A proven way to boost customer retention – that insurance companies often overlook
It’s often said that the key to every successful relationship is good communication. And that certainly includes relationships between companies and their customers.
At Riverside, we consistently see that customers who receive relevant, informative communication from their insurance company have significantly higher retention rates than customers of the same profile who aren’t contacted in that way.
In fact, the communication programmes we run with insurers typically deliver a reduction in policy lapse rates of between 12% and 30% amongst customers included, compared with those not included:
Reduction in policy lapse rates
|Lapse rates: customers included in communication||6.8%||2.8%||5.2%|
|Lapse rates: customers not included||7.7%||4.0%||7.0%|
|Percentage reduction in lapse rates: (included vs not included)||12%||30%||26%|
What’s more, every programme that we run also includes a personalised sales offer – with converted response rates usually ranging from 10%-30% of all customers included.
All in all, it’s very clear that communicating effectively with customers can significantly boost retention rates and overall profits for insurance companies.
And yet, research shows that insurers are not communicating as fully as they should with their customers.
For example, the EY Global Consumer Insurance Survey (across 24,000 customers in 30 countries) concludes that “consumers want more frequent, meaningful and personalised communications from their insurance providers”.
So why is it that so many insurance companies leave their customers wanting to hear more from them in this way?
There are various reasons – including a mistaken belief that customers don’t particularly want to receive communications and offers from them.
In our view, better customer communication represents a great untapped opportunity for insurers to boost growth and profitability.
With that in mind, we’ve produced a new 8-page guide that discusses this opportunity in more detail – and shows how companies can use effective communication to unlock the great hidden value in their existing customer bases. Please see below.