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INTENTIONAL RETENTION

October 2, 2025

 

Planning, measuring, recruiting,

getting organized, communicating

Why be intentional about retention? It starts with caring about clients and results in profitability.

By Cheryl Koch, CPCU, ARM, AAI, ACSR, AFIS, and Mary Belka, CPCU, ARM, ARe, RPLU, CIC


A critical yet often overlooked profitability component deserves a fresh look. Over the past several months, as we have continued to meet and train account managers to perform at extraordinary levels, we are reminded of a bellwether statistic closely linked to agency profitability—retention.

Surprisingly, few agencies regularly measure or track account retention, nor are specific retention strategies implemented to reach and/or maintain optimum retention levels. Some rely on carrier statistics, rather than their own, to try to determine their own retention rate. This can skew results, especially with the unfortunate current level of unnecessary remarketing being done in most agencies. It is critical to create specific retention goals and metrics, using the agency management system to determine accurate, verifiable retention rates.

While there are many factors that affect retention, there are several primary factors that agencies can control, designed to increase retention and therefore profitability. Intentional adoption of this approach can put you on the path to better overall results.

Strategic planning. Retention doesn’t just happen. It must start as a specific, strategic agency goal, along with growth and profitability. From there, sales and operational goals—both departmental and individual—can be created that align with overall agency goals.

Know your numbers—measure often. Start with the baseline retention numbers for each department and drill down to each producer and account manager for good measure. The minimum goal should be 90%. If you think that sounds high, remember that if you lose 10% of your book each year, your total volume is reduced by 50% in only five years.

Producers must write more business just to get back to baseline each year to make up for attrition. Ultimately, remaining in the 94% to 97% range is the goal. If the number is less than 90%, specific incremental goals must be set to raise retention. We have helped agencies recover from retention rates as low as 62%. This can only be done intentionally.

Analyze your current book: Where are your best opportunities to improve retention results? What is the number of policies per relationship? How many are monoline? There is a direct correlation between number of policies per account and retention. An intentional plan should be implemented to identify those accounts at risk of being lost, and a specific plan put into place to retain them. Which accounts are vulnerable to being lost—and why? Which accounts have not had a risk management review or even any meaningful communication about exposures in recent years?

Once you’ve set your metrics, look at the results often—at least monthly. Figure out what is working—or not—and drill down to address any issues right away. Tie compensation to performance; those who do what it takes to improve and maintain high retention levels should be rewarded. Two proven adages: What gets measured gets done and reward the behavior you want.

Recruit the right clients. Developing a target/ideal client profile and focusing on those guidelines plays a big role in the “stickiness” of accounts. Being “all things to all people” is the opposite of being intentional and does nothing to promote retention of your best accounts. Type of business, minimum premium size, loss experience, and payment history are just some of the target client factors to consider. Pre-qualification questions help your producers to focus in on the specific clients you wish to write, and to avoid writing “price-shoppers” and other prospects that do not fit your strategic client profile. This saves significant time, energy, and expense in the long run, and retention is definitely about the long run.

Communicate—The Rule of Six. Remember to intentionally reach out and touch your clients a minimum of six times per year; this is the magic number. It doesn’t count when they call you, and it has to be you intentionally touching them. This can take many forms and adds up quickly—some great retention/service basics are included in this number, for instance:

