3 trends to keep in mind when recommending policies

The first quarter of the year is a perfect time to re-engage with clients. While they plan their 2023 financial demands, you can help them ensure that their homes are properly insured.  This year, new economic forces and rising technology trends will impact the coverage your clients need.

The best approach is to ask questions.  A lot can change in a year – from home renovations to deferred maintenance… even a planned move.  If an agent asks the right questions about a client’s plans, you can provide personalized policy recommendations. Not only do clients benefit from how your offerings fit into their financial goals, but you can also use the opportunity to address market trends that could impact their buying decisions. 

Some of those trends include:

Consumer engagement preferences

The pandemic may now be endemic, but consumer preferences around engagement with their insurance providers will forever be changed by COVID-19.  The best carriers have seized the moment to introduce whole new ways to interact and deliver services.  

For instance, self-inspection tools now allow homeowners to avoid having unfamiliar strangers on their property.  By using cell phones, a policyholder can conduct detailed inspections to assure proper coverage.  When there is a claim, market leaders offer self-serve adjusting tools.  

Self-directed inspection and appraisal are leftovers from a no-contact era, but also harbingers of better and more service options to come.  According to Bain & Company’s Customer Behavior and Loyalty in Insurance Report, simple and convenient self-service channels are expected to continue to thrive and delight consumers. 

Think about on-demand immediate price quotes. Think of self-serve tools online and on smartphones that are available 24/7.  Many of these tools are so popular, your customers now prefer them over traditional methods – by voice or email or in person – of doing business.

According to the same Bain & Company report, the way agents engage with their clients will continue to hinge on insurers’ development of advanced digital capabilities.  Agents can point customers to carriers that offer easy to use and convenient ways of addressing customers’ needs.  Many of those customers are willing to pay more for such tools.  Technology will continue to be on policyholders’ minds in 2023.

Inflation

The Bureau of Labor Statistics has confirmed what we already felt: Inflation rates are higher than they’ve been since the early 1980’s. We’ve seen the average cost of claims rise nearly 30% from pre-pandemic days.  This means the cost of insurance is going up as well.  

The cost squeeze offers agents a unique opportunity to educate policyholders.  You will inevitably answer challenging questions about why their home insurance policies rates are increasing this year. If you don’t have that discussion – or you’re unprepared for it – policyholders may be tempted to select higher deductibles, reduce their optional coverages, or even shop elsewhere to try to save money.  Often, those moves have illusory benefits – a claim may cost more than the deductible savings or a company that is competitive now raises rates (or rejects the risk) later.  Agents can take the wheel and steer the policyholder in the right direction. 

Agents have never had a better opportunity to make the trusted advisor relationship worth it to policyholders.  Help them understand all of the factors that are contributing to the changes.  Describe to them the downsides of reducing their coverage.  Tell stories about the differences you have observed with different quality carriers.  The discriminating buyer pays more for quality.

Financial resolutions

Data published by Alegeus reveals that 66% of Americans made financial related resolutions for 2023.  They may be committing to save more (54%), spend less (44%), or stick to a budget (38%). Of course, some homeowners may be planning a 2023 addition on their home.  They may have targeted reducing how much they pay for their home insurance policy as a way to save. Confusing economic times can scare clients into irrational moves. The agent can come to the rescue.

Agents should stay informed of how the latest emerging trends such as technology usage and persistent inflation are impacting their client. You are the calming influence with informative information, carrying wisdom built on years of experience in a business that the average policyholder rarely thinks about.