of these carriers just run hot with like hot rate, take rate decrease because they want market share, different things. So when you have a period where you've got a really good carrier with a really good rate, you're more inclined to spend more money on different advertising vehicles. Because you can beat people because your close ratio your close ratio is gonna be much higher. Wow. So your dollar spend is gonna be much more efficient if your close ratio is higher.

When you were at Allstate and they were building it a little bit more through relationships, did they have a high um let's call it retention rate? Or did they have a high fallout rate? It was it was a lot of retention.

Yeah. Uh uh, and then we measure them, you know. So I would think that although there was a period of time where it was like uh they took uh some some heavy rate like back to back, like where it was like rate, and then six months later was more heavy rate. And so there was there would be periods where you would see much higher. But on average, I would say uh we probably ran that at 85% retention. Oh wow, is my guess, something like that. And then 80, 90. Gotcha. You know, something in that range.

Talk about Mooney insurance brokers. Yep. How is it today? I mean, you don't have to give numbers if you don't want to, but would you say your retention rate is very high?

Uh yeah. I mean, we score out depending on the year and depending on you know these other different factors, probably about 93%. Wow. Yeah.

That's really good. Yep. So on average you'll lose around 7%. Yeah. And then is it usually kind of like this guy that you'll bring back the 7% in new business? Well, the hope is you go a little bit, a little bit more than that.

Yeah, so you have a growth number, you know, if we're growing at 12%, right? We're gonna take that seven and you know, be on top of that.

How about the uh last few years in the hard market that we've been in for insurance? What's it been like? Has retention been harder to keep?

Yeah, so uh it's kind of been steady uh despite the increases, and more so only because it's more difficult to place a risk, you know. Like in in other years, you'd have a carrier that had like a takeaway rate, right? So they're super aggressive on rate, right? And they're and they're you know taking market share and and growing that way. In the last couple of years, everybody's kind of maintained that steady position of we're all taking rate. Right.

It's like no matter who you're with, the the your bill's gonna go up.

So a lot of our conversations are yes, uh, and we talk to everybody. I mean, every day we have these conversations as to hey, looking at the renewal, re review the renewal, this uh policy is up 11%, and this one's up 13, right? Um, but when I look at these other eight companies, you know, there's nothing better out here. You're still in a good position premium-wise, and then it comes down to carrier service claims and all that. But just being uh in and around the premium number, uh, we find that that's what's happening in most cases. And so on top of that, the difficulty to place new insurance, right? So part of the conversation of a review on the current existing account, hey, when's the last time you did your roof, right? And if they're like, uh, you know, I did it uh probably 20 years ago, well, that's gonna change the way that we decide to go forward with uh a new carrier. Gotcha. So with all of those factors in play, it's kind of been a steady pace where we're not seeing on a different year, you'd see a dramatic uh decrease in retention. Yep. But just by the way of the industry is right now, um it's kind of maintained at you know, level 90, 91, 93%, something like that.

Nice. Hey everyone, this is Tim, your favorite bricks and risk co-host. But don't tell Sean. I hope you're enjoying this episode, and I'll get right back to it in a moment. Our audience grows through word of mouth, so if you would please take a moment of your time and give us a review on the platform you're on, that would be fantastic. Please also help spread the BR word by sharing your favorite episode with a friend. We greatly appreciate your time and trust. Now, back to the show. One thing you had said on a previous episode was you were talking about how having an insurance brokerage, so you have multiple carriers between property, you know, auto, and life, you know, call it like 50 or so. Right. That that's been a leg up for you in this market because if someone is at one of the big box shops we mentioned before, and they just drop them, or say it's going up by 20, 30% no matter what, yeah. What's that been like for adding to your book of business? Like, are you finding that when you get most of those calls, you can either A, help them or B, you know, get the number a little bit lower or both?

So so just imagine the scenario where you are with um an agency that only writes with one carrier. Like, here, like take it or leave it. This is your policy, this is it, right? So that's gonna dictate to that client, you know, how they kind of respond or decide to stay or or leave. With us, we get a lot of clients that, you know, reach out to us first, right? Um, because it's a relationship, because we've provided a good level of customer service. There's a good relationship with a client, they trust us. And so we have a lot of people that you know often reach out. Hey, renewal's coming. I saw it. Can you take a look at it? Like, is this you know within the norm of what you're seeing? Yeah. And so we have the ability to then take that and then look at the market. Market of ten other companies. Right. So they don't need to go out and call. They don't need to make 10 phone calls. Right. So it's definitely, definitely a leg up of uh dealing with clients at the renewal time because we can kind of gauge and survey and kind of get a uh an understanding of what the market is for that client, given all of their circumstances. And even too, we have some clients that, you know, maybe had a claim, you know, two years ago. Yep. And then we can kind of see, oh, you know, that claim's gonna be falling off in a year from now. Like, let's not do anything right now because your position's gonna greatly improve, you know, nine months from now. Interesting. So it's just having these conversations uh with the client and kind of really going back to the point of we're really trying to put them in the best position possible, you know, and maybe that, maybe that is waiting.

