Renewal Isn’t Retention (Wait, What?)

Just because a policy renewed doesn’t mean your client is loyal. Shane and Tonya discuss the surprising difference between renewals and retention, explore why insurance agents often confuse the two, and why that mindset is costing them long-term business. You’ll hear practical ideas for building stickiness, touchpoints that matter, and how communication style can make or break your retention strategy.  

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Transcript

Announcer: [00:00:00] This is IA Forward your Playbook for Success as an independent insurance agent. Here to help you knock it outta the ballpark are your host, Shane Tatum and Tonya Lied.  

Tonya: Welcome to IA Forward, Shane, over the weekend I was thinking about something that may sound a little weird to our agents, but just go with me on this. 

There is a difference between retention and renewals if you think about it. Renewal is very transactional. It can happen whether or not you ever reach out, have a conversation with the client. Email the client. Renewals can happen. Retention is all about building a relationship and building stickiness with a client. 

Renewals will happen if the price is right, but long-term retention is something totally different.  

Shane: So I'm gonna pull Aton on Tonya and find some definitions here. And she's right. I don't like saying that all the time, but in this [00:01:00] case she's right. But US insurance folks. Are going to struggle with this idea. 

The retention definition is the continued possession, use or control of something, and then the renewal definition is an instance of resuming an activity or state after an interruption. That's actually two different definitions. Pretty different in terms of what those words mean. To the insurance brain is ingrained in us, especially property and casualty. 

Maybe not life insurance guys, but the property and casualty guys. Renewal is equal to residual income. We equate the fact that we get paid on renewals. It's a financial thing to us. It's an activity to us. There's a lot of. Angles we could go here, but I'm gonna go with Tonya on this and say that I agree with this idea that retention is definitely completely different [00:02:00] than renewal. 

I.  

Tonya: Because here's the thing, just because of policy renews, it does not mean that client is in any way loyal to you. It just meant the price was right.  

Shane: No, that's right. And subscription business has maybe in a way hurt the insurance industry a little bit. I think about the subscription model or the software as a service, the SaaS model. 

There's just so many different little elements. Netflix, the Amazon concept of things. Was there a subscription model before Netflix on a wide ranging basis?  

Tonya: I can't really think of anything. For the masses, the Netflix. CD program where you paid a certain amount of money a month and they sent you two or three CDs to watch until you sent them back. 

You may, and people listening to this podcast may not remember. That's how Netflix started. You got these DVDs in the mail with these little red envelopes. [00:03:00] Then when you were finished watching the movie, you sent it back to them.  

Shane: Now there's a subscription to monitor your subscriptions. That's where we are in society today. 

Tonya: What is your weirdest subscription that you have?  

Shane: Oh, weirdest is brand new that I'm going to cancel after one month. It's some type of variation of Photoshop. My wife and I want to remove the railings from our front porch, and I'm sure we could get this done with someone locally that does house plans for a couple hundred bucks or whatever, but I needed a way to remove that railing, and I'm terrible at Photoshop, but I've been on my phone. 

Most of the last weekend, new Photoshop app trying to remove this railing so we can get a picture of what our house would look like without the railing. She has this idea that it's gonna look better, but then we have these side porches that are not under [00:04:00] roof. It's weird that without the railing, we're worried about it. 

For me, it's my weirdest subscription because I have zero use for Photoshop in my life, like zero use. I probably should be smart. Marty, as I'm thinking about this right now, thinking we have a marketing department and a marketing intern that probably would be able to do this in 30 seconds.  

Tonya: That's what I was thinking. 

Why did you not just send this to me? It would've taken less than a minute. I,  

Shane: I spent hours on this. Over the past weekend trying to figure out how to get this done. It's a weird one for me because it's like some variation of Photoshop, which is probably why it's not working.  

Tonya: I have one through Amazon for a dollar and 12 cents that gives me the sleep sounds that I like to sleep to that are uninterrupted. 

Shane: So here's the difference between Shane and Tonya. If y'all didn't know there were differences, I have the Free Box fan app. That [00:05:00] is just noise making and it's free. And Tonya's paying for noise making to sleep by, which is probably more tranquil. That does not shock me, by the way. It may be weird for most people,  

Tonya: but a subscription for a dollar and 12 cents a month. 

To me, that was the crazy part about it. I guess if Amazon has hundreds of thousands of people using it, but. It's a dollar and 12 cents. And so that made it really easy for me because before I paid a dollar and 12 cents a month, it would give me an ad before I would go to sleep. And once you give me an ad, then my brain starts to work because I'm a marketing person. 

