Automating personal relationships with your clients may in fact be the bane of your brokerage business.
Brokers often repeat the well-known mantra that long-lasting, meaningful personal relationships are an essential element in keeping their clients’ business. But perhaps paradoxically, in several instances, the basis for client retention may in fact require interrupting automated processes that are designed to improve the efficiency of transactions between brokers and their clients.
Brokers with high client retention rates, for example, are leery about direct billing, in which the insurance company sends out bills and insurance policies to a broker client directly without brokerage intervention. The process is designed to save a brokerage time and money in administrative efforts and expenses, but brokers say they are seeing higher retention rates when they see the policies before they are delivered to the clients.
“We have an in-house processing team, a team of crackerjack processors,” said Liz Cosgrove of Macdonald Chisholm Trask (McT) Insurance. “They physically look at a renewal.
“That’s really hard these days, with automation. You may never see a policy if you don’t ask for it to be stopped and looked at, and if you’re not proactive.”
The processors take a look at certain situations flagged for the purpose of intervention. It might mean a policy increase, or a policy that does not combine home and auto insurance needs. So if, for example, if a processor sees a policy renewal increase of 16%, they can make sure an account executive knows to contact the client before the client goes shopping for a better price from other brokers on Main Street.
Telephone call centres can also potentially and unintentionally weigh down a brokerage’s client retention rates. Stuart Macleod of Macleod Lorway Financial Group said a policy of ‘no voice mail’ is among several reasons why his brokerage has a 90% retention rate.
“We do not have and will not have voice mail,” said Macleod. “We find that a lot of people are turned off by, ‘Push 1 for sales, Push 2 for claims or Push 3 for changes.’ We have a live receptionist in every office, and we have a rule that the phone can’t ring more than twice. I tell our people that if a client is calling you, it’s not because they are happy. It’s because they have a problem, or they have a question, or they need more information. There’s something that they want from you. And if there is a problem, it’s only going to get worse the longer you keep them on hold.”
Macleod said maintaining continuity in contact between clients and individual brokers is also an important part of establishing personal relationships. To do this, his brokerage offices assign personal lines brokers (PLBs) to clients according to the client’s last names by alphabet.
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(Incidentally, he prefers calling them PLBs rather than Client Services Representatives (CSRs), because he feels CSRs does not properly reflect their licensed expertise.) There is a ‘buddy system’ at the brokerage so that if the one broker is not available to take the client’s call, someone else will be there to take it.
Brokers are also making sure they don’t simply send out policy renewal notices by rote and hope the client merely sends out the cheque. Cosgrove said her brokerage has a protocol of calling the client 60 days prior to renewal to go over a policy with the client. This helps increase retention by keeping the broker’s ears to the ground about any potential changes to the client’s coverage needs.
“We did research and we found that [brokerages lose clients because] things had changed,” said Cosgrove. “Clients would get a renewal, they would go shopping, they would go to another broker and – lo and behold – that broker would give them a lower rate.
“Of course they had, because the clients had retired and they were no longer driving back and forth – or the kids had moved out of the home – but the clients hadn’t mentioned these changes to their previous broker.”
