Regardless of how insurance carriers reach customers–whether it's as a direct writer or through the independent agent channel–the one thing all insurers have in common is a passion for customer retention.
The reason for its importance can be explained in part by the staggering cost of acquiring new customers. According to software provider SAS, it costs 10 times the amount of money to write new business than to retain customers.
Attention to retention is driven by “the cost to acquire new customers,” says Ellen Carney, a senior analyst with Forrester. “It's the shop-and-switch behavior [of consumers], especially in this economy right now. Everything has become so transparent. There's a huge incentive [for policyholders] to keep checking on their automobile premiums. Now, you are seeing that kind of interest with homeowners' policies, as well.”
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