  • Intentional, anticipatory handling of renewals. Beware of the trap, mistakenly believed to “save time,” of passive renewal processing. Contacting all clients 120 days prior to renewal, including commercial and personal lines, is a must. All upcoming renewals should be reviewed weekly, on a rolling 120 days out basis, with the producer and account manager together. Any notes or decisions can be documented in the management system client file at that time, followed by appropriate contact with the client. It seems counterintuitive, but this process will save you incredible amounts of time—and increase retention.
    Any discussion about expected rate increases—or decreases (a girl can dream)—should take place during this time. Your clients will love knowing that you are looking out for them and identifying any potential challenges in advance. It is a great time to discuss exposures and coverage.
    It is a mistake—and a missed opportunity to touch your clients—to wait until policies download to start the renewal process. Download is simply a way in which information is received, not part of the decision-making process. Also, please don’t set an activity to let you know if/when the premium is increased. This approach only underscores the mistaken belief that insurance is a commodity and only about price. It also creates a lot of activities that rarely get addressed, leading to even more overwhelmed account managers.
  • Risk management review. This is generally a component of the pre-renewal process and, again, needs to be started before renewals are issued. It’s a great time to add coverage; rounding accounts increases retention exponentially as decades of statistics have shown. This may take the form of a formal review of current exposures and coverage, a call followed up by an email, or a pre-renewal email (only for the simplest of renewals).
  • Be the source of truth for your clients. People don’t necessarily hate premium increases; what they hate is being surprised by them and feeling that you failed to alert them about industry trends and issues that could directly affect them and their bottom line. If a renewal increase is a surprise, we haven’t done a good job of touching the client. You can communicate relevant information each time you speak with them, for example, via informative emails and/or newsletters, or through blogs or podcasts. Making certain everyone in your agency understands and can explain current insurance trends and issues are critical to retention.

Get organized in order to meet your clients’ needs. Overwhelmed account managers find it difficult to provide timely responses to customer requests and inquiries. The importance of proper staffing along with training, consistent procedures, and effective desk management, cannot be overstated in helping your account managers to focus on what is most important—client service. All of this is easier said than done, but it is at the core of most of the retention challenges we see today. Agency owners who make the commitment to operate effectively are better able to address the symptoms of slipping retention.

Communicate. Sounds so simple, but effective communication takes planning, execution, and monitoring for results. Start by analyzing the effectiveness of your agency’s communication channels; this can be eye-opening.

  • Give your agency a call or “secret shop” a request via email—be brutal. Can you stand navigating through your agency’s own endless voicemail loop of ads saying how great you are, while making multiple “clicks” to find the right person, only to end up having to leave a voicemail? Yikes! Or are you able to quickly reach a person who is prepared to help? How long does it take to receive an email response to a standard—or critical—request? Try both and record the results.
  • Be a little “retro.” You might consider giving your clients—and your agency—the gift of a real, live, human receptionist who can professionally direct calls, saving everyone a lot of time, especially your clients and account managers! The best-run agencies generally have relatively low service call volume. If you anticipate your clients’ needs, particularly at renewal, and address them, a lot of calls can be eliminated. The point is to make it easy for the “client” humans to communicate and interact with your “agency” humans. Avoid the temptation to jump over dollars to get to pennies; you will differentiate yourself in a good way with this investment.

Summary

Why be intentional about retention? It starts with caring about clients and results in profitability. If an agency has brought remarketing under control, the approximate cost of writing a new account is six to eight times greater than that of retaining an existing client; the numbers rise exponentially when renewal remarketing exceeds 10% of the agency’s book. Handling renewals like new business kills profitability and new business sales and, unfortunately, fails to increase retention.

How do you get clients to stay? The real question is, how should any relationship be nurtured in order to thrive? If you build it, they will not only come—but stay! The essential components of great client relationships are present in all great relationships—nothing new to learn—you just have to be intentional about it.

The authors

Cheryl Koch is the owner of Agency Management Resource Group, a California firm providing training, education and consulting to producers, account managers and owners of independent agencies. She has a BA in Economics from UCLA and an MBA from Sacramento State University. She has also earned several insurance professional designations: CPCU, CIC, ARM, AAI, AAI-M, API, AIS, AAM, AIM, ARP, AINS, ACSR, AFIS, and MLIS.

Mary M. Belka is owner and CEO of Eisenhart Consulting Group, Inc., providing management and operations consulting to the insurance industry. She also is an endorsed agency E&O auditor for Swiss Re/Westport. A graduate of the University of Nebraska, Mary holds the CPCU, ARM, ARe, RPLU, CIC, and CPIW designations.

Tags: account retentioninsurancemanagement
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