Bluefire Insurance

Drivers across the United States are paying more for car insurance this year. On the backend of a major pandemic and during a very difficult job market, drivers are putting more and more pressure on their agents to reduce premiums, lest they take their money to another firm. 

In this auto insurance agent strategies guide, you will learn how to reach out proactively to clients who may be on the fence about jumping to a new insurer. By turning the conversation away from price and rates, you can better channel the tangible benefits grounded in the strong relationship you’ve built with them. 

How Drivers Are Reacting to Economic Stress 

To say that 2023 has been an economic pressure cooker would be putting the problem mildly. According to the Associated Press, drivers have initiated class action lawsuits against major insurance companies on the premise that they “charged excessive insurance premiums during the pandemic.” 

Even worse, these increased premiums have done little to shore up profits at the major insurance companies. A recent study by Fitch from the Insurance Journal found that an analysis of public corporations in the United States revealed that an increase in rates and written premiums did “little to move the need” with respect to the P&L of major insurers. 

So, what you see here is the worst of both worlds: Drivers are dissatisfied due to high premiums and difficult economic stressors like inflation and job loss, while insurers are reticent to reduce rates due to an increase in accidents and uninsured drivers. It’s a vicious cycle that does not have any easy solutions. 

How to Proactively Reach Out to Clients at Renewal Time 

According to J.D. Power, the increased rates and high inflation rate in the Consumer Price Index gravely reduced customer satisfaction with auto insurers in the United States. Awareness of price increases was driven by pay-in-full customers and those who opted to receive a bill via paper snail mail. 

One of the best ways to deal with this problem is to reach out to customers proactively, ideally with a phone call. Agents like yourself should make it clear why rates have risen. This simple act of talking to your valued customers increases their satisfaction with you as their agent. 

When discussing increased premiums with clients, consider citing the following reasons: 

• Increased Repair Costs: This is an industry-wide problem. Parts and supply chain disruptions have caused major problems and price increases in the repair business. Insurers are the largest spenders of repair services, and these increased costs pass straight to them. 
• More Accidents: Riskier driving behavior and higher uninsured rates have caused a spike in losses among major insurers, leading to a need to balance out the increased risk with higher premiums. 
• More Claims: With more accidents comes more claims. Insurance companies make money in two ways, including the net profit or loss from premiums less payouts and the interim short-term investing of those premiums (also known as “float”). More claims and accidents directly hurt both of these profit sources. 

Techniques to Pivot the Conversation Away from Rates and Toward Value 

While you may not have control over the premium, you can help your insurance clients to better understand the value your company can bring to the table with the following types of prospecting tactics: 

Share Stories 

People remember stories better than facts. Auto agents should share anecdotes about clients who opted for a cheaper alternative only to discover they were under-covered when an accident occurred. This is one of the most potent client-management techniques for auto insurance agents. 

Break Down the Benefits 

Automobile insurance isn’t just a product you can buy out of a vending machine. It has specific features that offer different “protection surfaces” for your clients. Here’s an easy way to break down that concept: 

• Comprehensive Coverage: “While you might find a slightly cheaper option, our policy ensures you’re covered not just for X but also for Y and Z.” 
• Customer Service: “We pride ourselves on our 24/7 customer service. If something happens, you won’t be dealing with it alone.” 
• Claims Process: “We have a fast and hassle-free claims process. That means less stress for you during an already stressful time.” 

Discuss Long-Term Value and Peace of Mind 

Emphasize that auto coverage isn’t just a monthly expense but an investment in their safety and financial protection. Ask questions like, “If you were in a severe accident tomorrow, how would you like your insurance to support you?” 

Another trick of the trade might look something like this: “For the cost of a coffee a day, you’re ensuring that you’re comprehensively protected from a multitude of risks.” 

More Resources Agents Should Consider 

When navigating a rocky economy, holding on to your valued clients can seem like an insurmountable task. Here are several additional resources to consider reviewing as you reach out to clients in these difficult times: 

• Industry Publications: Insurance Journal is a great choice, as well as PropertyCasualty360 and the National Association of Insurance Commissioners. State-specific resources are great as well. 
• Sales Tactics Books: “Influencer: The Power to Change Anything” by Kerry Patterson as well as “The Loyalty Effect” by Frederick F. Reichheld. 
• Psychological Insights: “Predictably Irrational” by Dan Ariely. 
• Studies and Reports: J.D. Power’s studies on insurance industry customer satisfaction as well as the major management consulting firm reports such as McKinsey & Company or Boston Consulting Group. 
• Customer Retention: Harvard Business Review articles on customer loyalty and retention. 

Ready to Level Up with an Insurance Partner that Will Help? 

In these tough economic times, Bluefire Insurance offers a solid and durable partnership for agents. To get started, request more information online.