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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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