Another hard market cycle is upon us. These changing market conditions have made insurers operate on a reduced capacity and customers deal with significant premium hikes. Even though the pains of a hard market cycle are felt across the industry, it can pressure on retention, prompting even long-term customers to shop around with the intention to switch insurance providers.
The role of the broker
That’s why it’s more important than ever to use the current period as an opportunity to double down on service. With customer retention never being more important, brokers could benefit from using a customer-centric approach, talking with their insurer partners and fostering closer relationships across the board.
Another key way to retain customers, especially in a hard market, is through loyalty programs. And for a good reason too: LoyaltyOne’s recent research study, the Loyalty Big Picture report (loyalty.com/loyalty-big-picture), found the following:
- 95% of companies reported that their loyalty program members spend more than their non-members annually and 60% of companies reported that loyalty customers spend two to three times more than non-members
- 57% of loyalty members stated that the loyalty program impacts how often they shop with the brand, 54% stated that the loyalty program impacts how much they spend with the brand
- 58% stated that the loyalty program impacts their decision to spend with one brand over another
The value of loyalty
One example of a loyalty program is the one offered by RSA and the AIR MILES® Reward Program. In a nutshell, customers can earn Miles when paying their monthly premiums.
“The idea behind loyalty marketing is to connect shoppers with what they need,” says Jennifer McQuaig, General Manager at AIR MILES®. By combining shopping behaviour, in this case, home, auto and small commercial insurance policies, with insights on shoppers’ individual preferences, customers benefit while doing what they would do normally: in this case, making their monthly insurance payments.”
The program has been made available since 2007 and has resulted in many customers choosing to remain with RSA when renewing their insurance policy.
“We’re working hard with our broker partners to encourage and make it easy for their customers to take advantage of the loyalty program partnership,” says Julia Carr, Vice President of Marketing at RSA. “We know that when customers earn AIR MILES® Reward Miles with us, they are more loyal and have better retention with RSA and their broker. More than that, brokers can also benefit through the association with a global brand like AIR MILES® and the credibility it brings to the table. It’s a win-win for everyone.”
In fact, 89% of Canadians participate in at least one loyalty program and AIR MILES® is one of the most recognized, being used by 11 million Canadian households. To learn more about how you can retain your customers via the Program, visit rsabroker.ca/air-miles-rewards
This article originally appeared in Canadian Underwriter magazine.