So it was worth it for me to not have to deal with the ads.  

Shane: That makes sense. It's functional, right? I do have a 99 cent apple storage extended thing that's on my phone. It's 99 cents. I don't know why they don't charge more than 99 cents. Hopefully they're not listening. They're not gonna go up. But obviously people will [00:06:00] pay. 

There's a whole thing about what people will pay, like the elasticity of what we will pay for versus what we will not pay for, which maybe we can circle back around to why retention is different than renewal.  

Tonya: So let's talk about why clients leave. The automatic response is somebody else got them a better price. 

We know that's what people are thinking. It's not always that it's a poor claims experience, no perceived difference in you and someone else, and ultimately to me it's impersonal. It's a lack of communication.  

Shane: I've said many times on our podcast about the contractor world, if you just call people back and do average work. 

As a contractor, you can be successful just communicating, returning people's phone calls if they call you and ask you to call them, that doesn't mean text them or email them. That means call them. This is a little difficult from a [00:07:00] generational standpoint. Picking on our Gen Zs, maybe creeping into our millennials a little bit. 

When you have someone that says, Hey, give me a call. They're not saying, give me a text or send me an email, unless they actually say, send me a text. This is something that is a challenge going forward, training the next generation, because I'm experiencing it personally. Agents in our partner network have experienced it and it's a little bit frustrating. 

The assumption is that a text equals a voice. Phone call, and it's not the same thing. It doesn't show personalization. It doesn't show the care that retention requires. The relationship is really what we're talking about, the retention of the relationship. I really believe that most of the world's problems I. 

Can be solved with better communication.  

Tonya: I agree with that 100%. Those [00:08:00] conversations are what make you different. Those conversations are what are going to make this client be sticky. It is going to create that relationship. That you really want, that creates true retention.  

Shane: So I've been testing this a little bit, and most of my phone conversations are with agents. 

Let me just set the foundation to this. They're not with insureds, and I understand that there can be a difference in B2B versus a B2C concept, but. I really believe that to continue to pick on our Gen Z millennial crowd, the problem with just picking up the phone and having a conversation centers around, I don't have time. 

I don't have time for that, so why don't we have time for that? It's centered around the assumed required small talk. How are you, how are the kids? How are, whatever we get. Into this. [00:09:00] I don't have 15 minutes to make this two minute phone call. So I've been testing this a little bit, and this is difficult for me because I'm gonna take more of that personal nature. 

I'm gonna, I'm gonna throw in there the, how are you, how's it been going? Especially someone I haven't talked to in a while. And one of the things I'm trying to do is. Professionally and personally in a caring way, eliminate that small talk. I don't know if it's possible, but I'm trying to see how that goes. 

Now, if the person on the other end is wanting the small talk and is doing that intro stuff, then okay, fine. But if they don't, I'm trying not to be the one that initiates it or causes it, because I feel like. That's what happens. At least for me, I'm the one that actually initiates it, and they feel like they've gotta reciprocate and it turns into this longer phone call like, okay, wait a minute. 

What are we doing? Everybody's [00:10:00] busy. That's not the point of the call. I don't want it to sound like I don't have time for them, because that's the other end of the spectrum that can run off a client. This is the only thing that needs to be going on in your life. In that very moment, making people feel like you have time for them. 

And so finding the balance between this is very difficult. I'm gonna give our generational folks a bit of a pass here. This is not easy. Gen Zs, millennials, it's not easy. I understand you and I understand why you struggle with picking up the phone and calling people because the text, the email. Can be done in a one to many type of environment versus the singular one-to-one phone conversation. 

Tonya: If we get rid of small talk, are we really building relationships though? Do we know their pets? Do we know their children's names? Do we know their hobbies? [00:11:00] Are we building a relationship just by making a flat phone call? Do we know their sports teams? Do we know the things they care about? In order to really figure out what kind of coverage they need,  

Shane: maybe not. 

It's a slippery slope or a fine line. I really think this is one of those things that gets our solopreneurs really caught in a bad spot because you do have less time now if you have. Some support staff. You have people you can spend all day talking to. Your jaw hurts and you're great at it, and you're not necessarily doing quotes or the busy work required in the solopreneur environment, at least in the beginning. 

Then maybe. Maybe that's the reality. You can still be personable and understand your client by listening as long as you are not the one causing the lengthy phone call. Shane Tatum, I am self-serving enough [00:12:00] to know that I can be the one causing the long phone call, right? So if that's you and you're protecting you from yourself, fair enough, listening to someone or simply saying if it's someone that you really do have this really strong relationship with, like. 

