How data will improve your renewal strategy

April 7, 2021

While generating new business is important, we often overlook our renewal process. An agency’s retention strategy is, without question, one of the most important areas that impact its financial health, profitability, and future success.

According to several industry surveys, the average retention rate in our industry is at 82% to 83%. This means the average agency has to generate 17% to 18% in new business just to break even. And yes, those are real numbers! This creates a difficult (as well as expensive) challenge for insurance agencies.

We all know it is far cheaper to keep a client than it is to obtain a new one; in fact, it is estimated that acquiring a new client costs an insurance agency eight times more than it does to retain a current client. With that being said, why don’t we invest in a retention strategy?

What all this means is that an agency with a lower retention rate is less profitable than one with a higher retention rate. Just think how much sense this makes—we become more profitable with less effort if we just focus on the clients we have!

Retention is a critical component to your agency’s overall financial health; even more so due to its bottom line and profitability. Here are some ways that data is easily captured inside your agency and can be utilized to build your retention strategy.

Look in the rearview mirror and take responsibility

If you believe, as I do, that the best predictor of the future is the past, then it’s worth it to evaluate, review, and learn from your lost business. By doing this, you can work to reduce the number of at-risk accounts that you have by analyzing your agency’s clean data (i.e., data that has been verified as accurate and complete). By taking an in-depth look at the critical things such as payment behavior (e.g., EFT-pay in full), claims activity, the longevity of a client with your agency, client survey responses, rate changes, and customer interactions with your agency—that you already have within your agency—you can identify warning signs that a client may not be happy. This then gives you the opportunity to address and rectify these issues before you lose the client for good. This keeps your agency proactive instead of reactive.


One of the best ways to increase your agency’s retention is to gain a deeper understanding of your clients. This means having a strong communication strategy—reaching out to clients regularly, listening, and understanding their situation.

In order to put this information to use, you will need to capture key information about their needs, situation, business, life events, etc.—then take that information and place it in your agency management system along with the phone call. By communicating and listening, you will be able to provide content and advice that is timely and relevant to their situation. This will result in your clients valuing your expertise, looking to you for the advice they need, and trusting you as the expert.

The two key takeaways are: first, have a communication strategy for your agency; and second, remember to listen and always document.

Be proactive

Another key factor in improving your retention strategy is anticipation. We must stop being reactive and become proactive. The best way to start doing this is to make sure you have a written out renewal/retention communication strategy that is followed by your team. Waiting for our clients to reach out to us (if you’re lucky enough to have them reach out to you) is not a good proactive strategy and should not be relied upon during the renewal process.

Proactive communication with your clients also can have a positive effect on agency culture, helping us not receive those angry and upset telephone calls that none of us like to get.

Two key takeaways from having a proactive strategy: first, your retention numbers will be six to seven percent higher, and second, your agency culture will improve.

Feedback matters

The best way for agents to find out what their clients think is to ask them. By surveying your clients, you can identify which of your clients are raving fans, along with those who may be at risk of leaving. Data is an agency’s hidden weapon and is what gives you a leg up on your competition.

After everything I’ve discussed, I hope you can now see how incredibly powerful data can be when building your renewal strategy, but remember it only helps if it’s clean data. You don’t have to create a process that is complicated or expensive to put your data to work for you; all you have to do is turn it on and start using it. Your agency can compete against the billion-dollar ads—all you need to do is use your already-existing data.

Christopher Paradiso
Paradiso Financial & Insurance Services | + posts

Christopher Paradiso, CPIA, is owner of Paradiso Financial & Insurance Services in Stafford Springs, Conn., which received the National Association of Professional Insurance Agents 2013 Excellence in Social Media award. He formed Paradiso Presents LLC, to teach agencies how to survive in today’s complex online marketing world. The firm specializes in educating agents, carriers and associations in America on a range of branding, online, social and management strategies. For more information and to learn about upcoming seminars, visit

Related stories…

Share This