Auto Policy Renewal Rates

[BlockO]

let me answer these one at a time.....

Block has mentioned it can be lucrative...can you elaborate?

I never said that. you can make good money off of non-standard, but "lucrative" is quite a stretch. I only know of a few agencies who have become rich solely off of non-standard, and I'm certainly not one of them! comparing apples to oranges, I would rather have a preferred book over a non-standard book any day. I'm not sure what you are referring to about me saying it is lucrative, but I just meant that the gap between the two (preferred and non-standard) isn't as nearly as wide as some make it out to be. there are pros and cons for both sides, but preferred always trumps non-standard in the long run. I'm simply committed to the non-standard market because this agency focused on that business for 20 years before I ever got here. But I'm always looking for opportunities to reel in customers from outside the non-standard market as well (although I have learned that it's a lot more competitive than the non-standard market).

With that poor retention rate how are you guys making solid money on non standard business?

the ones that do stick around seem to stick around for a long time. it builds up over time just like the preferred market does. It just takes a little longer to get there.


Is there that much new walk in business?

no. not for me anyways. but I work out of my home. agents who have an office in town probably do a lot better with walk ins. but from my experience, walk ins can be the worst regarding retention rates. referrals and generating internet leads are where it's at (much less competition in the non-standard market and they stay on the books longer than walkins).

Are you charging policy fees?

nope. If I tried adding on policy fees, another agency would smoke my rates.

Is there profit sharing better?

profit sharing? what's that?

In my estimation the only way to outearn that poor retention is to have so much new business coming in that it works itself out. Maybe mining the bum book for preferred packages down the road? ENLIGHTEN ME

as I said before, preferred always trumps non-standard. but the opportunity for new business is better with the non-standard market simply because of less competition. but as for having "so much new business" .... I wish!


Now, if someone could answer my question: do companies count 30 day policies when calculating retention rates? and if so, how does that work?

 

[indienoise]

Nonstandard can be a GREAT market, if you pursue the right subset. My area has A LOT of non US license families. Many of them, the only factor keeping them out of standard is not having a state issued license and SSN. If you've got an in to that community (and either speak Spanish or have a good translator), you've got a very loyal customer base that is not afraid to bring you referrals. We had so much success with this market with our buy here pay here lot, it was only natural to continue it with the insurance agency. Titan was really the perfect carrier for this market in my area, I'm anxiously waiting for them to lift the moratorium in our state.

Thankfully that loyalty factor i mentioned is strong and I'm continuing to write business in my target market even if my premiums end up slightly higher than the competition.