How's the kids? How was the ball game? How's the season? You don't have to ask very much to get 10 minutes of just stuff. People love to talk about their kids, their hobbies, the things that they're passionate about. They love to talk about that. Our agents are busy. Our people are busy, and that's the holdup, right? 

That's the thing that makes them go to the text or email. And I want you to be able to meet that customer where they want to be met. That's also something that's really important. Are you tracking communication preferences? If this person says phone call or if this person says, Hey, give me a call. Take your cue from that. 

That's the main point. Hey, gimme a call or shoot me [00:13:00] a text. You have permission, right? You have permission right there. Hey, give me a call or send me an email or. Shoot me an email or a text. That means don't call them. That's what that means, right? If someone says, shoot me a text or send me an email, I can't pick up the phone as much as I wanted. 

I can't pick up the phone and call them because that's not what they're asking for. Meeting that customer where they are. It gives us the best retention possibility because we're responding to them in the way that they want to be responded to.  

Tonya: Absolutely. 100%. What touch points besides renewal month do you think our A need to be reaching out to clients, and it can be through automation. 

Not saying it has to be done personally for each individual client. What touch points beyond right before renewal do we need to be doing to create stickiness?  

Shane: As silly as it is, for whatever reason, [00:14:00] society loves birthday notices, birthday automations,  

Tonya: just to let you know, I do not like that. It drives me nuts. 

I really detest that because everybody does it. But anyway,  

Shane: I'm in the severe minority because the majority, there's plenty of data on it and plenty of information on it. Now how you do your birthday automation, that's where you can be unique and get outta the box and think about it. The main thing here is not to be overkill. 

The only time your customer hears from you does not need to be at renewal. So if that's a six month auto policy, it doesn't need to be twice a year if it's an annual. Auto home package. It doesn't need to be once a year. I like probably three to four, let's call it quarterly touch points. I love that. I really struggle with this area because I just don't think people care that much about the seasonal reminders that it's hurricane season and that it's it's winter. 

Check those pipes. Maybe they do. I am the insurance guy. [00:15:00] I just see a lot of agents. Go down this path where they're all saying the same thing. Maybe because the carriers are all saying the same thing and they're borrowing from the carrier's templates. That's where I'm at, but I'm a little bit of a against the grain kind of thinker, and I'm always gonna go to little bit unique. 

Something is better than nothing. Doing nothing is worse than doing the stereotypical stuff.  

Tonya: Going back to birthdays, we have an agent that does something unique. He sends a notice a day before their anniversary and a day before their spouse's birthdays that says, just a reminder, your anniversary's tomorrow if you haven't gotten them a gift or if you haven't thought of something special. 

Here's your reminder to do that, and to me, that's fun. That is something that is relationship building. It's funny, it's unique. [00:16:00] It's not sending a birthday card on the birthday because I probably get 150 birthday emails, but if I got an email the day before, it says, Hey, just a reminder, Daniel's birthday is tomorrow. 

That would stand out to me.  

Shane: Keep your clients out of trouble, type. Notifications. That's great. There are ways to get out of the box a little bit. There are ways to uniquely establish yourself within your client's brain and within this sort of boring world of insurance, at least from the consumer's view of things. 

That's important. I do know that we are talking specifically about communication here. There are older tried and true things. This is harder today because nobody has a home phone anymore, a during the day call out. We used to do this old thing and I'm not really sure if it would work today, but I loved it. 

It was a, during the day call out, our retention specialist, our account managers would break it up and [00:17:00] they would call like three, four, five, whatever it was. They would call the client during the day and just thank them for their business. Just a random thank you. Back in the day when we all had home phones, you could do that and guarantee yourself. 

Most of the time that you were gonna get voicemail, so you're not gonna get stuck on the phone, you're not gonna clog up your day, but you're gonna do this little call out and get voicemail now. People are busy and the only downside is if they recognize the number or have you in their phone, they might pick up. 

And the point of this to me was to get the voicemail right. I wanted them to get that voicemail and just hear me. Thanking them for their business. I'd love to have someone try that and pick that back up and see if it works. In the world of nobody has a home phone, but everybody has their cell phone as their only phone, and see how this works in a 2025 world. 

Tonya: Those touch points are [00:18:00] so important right now because there are huge increases, especially in Texas, Florida, California. The, a lot of the world that we live in, I have not heard from my insurance agent since we bought our house, except when we found out how much our insurance was going up this year, which was drastic. 

