A CAUTIONARY TALE: PREVENTABLE CHURN IN HOMEOWNER’S INSURANCE

How closely do you watch your insurance book of business for churn? Do you know when your policyholders are most likely to switch to a different carrier? What can you do to boost your customer retention rates?

One of the 15 largest homeowner’s insurance carriers decided to answer that question. Over the past decade, this company has grown over 500% and expanded from a regional to a national carrier, which makes for a terrific sales story. But that kind of growth can blind you to churn.

Fully aware that it is much more cost-effective and profitable to retain a customer than it is to acquire a new one, the company undertook a study to determine its retention rates across different population segments. The results were surprising.

Movers represent one of their largest retention risks. In fact, this leading insurer retained only 6% of the customers who moved. Said another way, 94% of the policyholders who moved purchased their next policy from someone else. With no way of knowing when individual policyholders were in the midst of moving, the insurer had no way to re-engage those at-risk customers with a targeted reminder of the value they’ve been getting.

Instead, consumers were being influenced by those who were aware of the pending change—such as their realtors and mortgage lenders—who referred them to get a “quick quote” and bind with a new carrier. And there went that established relationship.

Awareness is the Key to Improving Retention

LEMA is our Life Event Monitoring and Alerts service. It’s a big deal. Why? Because being aware and able to engage with your policyholders during their key “moments that matter”—like moving, or buying a first home, or having a baby—delivers big benefits to them and to you. This first-of-its-kind alerting service connects directly into your marketing and outreach platforms to automate engagement and optimize retention and cross-selling/upselling for insurance agencies and carriers.

The LEMA platform is built for passive monitoring and active alerting to key life events. Through our proprietary connections to quality data sources, we can detect relocation, household, and financial changes across 255 million adults and 130 million households across the U.S. LEMA ingests updates nightly. When one of your policyholders is flagged as exhibiting life-event changes, LEMA sends alerts into your customer relationship management system. That gives you early awareness of who will most likely benefit from a tailored marketing message and engagement.

In general, we see that about 5% of the policyholders/ accountholders in a book of business experience a major life event change every month. Those accounts are 2x – 14x as likely to purchase a new product at this time—whether it’s from you or, as the carrier in our story learned, from another insurer. By targeting these policyholders at their “moments that matter,” you have the opportunity to plug the leaks.

Evaluate your Book of Business for Potential Churn

You can find out how much of your book is in play for cross-sell or churn in a free, no obligation trial which Fenris can do with no integration required. Or, if your developers want to get their hands on the latest in API-delivered insights, you can get credentials for a limited time free trial and run your own analysis. The investment in LEMA pays for itself many times over in retention, cross-sell, and engagement metrics.