How to Recover Lost Premium Revenue Due to COVID-19

The COVID-19 pandemic has presented a unique set of challenges for insurance agents all across the country. As the corporate insurance carriers see drivers aren’t utilizing their vehicles as much as normal, the demand for an insurance premium renewal discount, or refund is inevitable. That said, how are those refunds and discounts going to affect your insurance agencies’ renewal revenues for the next six months, and how do you prepare for that loss? Running a business can already a challenge when businesses functions as usual. Toss in a 15-25% six month premium discount into the mix, and that’s a 15-25% loss of revenue across the board. Let’s see a couple ways to overcome this challenge, and keep your agency afloat without losing anything of value.


UP-SELL - Did anyone ever tell you that you don’t need internet leads? It’s true, you have the best source of leads sitting right in front of you: Your Current Book of Business! You also have the best lead generation tools known to the industry: Your Sales Staff! With the upcoming premium discounts that are going to happen, take this time to put better covered products into your client’s hand. Instead of keeping their $1,000 deductible on auto insurance, turn them on to the idea of keeping their payments the same, but lowering that deductible or increasing their liability coverages. Maybe it's time to add that Umbrella policy to their auto & fire coverage, or how about adding that additional vehicle that hasn't been put on their policy yet?


CROSS-SELL - Very similar to Up-Selling, but an entirely different approach. There is going to be a level of trust required to pivot your book of business onto new products. You can’t walk in on day one and expect a client who’s had your carrier for over 15 years to sit down for an IFR. That’s just not a reality. That said, with the uptick in COVID-19 health scares and job transition, now is a better time than ever to pivot Life Insurance coverage. A lot of people just lost their life insurance at their place of employment, or have seen the impact of not having life insurance in place. Insurance Agents are currently getting 3 times more requests for life insurance proposals since January 1st of this year, than the entire year of 2019 combined!


PRODUCE - Now is the time for your sales staff to sell more than ever. If you need to recover 25% of your insurance premium revenues, that means you need to produce at least DOUBLE the NET NEW policies you are currently producing. That means if your team is selling 40 policies a month, you need to sell 80. If you have a $500,000 book of business, you’re looking at a renewal premium of $375,000, a loss of $125,000 in premium - all by no fault of your own. In order to make up that $125,000 loss, how many policies do you need to sell per month? Is your team equipped to do so? If not, how will you make this work?


GET REFERRALS - A lot of people are not going to be happy with how their current carrier is handling the coronavirus premium renewal discounts. As people lose jobs, and situations change, they are more willing than ever to evaluate their monthly insurance costs. On the other side of the coin, your clients will also be looking for ways to earn some additional benefits. Develop a proven referral process and program, and make it worth your client’s time. If you spend $1,000 on 100 internet leads to win 10 new policies (common industry conversion rate on internet leads), why wouldn’t you spend $500 to get 100 leads that close at a rate 30-40 times higher than cold calling internet leads?


CUT TIES - Breaking up is hard to do. However, and this is not ideal, your business may have to find ways to cut costs. This could be in labor, office amenities, or even in business tools and marketing. In this time of transition, some things just won’t make fiscal sense anymore. While we would never recommend letting an employee go, or cutting back on in-office amenities for your clients, or even cutting back on marketing - it may be your only choice. THIS SHOULD BE A LAST RESORT.



Insurance Lead HQ is an Insurance Sales Training & Agency Development Platform, designed to help insurance agents grow their business by increasing their insurance premium revenues. If you are interested in learning how we have helped our current partners highlight key areas they’ve never considered, earned their partnership, and produced results, Request Your Demo today!


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