Returning Property Insurance Customers left for a Reason. Here’s how to identify and retain those ‘Boomerang’ Customers.

Consumers have high expectations from home insurance products and servicing carriers. When these high expectations are not met, some consumers will change carriers. Consumers who change carriers frequently may return, creating a ‘boomerang’ effect.

Consumers change insurance carriers for a variety of reasons. Most frequently, a consumer has a negative reaction to a large premium change, perhaps from a rate change due to overall loss experience or an endorsement. Or a claims experience that did not meet the customer’s expectations. This is sometimes unavoidable as contractual obligations guide final claims resolution. Corporate operational processing situations can result in a negative customer service experience. Finally, in rare situations, a carrier might non-renew for UW, non-pay, or frequent late pay situations.

Some insurance carriers will make the common mistake of failing to identify a returning consumer during a new business quote. Even more likely, carriers may not take into consideration the returning customer’s reasons for leaving. Carriers that fail to consider these prior reasons will fail to catch these ‘boomerang’ returning customers.

Returning customer experience should be considered and explored

Many consumers have premium level expectations due to their budget or current lifestyle planning. When a premium increase occurs, some consumers will begin shopping to stay within their budget or lifestyle. In some cases, consumers are surprised at a premium change due to recent claims, which would most likely increase risk exposure. For this returning customer segment, carriers should carefully match coverage offerings to the consumer segment preference. Extended coverages, endorsements, or ‘bells and whistles’ may not be the best fit. Explanations of premium changes may need to be more extensive both at the most current on-boarding new business step and at any upcoming premium increases. Understanding the price sensitivity of each consumer segment can help carriers design more compelling return offerings.

Consumers sometimes leave due to a claims experience that did not meet their expectation. Did the claims adjuster contact the consumer in a timely and friendly fashion? Was the claims negotiation contentious? Cross-referencing categorized claims information with any available customer survey information can inform claims processes and potentially improve overall customer satisfaction.

Operational processes can negatively impact customer experience. Is the process to endorse a policy quick and painless? If a carrier updated operational processes during the Covid-19 pandemic, what was the customer feedback on those changes? Are there humane and ethical methods to handle non-pay or late-pay situations that still acknowledge business realities? Reviewing retention and win-back statistics for this returning customer segment can substantially inform operational processes.

Conclusion:

In all these situations, carriers can significantly improve the experience for a returning customer. First, carriers should identify the reason for the return, and if possible the prior departure. Then, carriers can target appropriate strategies based on those reasons. One method to identify returning customers is by using Current Carrier? Property data from LexisNexis? Risk Solutions. Carriers that adopt a strategy for identifying and welcoming back boomerang customers will enhance their customer experience and see improved financial results.