By focusing on simple, yet often overlooked key performance indicators (KPIs), agents can begin to undertake the various steps that will allow technology to help drive meaningful improvements, according to Brady Polansky, CPCU, vice president of agency relationships, EZLynx.
Polansky’s presentation was part of the virtual conference SIAA (Strategic Insurance Agency Alliance) hosted on innovation and Insurtech. It was designed to help independent insurance agencies expand their digital capabilities. Polansky’s presentation focused on what it means to be a digital agency, what steps are involved and why it matters.
It is important to have digital agency components to get quantifiable results. Polansky noted that most of the agents that EZLynx sees have an average retention rate of 74.3%. “Everyone you speak to says their retention rate is 95%. That just means they don’t know, and they pick a number that they think is reasonable.” Polansky is referring to actual policies in force (PIF) retention.
The agencies that embrace some digital components, such as predictive analytics or a pipeline management tool, begin to outperform their peers – 85.1% with proactive retention and 88.4% with a pipeline management tool. The key is that the results are measurable. Look at PIF retention today and then after a program is implemented, three, six and nine months later to see if they are headed in the right direction. If they are moving in the right direction, then they have a positive return on their investment; if they are not, then they will need to make changes.
Another area to review is policies per customer. Some large direct writers are selling between there and five insurance policies per customer, while independent agents sell an average of 1.6 policies per customer. That points to a tremendous amount of opportunity within agents’ own books to sell additional lines of business. Agencies that are proactive in retention have an average of 1.8 policies per customer, according to Polansky. Those that are using proactive marketing campaigns are even further improving their policies per customer (1.8). Agents who speed up the process of having a conversation about new business, whether it is commercial lines or personal lines prefills, are doing even better at 2.18 policies per customer.
“The more policies an insured has, the longer the retention will be. If you can get them up to four of five policies, they are never going to leave because it’s just too hard,” said Polansky.
Read the full article, published October 4, 2019 in The Standard. Reprinted with permission from The Standard, Copyright 2019, Standard Publishing Corporation, Boston, MA. All rights reserved.