And I know you're gonna tell me that I choose to live on the Gulf Coast, and I should expect that I see this smirk on your face, but. That's the only time I've ever heard from them. I cannot tell you my insurance agent's name without looking it up, and I don't have Integra insurance because they won't write my insurance in Florida. 

I just wanna make that very clear. So that being said, I have no loyalty to my insurance agent, except that I don't wanna go through everything to switch insurance in Florida. We just don't have a lot of options. If I was in a normal state, if my insurance renewal had come in and had [00:19:00] gone up this much or even half this much, when I can't even tell you my insurance agent's name, I would've been on the phone. 

Shane: Maybe if you would find us some Integra partners in Florida, we can help you out there.  

Tonya: We can have Integra partners in Florida.  

Shane: We're gonna have to figure it out one day. That being said, I wonder sometimes not to give your agent. A pass here, but is there anything they can do? Have they reached the point where they're like, you know what? 

We're not calling people anymore. We're not notifying people anymore. We're just gonna take the retention rate on our chin. This is gonna sound crazy, but. It has come up in my brain, especially over the last few years, as difficult as it's been, are we spending so much energy to try to retain people that at the end of the day, the rate factors are so drastic that our effort is just. 

Almost not realistic. Like we're gonna spend a bunch of energy to try to retain people and people are gonna move anyway because the rate's [00:20:00] just that different. If we don't have another option and we're not doing that, let me be clear. We're not doing that. We're not promoting that. We're not saying that you should just be whatever carrier reps don't freak out. 

That's not what I'm saying. What I have come to the conclusion of though, or at least I've had these thoughts, is because the rate cycle has been so long, has been so drastic, has been so far behind the eight ball here, and we're still going, is it futile? Is it a futile effort? That is the part that. If I'm gonna push our carrier partners across the country to say, look, I get it. 

You've got to get right. You've gotta do some things. But you've also gotta get stable. You've gotta find a way to solve these catastrophe problems, to solve some of this stuff. We are smart people in our industry, and we can solve this problem. Agents are so [00:21:00] exhausted. Your frontline agents, your independent agents are so exhausted that my fear is this is where we're going. 

We're going with, you know what? I'm just gonna write as much new business as I can. I'm gonna let my renewals do whatever they can do. My retention's gonna be what it's gonna be. At some point you're going to see this start to happen because they can't do anything about it. We're not there as an organization. 

We're not doing it that way. But I have to admit, it's crossed my mind. We spend a lot of energy on retention, a lot of touch points, and a lot of relationship building only to lose that client on the rate increase where we have no other options for them, we can't help it. Then the captive or that decides to enter the buy market share last quarter type strategy comes in and is able to undercut the rate. 

Part of what I wonder with Tonya's agent [00:22:00] is have they just said. Forget it. I can't do anything about it. I'll just write to every one I lose and stay above the fray. Or are they just a bad agent?  

Tonya: But we have two cars in a boat and they have never once asked to give me a quote on two cars in a boat living on the Gulf Coast, most people have boats, right? 

Most people have cars. Public transportation is not. A thing here, and that's what where this idea of retention versus renewal happens. Because if it's just about renewal, then you're gonna stay a part-time agent. If you're trying to build retention, you're gonna have the opportunity to be a full-time agent. 

When clients stay with you, it becomes more than just about price.  

Shane: You're preaching to the choir and speaking my language here, I 100% agree with that. I happen to know enough about your agent and your situation to know that there are a lot of agents in this boat [00:23:00] today. The tail is wagging the dog because I know that they do a lot of mortgage referrals. 

They spend so much energy. This type of agent profile on their referral sources, their lead sources, and the mortgage referral lead sources are some of the worst. Because they'll stab you in the back. As soon as they start their own insurance operation. They'll leave that relationship in some cases. I want you to balance this reality of your referral relationships with your client relationships. 

I love agents who hold the mortgage company relationships accountable. I love agents that don't go so far to the lead source relationship that they forget about their clients. That's where you are. I know. Your agent type is not thinking about how much more share of your wallet they can get full-time client, which is what they should be doing by the way. 

They're worried about the next referral [00:24:00] lead coming from their sources. It's just a churn. I'm not a fan. I don't think it's the independent agency model. I know there are agents, especially in the captive side, exclusive side of things. They're churn oriented based on their referral sources. All they do every day is satisfy those referral sources and help those people sell homes, finance homes. 

That's not the way I process running an agency. It's never going to be something that I advocate. But that is also out there, and we see things as independent agencies where we're like, man, I'm trying to be a full-time agent. I'm trying to get three, four policies. Per client. I'm trying to really push the envelope of that policy per client ratio. 

