The sale of general insurance products forms a pretty important part of an intermediary’s business – well, that’s what nearly 80 percent told us at the end of last year.

General insurance is a huge market, with the majority of UK consumers purchasing at least one general insurance product. The latest facts published by the Association of British Insurers show that of the 26.4 million households in the UK in 2012, 20.1 million had contents insurance, 17 million had buildings insurance and 3.1 million had mortgage protection. UK households spend some £390 million on buildings and contents insurance alone.

Unsurprisingly given these volumes, it is a highly competitive sector. Independent intermediaries have been holding their own commanding a 37 percent share of the personal lines pie in 2013 according to the ABI. However this is a little down on the previous year, with direct providers including price comparison sites increasing their share to 35 percent.

On a positive note, aggregators suffer from an in-built weakness as they encourage volatility. The main reason that customers purchase through them is to get a lower price and they encourage people to switch their policy provider so they have extremely poor retention rates. Intermediaries however enjoy a healthy share of renewals across a range of personal lines insurance products according to Finaccord figures released last year. This makes them an attractive distribution channel for insurers – and intermediaries offer another advantage in that they are more likely to cross-sell and discuss additional products where appropriate with their clients.

I don’t need to tell you that retention is necessary to build and maintain a successful business. Small gains in retention will grow long-term profitability as it costs more to get new customers than keeping current ones. However, with household insurance becoming increasingly commoditised and price comparison sites wielding massive advertising budgets, how can intermediaries ring-fence their clients and protect their GI business?

First and foremost, have a retention strategy and ensure this is embedded throughout the business. This could be as simple as increasing your point of contact with your client. It’s not untypical for insurance companies to only contact the customer at point of sale and, if they don’t make a claim, at renewal. You don’t have to try to match the marketing budget of an aggregator, but simply create relevant and meaningful touch-points along the lifecycle of your client. If you don’t have a strategy to protect your clients, can you be sure your competitors won’t have one to tempt them away?

Secondly, make sure your client database is up to date and complete. A client relationship management system that is fit for purpose is vital to supporting your ongoing client protection strategy. For example, it could highlight those clients who really value personal contact and who are more likely to respond well to a telephone review than an email. Equally you should ensure that if you do send an email to 500 people, you know who read it, you know who clicked through to your website and you know those people who may have downloaded detailed information so you can focus follow up on these key targets.

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