Increased Profits


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Increase Renewal Retention with Policy Reviews

DBMarketing and The Travelers just published (Feb 2016) a great study on the significant increase in revenues as a result of providing annual policy reviews for Homeowner and Auto policies.

Here is a link to that study…

http://www.dbmarketing.com/articles/Art232.htm

 

Documented Results

Auto insurance renewal retention rates went from 83.73% to 88.88%.

Homeowner insurance renewal retention rates went from 89.51% to 92.82%.

To give you a clear idea of the increase in revenue this created, look at these charts.

 

Increase by Year in Auto Commissions

(based on $100,000 of annual commissions)

Renewal Retention of 83.73% Renewal Retention of 88.88% Increase in Commission
Year 0 $100,000 $100,000
Year 1 $83,730 $88,880 $5,150
Year 2 $70,107 $78,996 $8,889
Year 3 $58,700 $70,212 $11,512
Year 4 $49,150 $62,404 $13,254
Year 5 $41,153 $55,465 $14,312
Year 6 $34,457 $49,297 $14,480
Year 7 $28,851 $43,815 $14,964
Year 8 $24,157 $38,943 $1,786
Year 9 $20,226 $34,612 $14,386
Ten Year Total $510,531 $622,624 $112,093

 

 

 

 

 

 

Increase by Year in Homeowner Commissions

(based on $100,000 of annual commissions)

Renewal Retention of 89.51% Renewal Retention of 92.82% Increase in Commission
Year 0 $100,000 $100,000  
Year 1 $89,510 $92,820 $3,310
Year 2 $80,120   $86,155   $6,035   
Year 3 $71,715  $79,969  $8,254  
Year 4 $64,192  $74,227  $10,035
Year 5 $57,458  $68,898  $11,440
Year 6 $51,431   $63,951     $12,520  
Year 7 $46,036   $59,359  $13,323
Year 8 $41,207   $55,097  $13,890
Year 9 $36,884  $51,141   $14,257  
Ten Year Total $638,553 $731,617 $93,064

 

 

Most MBA schools teach you if a purchase pays for itself in the first twelve months, you should stop thinking about whether or not to buy it. It is a no brainer. Buy it.

Use this example to help you determine if your agency can afford to not have such a powerful source of additional revenue.

 

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