Clients are generally unhappy with brokers but keep coming back
Published: October 30, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Insurance is usually a thankless business. Customers resent having to pay for insurance, but will take the benefits that insurance providers offer. Brokers typically have little problem keeping customers, with client retention rate for insurance brokers at around 85%. However, how many of their clients actually approve of their broker?
According to Derek Coburn, owner of Cadre and author of Networking is Not Working, brokers are not doing a good job at keeping client happy. However, speaking at the Insurance Brokers Association of Ontario (IBAO) convention in Ottawa, Coburn suggested it is not all the brokers fault.
“I think it’s inertia. Essentially, clients are sort of happy and settled into the relationship but they’re not necessarily jumping up and down screaming to the world about how great their existing broker is,” Coburn said.
Coburn’s assertions are backed up by a recent study conducted within the wealth management industry, which includes insurance brokers. One important statistic showed only 10% of clients were completely happy with their provider.
“The good news for the broker community is that 90% of the marketplace probably does not love their current broker,” Coburn continued. “The bad news for you is that only about 10% are really dissatisfied and looking for a new option. This is where traditional referrals and Google come into play.
“That leaves a middle ground of around 80%, which is a massive potential market. I would like to suggest that your biggest competitor is not an actual broker competitor but rather the indifference of the individuals [in the 80%]. In my opinion, the companies that are going to be the most successful at acquiring this market share over the next few years are the ones who effectively disrupt that indifference.”
Coburn says many clients don’t know that they can improve their service by moving elsewhere or will outright deny they are unhappy. These clients can be hard to win over and it cannot be achieved simply by offering a more affordable product.
“From my experience, the best way to disrupt this indifference almost always has nothing to do with the core service you provide,” Coburn added. “I used to view client service and business development as two separate things. What I have found since then is that [a combination of the two is better] and client appreciation is one of the best ways for you to acquire more clients.”