How to improve the insurance policy renewal process
Policy renewal is a crucial process in insurance. On average, policyholders renew their policy once a year.
It pays off to invest in customer retention; The average retention rate for the insurance industry in the US is 84 percent, while insurance has higher customer acquisition costs than any other industry.
[.emph]US insurance industry average retention rate[.emph]
So It makes financial sense: keeping an existing customer is much cheaper than going out and trying to find new ones.
There are several key ways to improve the policy renewal process:
1) Automate and digitize manual processes
One of the key ways to improve policy renewal is digitizing and automating manual processes. Review your renewal workflow and find where manual action is still required. Consider digitizing and automating customer data intake, signature collection, policy document generation, and customer communications.
For example, many insurers still require their customer to fill in and submit PDF forms. This is not only time-consuming for the customer, but it's also prone to errors, causing delays in the process that result in additional customer churn.
By changing the way you collect customer data for renewals, you change the whole process from manual to digital. With digital data intake and signature collection, you eliminate the need for manual processing for policy renewals altogether. Customer data is integrated directly with policy document generation via your policy management system, and customer communications can be automated using a Customer Relationship Management (CRM) system.
2) Communicate early and often
Another key to policy renewal is communication. It’s important to communicate with policyholders throughout the year, not just at renewal time. By keeping in touch, you’ll build relationships and trust, making policyholders more likely to renew.
Research by DuckCreek shows that a third of respondents do not receive any communications from their insurer on an annual basis if there is no claim against their policy. Around 14% do not get any renewal reminder from their carrier.
[.figure]14% of customers[.figure]
[.emph]are not getting any renewal reminder from their carrier[.emph]
This is a huge opportunity to boost retention since policyholders who are contacted more frequently are more likely to renew. In fact, policyholders who are contacted four or more times a year are three times as likely to renew as policyholders who are contacted only once a year.
3) Offer self-service policy renewal
Another way to improve policy renewal is by offering self-service options.
Policyholders appreciate the ability to serve themselves. In addition to providing policyholders with a convenient way to renew, self-service also frees up your staff to work on other tasks.
Some self-service options policyholders appreciate include the ability to renew online, view policy details and documents online, and make changes to their policy.
Another way to improve policy renewal is by offering self-service options where customers can renew their policy, update their details, and make changes to policy documents hassle-free.
4) Utilize data and insights to personalize your offers
Insurance retention is all about understanding and predicting customers' behaviors, especially preventing churn for at-risk consumers.
DuckCreek survey shows that policyholders want personalized communications from their insurers, with 60% of respondents having a strong interest in usage-based insurance policies, for example.
Successful retention strategies in insurance demand thoughtfully orchestrated personalized campaigns across channels powered by intelligent consumer insights. For example, such strategies as connecting behavior-based signals to communications and delivering customized offers at the right time with the right message.
But creating highly relevant touchpoints and driving meaningful, measurable connections across the entire consumer journey is easier said than done. That is why it is crucial to digitize the entire workflow, from policy administration to policy servicing, in order to have a clear view of the policyholder's behavior across the entire customer journey.
Only then insurers will be able to utilize data and insights to create personalized retention strategies that work.
The bottom line: Make policy renewal easy and convenient for customers
Policy renewal process doesn’t have to be a pain. There are many ways to make it easier and more convenient for customers. By automating tasks, communicating frequently, offering self-service options, and utilizing data and insights, you can create a policy renewal process that policyholders will find seamless and straightforward. In turn, this will lead to higher policy retention rates and a healthier bottom line for your business.
Tip: Use technology to automate and digitize policy renewals
By making it easy for policyholders to renew their policy online, you'll boost customer retention and reduce operational costs.
But building fully automated renewals journeys can be a challenge for insurers with limited technical resources. That is where no-code platforms come in.
With no-code, you can easily automate and digitize policy renewals without writing a single line of code. What's more, you can get started quickly and see results fast. NJM has built a fully automated, self-service policy renewal process in only 3 month, eliminating manual handling from the equation.
[.emph]If you're looking to improve policy renewals in your insurance business, consider using no-code to automate and digitize the process. It's a fast and easy way to boost customer retention and save on operational costs.[.emph]
Contact us to learn more about how we can help you automate policy renewals by digitizing your data and signature collection process.