Your primary goal as an insurance agent is to make sales, and of course, you want to avoid cancellations whenever possible. Remember that even if a client wants to cancel their insurance policy, it is not set in stone. You still have the chance to win them back and convince them to stay.

However, you need to have strategies to stop a cancellation. Without a process or strategy, you will have no way to stop clients from leaving and reducing your income. Incorporate the following into your processes, and you should be on your way to reducing cancellations.

Have the Right Person to Handle Cancellations

One of the most important things to do is recognizing who on your team has the skills necessary to stop a cancellation. Some people will naturally be better at this than others, and there is nothing wrong with that. A successful insurance agency will have staff that excels in varying roles; one person may excel at sales while another does great at preventing cancellations. Each of them serves a crucial role in your agency (but don’t miss an opportunity to cross-train!).

But who is the right person to handle cancellations? They should have great problem-solving skills and are empathetic. They can talk to clients over the phone or in person. They can listen and make the client feel heard while providing education and outlining how your agency will address their concerns.

Create the Right Scripts

In addition to having the right person handle cancelations, ensure that they have the right insurance agency scripts to help them succeed. The scripts should ask why the customer is leaving. They should also highlight some of your agency’s stand-out features or services in a way that seems to help the client. For example, try saying something like, “Not all clients realize we partner with several carriers.” From there, you could highlight how switching to a different carrier but staying with your agency would still deliver savings or features without the hassle of working with a new agent.

Have Confidence in Your Ability to Stop the Cancellation

A big part of your ability to handle cancellations is believing that you can stop them from going through with the cancellation. Some insurance agencies mistakenly believe that once a client decides to cancel, there is nothing you can do to stop it. This belief is usually stronger in the case of clients who have already made steps toward cancellation.

Once you believe that you can stop cancellations, you will be able to focus on the strategies and processes to do so. You will then brainstorm ways to get the client interested in your offerings and prevent them from canceling.

Understand Why They Want to Cancel

One of the most important steps to stop a cancellation is understanding why the client wants to cancel in the first place. This will not only help you keep this particular client, but it will also prevent other clients from considering cancellation in the future. After all, if one client had an issue or concern, it is likely that others will as well. Some common reasons are prices, poor customer service, no established relationship, and life changes.

You need to go a step further than just understanding why someone wants to cancel. You also need to be sure to document it. This will help you gain metrics and compare various reasons over time. This documentation will also help you stay focused and remember what the reason was.

As you record the reasons for the cancellations, stick to facts. You also need to make sure to survey the clients you lose. If a client calls to cancel, you will have the chance to talk to them over the phone. But you may still want to send a follow-up survey to see if they have anything else to add.

Get Creative to Address the Concern

If necessary, get creative to address the reason that the client wants to leave. For example, if they had found a better price, see what you can do to match or beat the price.

Or, if they have a change in location or assets and need different coverages, highlight the other insurance policies you offer that may fit their needs. If the reason is a bad experience on the service side of things, you can let them know that you will work on training, but you also need to accept that sometimes this won’t be enough. If they still cancel, don’t worry, as you can always retarget them later.

Remember to Remarket

Even if someone does cancel, that doesn’t mean that they are gone forever. You will need to address why they canceled, but once you do, you can try to win them back. For the best results, create remarketing guidelines that include turnaround times. This will help you win back lost customers without annoying them with your persistence.

You also want to make sure that you have all of their contact information up-to-date. After all, you can’t remarket to a lost client if you can’t contact them. If the client calls to cancel, you can get updated information by asking what number to call them if you get disconnected.

It’s no secret that the insurance industry is a highly competitive space to be in. Perhaps the most popular way that insurance agencies secure business is by trying to keeping prices low. Especially when it comes to mandated automobile and homeowner’s policies, people want to spend as little as possible without compromising on quality. This is why so many agencies focus on making sales based on price.

While that might seem like a good business-building strategy, it’s riddled with problems. Yes, the price that consumers pay for insurance is important.  However, there are other things considered even more critical—not just for agencies but also for their clients.

Creating Long-term Trusted Relationships

Consider this scenario. An individual receives a marketing email from an agency that offers cheap automobile coverage. Whether on a relatively tight budget or perhaps uninformed, they decide to buy a policy.

At first, everything seems fine. However, the policyholder then gets into a car accident. What should’ve been a straightforward claims process turns into a nightmare. Ultimately, it takes a long time for that person to get the money owed, and even then, it isn’t the amount they anticipated because their “cheap” policy left them drastically underinsured.

Here’s another scenario. Someone opts for a cheap homeowner’s insurance policy in response to an agency’s advertisement. It meets the lender’s criteria but just barely. Even though the coverage isn’t great, the low price proves too enticing to ignore.

Then, pipes in their home freeze and burst. Although the cheap policy covers most of the damage, the policyholder can’t reach their agent, or any other agent for that matter. That person has to wait several days to get any resolution, and the quality of customer support is just as bad as they’d heard about.

These aren’t far-fetched stories but real situations that people experience. Sure, these people saved money, but only in the short term. These individuals would’ve gladly paid a little more to have confidence in their agency and agent.

Tips for Building Trusted Client Relationships

Remember, as part of the everyday service your insurance agency provides, you want your agents to continually look for ways to provide clients with excellent yet cost-effective coverage. That ensures the policyholders always have the right protection but at the lowest price available. So, while you can certainly grow your agency by letting consumers know you offer affordable solutions, don’t make this the primary focus.

An excellent way to stay on top of pricing while building a trusted relationship with your clients is to implement an excellent insurance agency management system. For one thing, you can customize it based on the policies you sell and your company’s overall objectives.

Beyond relying on a robust insurance agency management system, here are some ways to build trusting relationships that last.

• Become an Expert – The more you and your agents know about the insurance industry and the products sold, the more prospects and existing clients will consider your agency “the expert.” By nature, people prefer to get information or make purchases from an organization they believe is on top of its game. This mentality certainly applies to the insurance industry.
• Stop Overselling – You don’t want people to compare your agency with an unsavory auto repair shop that constantly tries to get customers to buy things for their cars they don’t need. Well, if your agents oversell, that could happen. Remember, consumers are smart. So, once they feel an agent is just trying to make more money by selling unnecessary coverage instead of focusing on their best interests, they’ll go elsewhere for insurance. Instead, focus on advising your clients and let them make the ultimate decision.
• Respect the Industry – Even as part of a highly competitive industry, you never want to say anything negative about your competition in front of clients. Doing so would likely make them question what you say about them behind their backs. Badmouthing the competition is a poor business practice that destroys client relationships as opposed to building them.
• Promises Made – Another way to build long-lasting and trusted client relationships without putting all your efforts on price is to follow through on promises made. Whether that involves getting them a more affordable policy or better coverage, applying a discount, or something different, make sure you can do exactly what you say. This is another way the right management system can help. It’ll keep everyone in your agency on track so that promises don’t get broken.

The Bottom Line

Yes, providing your clients with affordable coverage is important, but it’s not the most important factor. The goal is to build relationships with the people your agency serves and make sure that they’re properly covered. As a result, you’ll have not only their business but also business that comes from their family members, friends, and other referrals.