I'm assuming in this hard market, because it's still a hard market around here, is a lot of your time filled with just the retention-based calls? Yeah. Like someone's worried about their monthly payment going up or their annual payment going up, or you know, just you know, that I got a letter. They want to like check out my roof or my walkway or something like that.

So And we're getting non-renewals and we get an inspection, renewal inspection letters. Explain what a non-renewal is. So you had two accidents in the last year.

And they just say, We're not, we're done with you. As you know, as I know.

Um the carrier can decide.

Uh Sean, yeah, uh, we have a problem here. Um I know this was a couple months ago, but same thing. What do I do?

Although yours went down this year. I don't know if you caught that.

That's because I'm the man now. I'm not doing it anymore. Bigly. Um uh yeah. So uh what were you saying? Um, so saying like keeping those people, retaining those clients, I'm sure you're getting like a ton of calls just to explain and or redirect the client from this carrier to that carrier, understand why things are the way they are.

It's a lot of time. It's it's for sure. Uh, I mean, we could probably hire someone uh into the office and just have them work on renewals. Like, wow, that's a full-time job. Yeah. Uh the one thing we did find, we worked, we were able to work with our vendors to kind of short, shorten up the process. So we integrated our AMS system, which is our our data bank, our housing of our existing clients, and kind of connected our um rating platform. Okay. So all when we run it through, we so what we did was we ate we were able to kind of like create a shortcut because of the volume. We needed to find a better way to do it, right? Find some efficiencies in this. So we are able to take the information, send it through, and and get a pretty quick idea of like where those numbers are falling. Interesting. So it almost like analyzes or dissects that person's policy. Yep. It takes their information, you know, all the drivers, all the vehicles, all the cars, and then and then you know, kind of uh floods over to our reading platform so that we're able to get a really quick snapshot. It might it's not gonna be exact, but I don't need to be exact, you know.

You just need to understand it without having to spend like a half hour reading and you know.

So what's the trend, right? So like is it a trend that there's something else that's dramatic out there, or is it more, or is it kind of like in line with with everything else? Gotcha. So uh we were able to do that, and we're looking now to try to even just do it even quicker and faster. Um, we've got a demo with a company next week that's kind of an AI. Yeah. Of course. Yep. Mr. AI over here. Um that uh can I I think can even make it uh quicker where we can just have that client uh go to the link, fill out some information.

Does does the hand come out of the laptop screen right now say, Hi, Sean, nice to meet you. You're like, pleasure to meet you, Mr. AI. Yeah, or like it's Mrs. AI. It's exactly straight. Exactly. That's what have that's where AI has come now. Yep.

Actually, it's uh it's me on a hologram with my hand shaking. Near the hologram, and then their hologram comes out the laptop screen. Yeah. So uh we're we're constantly right, just where where everything's headed and going is trying to find more efficiencies, trying to because I think that's the you know, lending better customer service, yep. Um for clients. So if we can do that, um, you know, that's what we're working towards.

All right. Well, let's do this. Let's go over our tips for listeners and watchers. Yep. We had three. Wonder why we have three. Don't know.

Tim thing or something.

All right. Let's talk about some of the tips you have to improve retention.

So this would be for agencies out there. Yep. Right? Maybe it's this guy box or independent, doesn't matter. Doesn't matter. Um, this agent where we pulled this from. Um, just tips on on maybe some strategies that you can work on to maybe uh, you know, go from an from an 80 to an 85 or 85 to a 90. Um, but I think in that scenario that we kind of talked about in the beginning, it was um ultimately it's that agency that's really just sales driven, right? Their focus is really just sell, sell, sell, sell, sell, sell. And so for the new agents out there that have that mindset, um, I would either A tell them or advise them to maybe steer away from that. Um, not completely.

Maybe sell, retain, sell, or sell, retain, retain.

Or just spend money, right? If you're, I don't know how much money you're spending on marketing, but take some of that marketing budget and go hire someone to come in that can help you with supporting your existing clients. Because if you have another person on the boat that's helping with the agency customer service, that's that is going to directly impact your retention number. Interesting. So that that would be if I had one communicate. Well, that's the first tip.

Getting ahead of ourselves, folks.

Staffing, right? You got to have someone in there, and Trudy in our office does an amazing job with our clients. She always gets people saying, uh, or to me, Trudy's great, she does a great job. She's always following up, she explains it in a way that I can understand. So go get yourself a Trudy if you're looking to improve your retention.

Go to the Trudy store, pick one out, and that way your clients will say, What a lovely Trudy you have. Exactly.

Outside of that, number one is communication. Communicate with your clients how they want to be communicated to.

