In the highly competitive insurance market, providers must often maintain parity between retaining and attracting customers. Unlike other sectors, insurance policies and processes are complex, and the industry is prone to fraud and identity theft, which makes customers cautious before choosing a provider.

According to Bain & Company research, 50% of customers sought alternatives after one negative experience with an insurance provider. 

Since acquiring new customers costs more than retaining or upselling existing customers, your top priority should be to keep your customers closer, engage with them proactively, and boost customer loyalty. Satisfied customers are 80% more likely to renew their policies than unsatisfied customers.

In this blog post, we will explore the most effective strategies for retaining insurance customers. But before we get to that, let’s get a quick overview of some of the common challenges to customer retention in the insurance industry. 

Challenges of Customer Retention in the Insurance Industry

Customers are constantly on the lookout for a personalized and transparent experience. Any negative experience is a huge deal-breaker for insurance customers. 

For insurance companies, this becomes especially tricky due to several factors that contribute to the difficulty of customer retention, including: 

1. High competition between players

As with any industry, multiple players are vying for customer attention, offering a range of similar products and services. With high-level competition comes an abundance of choices for the customer. 

Aside from traditional insurance companies, new-age insurance-tech companies are intensifying the competition with their own range of innovative insurance solutions.

2. Lack of customer engagement 

Insurance is a low-engagement product that customers invest in to protect their high-value purchases.

Most customer interactions are limited to policy claims and renewals, and it can be challenging to build meaningful connections within the limited time that customer support agents spend with their customers. 

3. Customer trust issues 

The insurance industry is known for cybersecurity threats, data breaches, and complex policy documents. Also, 69% of insurance consumers ran a search before scheduling an appointment, indicating high expectations for transparency.

So, past experiences and a perceived sense of lack of transparency prevent customers from building trust in your brand. 

4. Complex insurance solutions

Insurance products are undoubtedly complex, with terms and conditions that can be difficult for customers to understand, leading to frustration and preventing them from fully appreciating the benefits of the policies.

Top 11 Insurance Customer Retention Strategies 

To retain insurance customers, deploy targeted strategies where customer-facing teams forge connections and build a solid customer base. These include:

1. Build a seamless onboarding experience 

When your policyholders enjoy a smooth and convenient experience with your business, it is likely to lead to repeat purchases and higher customer lifetime value (LTV). 

You can try Plivo CX’s drag and drop workflow builder to create automated customer journey workflows. 

For instance, when a new policyholder connects for policy setup, an automated system can send personalized emails acknowledging inquiry receipt. Also, when the policyholder wants to get in touch with a human agent for complex queries, the system can quickly hand them over to your support reps. 

2. Rely on human-driven support

Customers feel more valued when they get a human agent to guide them through difficult queries. In an Accenture survey, 50% of customers trusted a human agent over live chat. 

When a customer reaches out after a stress-inducing event, such as a loss or accident, show empathy by hearing their concerns. Not only will you help solve your customer’s issue in the short run, but it will also help establish rapport and build a loyal customer base in the long run. 

3. Provide omnichannel service

For modern businesses, it is becoming imperative to meet customers on the platforms they use most. Omnichannel support creates a seamless experience for policyholders, as they can resolve their queries on their preferred channel at any time. 

With Plivo CX’s unified agent desktop, offer your customers the option to approach your support team through multiple channels—email, voice, SMS, WhatsApp, and live chat.

Customer support agents can quickly get complete context on every customer issue without needing to switch channels. This can save your customers from the hassle of re-explaining their issues the next time they reach out with their queries. 

4. Adopt the right customer support tech stack 

You want an advanced customer support tech stack that enables your agents to manage all customer interactions seamlessly. Simultaneously, your policyholders should enjoy a swift and effortless experience. 

For this, your agents should be operating at their most optimum levels to cater to win over your customers. The unified agent desktop can streamline agent workflow by integrating CRM conversations and call handling into one interface. Agents can seamlessly respond to messages, send reminders, and handle calls, ensuring no customer query is missed.

On top of it, Plivo CX can be quickly integrated with a wide range of existing tools, including homegrown systems, ERP, CRM, and helpdesk tools. 

6. Capture customer feedback consistently

Regularly collecting and analyzing feedback helps you understand your customers' preferences and pain points, gain valuable insights about how your products are faring, and determine whether your customer experience has been up to the mark. 

Plivo CX’s metrics and reporting feature comes with live metrics, historical reporting, and agent dashboards to see how your customer service team is performing. 

Use the platform’s CSAT collection solution to ensure timely feedback capture after key customer interactions. This should be an ongoing process for improvement that’ll help you meet customer expectations and win them over. 

In addition, call barge and call reporting features can help coach your agents and improve their performance. 

7. Move from reactive to proactive support

Instead of responding to customer issues when they arise, proactive support anticipates customer needs at the right time. 

This could be regular check-ins where customers review their policies and address their concerns. It could also take the form of educational content and access to a knowledge base that they can use to better understand their policies. 

To supplement these efforts, provide 24/7 AI support with Plivo CX’s OpenAI-powered self-service chatbot, which empowers your customers to get instant answers without relying on human assistance.

8. Look out for early signs of churn 

Watch out for any red flags that point towards potential churn, such as reduced engagement, increased complaints, and late payments. 

Spotting these early signs can help your team carve a plan of action that’ll best work for each customer. Knowing the right time to get into damage control mode can help you prevent unnecessary loss of customers. 

For instance, a decline in customer satisfaction rates can be a clear sign you need to step in and set up follow-up calls to prevent churn. Offering assistance at the right time can make a significant difference between retaining and losing a customer. 

9. Encourage upselling and cross-selling 

Tap into the power of your existing customer base by cross-selling and upselling services/products to them. 

Based on your understanding of customer needs, preferences, and their lifecycle, tailor product recommendations to offer bundled policies and products that complement each other. 

10. Keep an eye on your customer service KPIs

Track customer service KPIs such as average response time, first contact resolution rate, net promoter score, and customer satisfaction score to gauge the effectiveness of your customer’s satisfaction and support team’s performance. 

A close eye on these metrics helps you stay ahead of the curve and course correct where necessary to foster loyalty among policyholders. 

11. Persuade renewals with rewards

Additionally, incentivizing policy renewals with value-added rewards is an effective insurance customer retention strategy. Showing customers appreciation for their loyalty makes them more likely to stay with their current solution than switch to other options. 

For instance, if you’re a vehicle insurance provider, you can offer loyalty points that can be redeemed for car maintenance services. Another way to demonstrate your appreciation is by offering discounts on renewal premiums. 

Provide additional coverage, bundle offers, and exclusive perks like free financial planning sessions. Integrating value-added rewards into the renewal process can effectively strengthen your connection with policyholders. 

Customer Retention in the Insurance Industry: A Strategic Approach to Customer Success

In the fiercely competitive insurance landscape, customer retention strategies can make or break a business. To achieve the best outcomes, these strategies must be well-developed, thorough, and tailored to the specific needs of the insurance industry.

Data-driven strategies powered by modern tools deliver results by understanding customer needs and preferences. With a suitable omnichannel customer service and retention platform like Plivo CX, you can: 

• Build a seamless onboarding experience
• Help agents gain a complete overview of customers’ issues
• Offer omnichannel support on all platforms that customers prefer
• Use cutting-edge OpenAI-powered chatbots to support customer queries 24/7
• Measure and improve the performance of your customer support team with live metrics and historical reporting 

To get started, sign up for your demo now!