Optimizing client segmentation in personal lines insurance

At any insurance agency, the top priority is to provide the best possible coverage and service across an entire book of business. It’s in delivering exceptional client experience that agents can retain (and grow) their clients.

However, not all policies — and not all clients — are created equal, and with limited time and resources, even the most productive agents face constraints that make it difficult to deliver contextualized, tailored and high-value experiences to every client at scale.

If a typical agent manages more than 1,000 clients, for example, and they spend between five and 50 minutes providing clear renewal updates to each client, they’d require anywhere from 82 to 800 hours per year to simply speak with their entire book of business. To lend some perspective, 500 hours equates to nearly a quarter of a agent's entire working year.

To do a little napkin math here:

• Let’s assume a broker spends 500 hours per year coordinating on renewal conversations with clients. At $30 per hour, this level of servicing could cost your brokerage upwards of $15,000 per year, per broker.

And this is time and money spent just on renewal outreach.

Personal lines renewals are impeded by costly administrative processes like this. And to make matters worse, agents are often selective with who they choose to engage with due to demanding workloads, meaning many clients simply receive minimal or no proactive communication about their policy renewal whatsoever. 

Our research here at Quandri corroborates this: We found that agents realistically only have time to proactively engage with 20 to 30% of their clients, leaving revenue opportunities on the table across the rest of their book. Sound about right?

Intelligent segmentation changes this. Why? Because it unburdens agents and allows them to take the manual, reactive guesswork out of their policy renewal workflow. Instead, they can rely on data-driven and AI-enabled actionable insights to proactively communicate tailor-made value that builds trust and drives retention during renewals.

An overview of traditional segmentation strategies

The 80/20 rule is a well-established way to segment any book of business. As Lynette Lewis, head of the North America portfolio consulting group at Russell Investments, explains in this article: 

‍“Typically 80% of the revenue in most advisors’ books of business are coming from the top 20% of clients.”

Lewis was speaking about financial advisors, but this rule applies for insurance agents too. And it’s a pragmatic approach — high-net worth clients are a agencies priority when it comes to renewals. So, it stands to reason that only these clients receive a high-touch VIP experience, while lower-value clients receive only the bare minimum. 

This kind of segmentation is critical for agencies. It allows them to recoup any time spent delivering a personalized client experience in the form of renewals, as well as the opportunity to cross-sell and upsell high-net worth accounts around a policy.

However, deciding on which clients get prioritized can be complex, and traditional segmentation strategies are often prone to manual and subjective judgment calls about who is “worth” the effort. In some instances, agents prioritize clients based on who is the loudest, rather than evaluating them against metrics like policy-related costs or potential lifetime value. 

The cherry on top of the renewal cake is that many agencies also rely on traditional marketing automation tools and generic email templates to attempt 'personalized' touchpoints to the rest of their book, which can quickly detract from the client experience. These automated renewal conversations often lack any real policy insights and data-driven context, any true value for the individual client; more often than not, agents simply draw attention to the fact a policy has increased without providing the necessary background or education around why.

These conversations can “frustrate and annoy” clients, encouraging them to shop around for different agencies who can provide a better service. And for the clients who do decide to renew, templated and cookie-cutter automations like this often lead to missed cross-sell and upsell opportunities.

5 benefits of intelligent segmentation

Unlike basic segmentation — which groups clients based on nothing more than premium increases — intelligent segmentation ingests and analyzes data from multiple sources including PDF policies, third party data, carrier underwriting manuals, bulletins and more. 

This empowers agencies to leverage data-backed and AI-enabled renewal insights to optimize their book of business, ensuring policy conversations happen with the right clients and at the right time during their renewal period. This enhances client relationships and drives long-term growth, as well as provides agents with value-up-front during renewal conversations.

Intelligent segmentation also helps agents:

1. Open up cross-sell and upsell opportunities

When agents only have time to engage with a fraction of their book, they inevitably miss revenue opportunities. Intelligent segmentation gives agents visibility into every policy, allowing them to proactively identify upsell, cross-sell and client retention opportunities.

2. Surface actionable renewal insights and tailor policy recommendations

Clients have life stages, assets and risk preferences that influence their insurance needs. Intelligent segmentation surfaces these insights automatically, enabling agents to provide tailor-made recommendations based on real-time (yes, real-time) client data. 

This means agents can quickly evaluate and recommend coverages that align with each client’s unique requirements. It also empowers agents to deliver richer client experiences and strengthen the advisor-client relationship.

3. Perform comprehensive policy checks across your entire book of business 

A personal lines policy evolves year-over-year, with new claims, rate changes and potential discounts that often go unnoticed.

Intelligent segmentation enables agencies to conduct full line-by-line policy checks across their book, ensuring that no coverage gaps or cost-saving opportunities are overlooked. This level of precision helps agents deliver a personalized client experience to a larger portion of their book, while protecting clients from unnecessary risks.

4. Eliminate wasted time sifting through carrier data

AI-enabled renewal intelligence uses key policy information to segment clients and surfaces critical policy insights so that agents don't waste time sifting through pages of carrier data. 

By removing administrative tasks like this, agents can become more strategic in nature as they’re able to concentrate efforts on advising clients and nurturing relationships, which ultimately drives better client outcomes.

5. Deliver a proactive experience to all clients, not some clients 

Renewal intelligence means agents can engage every client with meaningful and timely communication, rather than reserving a high-touch VIP experience for just a select few individuals. 

Delivering a more proactive and consistent experience ensures every client feels informed, supported and prioritized during renewal conversations. It also ensures that every client gets a renewal conversation.

Communicating to the right clients, and engaging them at the right time

Intelligent segmentation means that the right clients receive the right level of service, and at the right time.

We’re reiterating this point for good reason: By relying on AI-powered renewal intelligence, agencies can move beyond templated, one-size-fits-all outreach strategies that detract from the client experience and instead provide everyone with context-rich, timely and hyper-personalized communications that strengthens trust, provides value and, most importantly, boosts retention. And for agencies that embrace this approach, retention is just the tip of the iceberg. AI renewal insights give agents the agency to develop client relationships, and as we all know, strong relationships are the key to profitability.

To learn more about how Quandri is helping clients achieve a more intelligent approach to client segmentation, watch our webinar; Ditch the Email Templates with Quandri Connect.

‍

‍