Right. You would say that because it's almost like you say communicate with your clients. Some people are like, just pick up the phone, call your clients, or like just go to your laptop, email all your clients, or text all. You made the example of the way they want to be communicated. Correct. Some people want to call. Correct. Some people want an email. Correct. Some people want like a text or a letter, whatever. You know, it just depends on the person. Yeah. That's that's that's good advice.

It's gonna make a dramatic impact on the way that that client perceives your agency. If you, if they're I mean, there's some people out there that are text only, right? Yeah. And if you're not able to meet them there, then they're more inclined to leave because you you're not meeting them the way that they want to be communicated to.

Yeah. All your emails went to spam, Sean. I don't really check my email that much. I mean, how many people do you know? Like, oh, you left me a voicemail? I don't I don't even Oh gosh. That's like the number one today. It's like you leave someone a voicemail, you're like, Forget it. They're not getting it. Right. I do it to just be polite. Right. But then people are like, You left me a voicemail? I'm like, why did I even do that? So that's like prefer that I don't.

That's a great example of meeting your client where they need to be met. Good advice. Number two, give your clients the tools to win. What's a tool? A tool can be really anything. I'll give one example as to an online account. You know, we get c clients calling, hey, can I get access to my stuff online? You sure can. Here, I'll send you the link, registration, boom, have it over, right? Or paperless uh policy renewal documents.

I mean, tool could also be a band.

Tool could be a band.

And tool could also be like like a jabroni. Like that guy's a real tool.

Yeah.

We say in Philly sometimes people say jabroni. What a jabroni of that dude.

We'll stick to like Okay, an actual tool. A tool, uh, a service for your client um that will improve the relationship, reduce the friction between you and your client, you know? Uh find something that will enhance their opinion of your agency, right?

What would be like an example? So if you're like, hey, someone needs a tool to make the experience that much better, what would be an example of something that like your brokerage or like one of your carriers could offer to make their life easier?

Yeah. So there's um, I would say one um out there would be uh an application like a glove box, right? That's a company that has built uh an a an agent-to-client app. So you get them signed up, and that's an that's a tool that you can use to have your client get that access online.

Like get an insurance card, look at look at coverage, look at billings, oh, did I pay this?

How's my billing set up? Something like that. How come I don't have Glove Box? Because I don't use it. Oh, okay. But I'm just giving an example. You're like, it's good. It's not it's good if you want to know to use it. Well, for me, the drawback is I'm gonna I'm not gonna get in trouble here, but uh the drawback is once you're in, you're in. Right. And so I've done it before where you've had the app, but then they change the way it's done. They they change the way it's done. Now you have to change your whole, you kind of have to follow what they're doing. Oh, so now they're telling you how to like run your back end a little bit. Oh, yeah, that doesn't sound like fun. So it can be good. And if you know you're an agency that's looking for that, it could be a tool that you use to enhance the client experience. Okay. Just a just an example. What's number three? Number three, responsiveness. Responsiveness to your clients lends itself to customer service. Right? So the better that you can respond to questions, changes, anything that happens on a day-to-day basis with your clients, being responsive is going to improve the level of customer service, which is going to directly translate to a better retention rate. Awesome. And that can be going back to the example of hiring a per another person for staff, uh that's just solely there for client customer service.

How common are VAs, virtual assistants in your world? Very, very common. Are they more common than having, let's say, like an actual like person in your office? You say it's like no, but uh 20% of agencies might have a VA kind of thing? I would say it would be higher. Uh I'd probably look it up.

We'd probably get a number, at least a an average or something. Um, but I would say I would say if I had to guess well, maybe I'll draw back on that number, just thinking of agencies, and most agencies are older. Uh I would say it's north of 25%. Oh wow. If I had to guess.

Quarter to a third use VAs.

And there's a lot of firms out there. There's a lot of firms um that will get you placement through their firm, like we did. Yeah. We did it for a period of time. You had VAs. Yep. And it worked really good. Um, but then it didn't. So then, you know, change. Um, but very common, and um, you know, some are better than others, but it really it really depends on who that person is, who that VA is. Yeah, right. Um, but uh some do a great job. Some people love theirs, you know. Um yeah. All right. Pretty common. Why don't you shut this one down? All right, folks. Thanks for stick sticking with us. Uh, if you want to reach out to the show, get us on the email, bricksandrisk at gmail.com. You can leave a review for us on Spotify or Apple. And sometimes we read them on the shows. We'd love to read them on the show. Uh, social media. You can find us on Instagram, Facebook, or on YouTube, and we're at a great community in LinkedIn that is continuing to grow. Find us there.

That's it. All right. That's all we have for this one, folks. Thank you for tuning in again to another episode of Bricks and Risk. See you next week. Thank you for joining us on another episode of Bricks and Risk. Our goal is that you walk away with one or two valuable nuggets, and we greatly appreciate you sharing your time with us today. You can find all BR episodes on Spotify, Apple Music, YouTube, and anywhere else you get your podcast content. Until next time, keep learning and keep growing.