And then you look across social media and you see how this agent wrote 250,000 in premium last month. They may not be telling the truth and what they're not also doing. Is telling you what their [00:25:00] retention ratio is and how much of that business is actually sticking. They wrote two 50 and 200 went out the back door, and one of the things I wanna do is I wanna know what is your net? 

What is your net new sales? I don't really care what your gross new sales are, but I wanna know what your net new sales, what did you write new? Versus what did you retain? And that is where true growth comes from. Retention is what fuels growth, not new sales. You're going to sell enough new business with enough client referrals. 

I. To grow your business if your retention is where it needs to be.  

Tonya: Building these long-term relationships is not about being flashy, it's about being intentional. One of the greatest opportunities we have to build these kind of relationships. Is when a claim happens, your clients are stressed. I know [00:26:00] that our carrier partner want us to turn it over to them, let them handle everything, but those check-ins after claims make all the difference in the world in saving a client. 

Shane: This is an area that we. Don't spend enough time on, especially in personal lines, claims, advocacy, and yes, you're right. Carriers have removed the agent from this cycle. They want direct reporting. Put an asterisk by that for a second. I'll come back to that. But they want direct reporting 'cause they want the interview. 

They don't want to chase the client. Let's understand what the purpose of this is. They wanna capture that loss report and be done with the loss report. What they don't want is this back and forth chasing clients are busy. The client calls their agent. The agent reports the claim. Now the claims adjuster. 

Is having to get back in touch with the client and the client doesn't recognize the phone number. There's all kinds of inefficiencies that [00:27:00] carrier claims departments are trying to overcome, so let's just understand that and why it's important for us to get that client to talk directly to that claims adjuster. 

That said, back to the asterisk for a second, more carriers. Especially on the marketing side are pushing agents to say, look, have that conversation with your client because. When that client calls in for a claims consultation, should I report this claim? Should I do this? This is where we're seeing a really big uptick in zero paid claims. 

We're seeing ignorance at the client end about whether they should file a claim or not based on their deductible, is it gonna be above the deductible? Is it gonna be zero paid? Is it covered? All kinds of questions go into this. Claims consultation. What we're told is due to bad faith elements today, carriers getting sued or [00:28:00] carriers getting called out by the DOI on bad faith elements. 

If that client calls that insurance company directly and reports a claim or has a consultation, they're going to file the claim even if it's a zero pay now, a year later, two years later. Prices going up, rate increases, especially during the cycle that we continue to be in. And now you're trying to remarket your client who now has two zero paid claims on their record and they're getting dinged. 

Your best company's not willing to ride it. This is a reality that things are pulling the agent back in. We should take advantage of that. I do believe this is an area that. To Tonya's point, if it is a legit claim, it is a claim that's getting filed. Having just a little automation or a call out, follow up. 

Maybe it's one of those that hits voicemail. Hey. Just checking on you, making sure things are good, [00:29:00] you know that 32nd call out can retain your client. For you.  

Tonya: Think about over the last three months, or maybe you look ahead and do this for the next 30 days, how many non-transactional client touch points can you remember having? 

Shane: That's a really good question. Some other scenario. Something that you are the client on. That's Tonya's point here. Put yourself in that client's shoes and think about did you make an impact? Were you impacted by something that you could borrow from another industry? Another interaction. I do that a lot. 

My favorite's, the hospitality industry. Maybe that's because I lean to more of that full-time client. It's easier to keep a client than it is to write a new client. Yes, we're a sales organization and we need to be selling. We're always selling, but we're selling through service. We're selling through retention. 

I just love the hospitality industry and most of the time I do not have an experience that's super transactional. If you really [00:30:00] wanna learn from some folks just. Spend a little money and go stay at the Four Seasons for a weekend and call it training and development. You will learn a lot going and staying at the Ritz Carlton, the Four Seasons. 

If you want to understand what client retention servicing really looks like, then go spend the money and have a great weekend. It'll be some of the best investment in research in. Continuing Ed, so to speak, that you've ever spent,  

Tonya: I haven't been to the Waldorf in New Orleans in a while, so could I use my Integra credit card and use this as continuing education? 

Shane: That statement was more meant for our, our agency partners out there, not necessarily our Integra folks, although we should probably do some things like this at the leadership level for sure.  

Tonya: You can't fault a girl for trying, right? I'm gonna leave us today with this quote from John Wooten. It's the little details that are [00:31:00] vital. 

Little things make big things happen.  

Shane: Attitude's a choice. Make a great one.  

Tonya: Bye y'all.  

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