Before getting into the details of how you can thrive despite inflation, make sure you understand why it is such a concern. Overall inflation across all sectors means that the items for which you offer insurance will cost more. With autos and homes having higher prices, the cost of replacing them increases. This leads to a natural increase in the premiums.
Supply chain issues almost always lead to inflation. A trend of rising prices in some sectors has already visible. Autos, for example, have been becoming more expensive in recent years as more technology is incorporated into them.
Another factor of inflation is climate change, especially when it comes to home insurance. Damaging weather is becoming more severe and more frequent. With insurance companies having to pay out claims more often and in greater values, it is natural for them to increase their rates.
Social inflation is also a concern. This refers to the rising costs of claims other than those economic factors. These higher costs come from issues about social responsibility and how those affect insurance companies. This is due to the fact that social responsibility can affect how a claim case is processed.
Listen to Clients with Empathy
If a client contacts you about their inflation or other financial concerns, hear them out. Don’t feel the need to immediately jump in and start offering a million solutions. Instead, wait until they are done explaining their situation and offer solutions with empathy.
Let your client know that you appreciate them reaching out to you. Let the client know that you are there to help and will do your best. However, it’s crucial not to make any promises that may put you in a bind. Once you hear them out and have a sincere conversation, you can proceed to offering solutions. This will likely involve taking a closer look at their rates, policies, and other options.
Look Over Everything in Concerned Clients’ Accounts
When a client reaches out to express concerns about rising prices, start with the basics. First, confirm the basic contact information in the account. Then, take a look at all account details to get an idea of why there was a potential increase. Some aspects to look into include:
- Reaching milestone birthdays
- Changes to payment history
- Claims
- Endorsements
- Discounts falling off
- Changes to driving habits
- Changes to their vehicle
The factors to look at will depend somewhat on the type of insurance in question.
The goal here is to be able to offer your client an explanation about why prices went up. While that may not reassure them completely, it can provide a much-needed explanation. It also gives you a starting point if you look at discounts or reshop.
Check for Potential Discounts for Clients
One of the best ways to show your clients care for their inflation-related concerns is to continue offering them the best possible rates. To do so, look at all of the discounts that they may qualify for. This will assure your clients that you are dedicated to helping them and will encourage them to stay with you.
Reduce Your Risk With Help From Data
In addition to interactions with clients, you also likely want to address some of your own concerns about inflation. One way to overcome these challenges is to use and maximize data. Take advantage of technology in getting data-driven insights. From there, you can better assess risks and figure out how to reduce them.
Embrace Digital Tools
With rising labor and overhead costs, you may want to look for ways to improve the efficiency of your insurance agency, as this will cut costs. Digital tools are excellent tools for doing so. For example, Jenesis insurance agency management system can save you time with the client portal, built-in texting and emailing, and the ACORD forms library. Every minute saved reduces your overhead cost, helping you fight inflation in your own little way.
Show Appreciation for Your Team
Your agency’s employees will also worry about inflation. You may need to consider compensating them more or offering other benefits just to retain them. Reducing employee turnover is crucial for cutting costs because the hiring and training process is expensive. Looking for simple ways to show your employees you care will encourage them to stay with your agency and boost their motivation to deliver great service for your clients. That, in turn, will produce more business more you in the long run.
Conclusion
Inflation is a concern for everyone involved in an insurance agency, for you as the owner, your employees, and your clients. With the right strategies, you can mitigate the impact of inflation and even make your agency thrive.