Amy Price
Amy Price, a Mintel Food & Drink Analyst produces and writes reports, providing insight and analysis on the food and drink market and regularly contributing in the media.

My colleague Gary Wooley has previously written about insurance marketing on this blog, but here I’ll be discussing another important aspect of the insurance industry–retention.

Why is it that insurance marketers continue to focus so much more effort on acquiring new customers than they do on retaining existing policyholders?

Why isn’t retention in the insurance space more important than acquisition?

My experience in the insurance industry – working for four different insurance carriers – and now helping them better identify what their competitors are doing around retention, can confirm the main reasons as:

1) Staffing Demands – although likely economically-driven, organizations have been forced to cut expenses, and headcount leads the list. By reducing headcount, not replacing exiting employees, and freezing new job requisitions, insurance organizations in fact do not have the human resources necessary to complete all of the demands of a full marketing services department.

2) Corporate Plan-Driven — when the fiscal budget calls for growth of “x” % of new policyholders, the focus quickly gravitates to a new-acquisition mode only. Marketing groups are compensated/bonused only when the “budget” is met or exceeded, and rarely does a marketing budget include line items such as: “maintain persistency level of % on life block of business; “” % on health business, etc.

3) Customer Service’s Job — many organizations view things such as answering the phone politely, and successfully settling claims, as the full extent of their role. They are seldom responsible for, and never incented for – maintaining or improving annualized persistency rates.

I would challenge each insurance organization viewing this post to do an honest assessment of your organization. I can furnish a “checklist” to assist you with this very important exercise.

The decades-old adage is perhaps more appropriate today than ever before: ” Your best prospect is your current customer”. Take care of that customer, and they will reward your organization with loyalty, thus long-term retention. And, they will buy more product(s) from partners who demonstrate how much they care about their customers.

More to come in my next blog post on “Effective Cross-Selling and Upgrading.” In the meantime, learn more about Mintel Comperemedia here and other Mintel products and services, contact us here.