How to Increase the Value of Your Medicare Book of Business
Regardless of your agency's future plans, there will likely come a time when you want to sell your business. One of the top things buyers are looking at is the value of your agency. Follow along for these top tips from New Horizons Insurance Marketing on how to increase the value of your Medicare book of business.
1. Increase Cross-Selling
Increase cross-selling, which means adding policies to your existing book. We all know we're supposed to be doing it all the time, and sometimes we aren't as good at it or as faithful as we should be. But that's one way to add value, for sure.
If you can add some extra policies – renewable, commission-paying policies like a cancer plan, final expense, DVH – those will really enhance those Med Supp or Med Advantage books of business.
Here's a quick list of cross-selling products that can add value to your book of business:
- Cancer Insurance
- Critical Illness
- Hospital Indemnity
- Dental, Vision, Hearing
- Long and short-term care/recovery care
- Life insurance products, including whole life and final expense
- Term life, but only if it has a renewal stream. (A lot of times, term products are first-year only, and in that case, it would not add any value to your valuation.)
2. Rewrite Business Coming Up On the 6th Year
If there are any tiers in the commission schedule, such as a Medicare Supplement that cuts down to a lower commission in the 7th or 11th year, and the majority of policies are in their 5th or 6th year, that will drag down the value.
Look at your book of business and make sure you're getting back with those customers.
Try to rewrite them and put them in a better position. That is an easy, effective way to enhance your business' value.
3. Keep a Steady Stream of New Business Coming In
We all know this – we're in the senior business, and when dealing with seniors, we lose them. When we lose them, it's mainly to death.
You have to make sure you're bringing in more in the front than what's going out the back. That's a hard way to put it, but that's the way it is.
You have to make sure you're bringing new customers to the table.
4. Increase Communication with Clients
One that's maybe more difficult – but if you have the means to do it, it really helps – is increasing communication with your customers. More communication with clients makes the transition so much easier.
Communicate more regularly with your customer base.
You get customers that have been with you a long time, they know you, they trust you, and you know they aren't going anywhere. It's easy to take them for granted, and you stop reaching out to them or checking on them.
Communicating with your customers more consistently is really a big deal – and not just when they pick up the phone and ask you about a rate increase!
5. Digitize Your Client Information
This can make a big impact and add value to your book of business, as well as make the transition easier for your clients. If you already have your customers in a CRM, that's perfect. If you don't, now's the time to consider your options. Not sure where to start? Read our blog: Best CRM Software for Insurance Agents In the Senior Market.
6. Get Extra Help
This is a simple one, but honestly, it's one that not many people do. Get more help, even if it's seasonal help, like getting you through the AEP. I'd really recommend that. Maybe you can find an intern to come in for three or four months to help you during that time when it's really hectic.
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by John Hockaday
on Tuesday, May 16, 2023
Insurance Agency Management System
- client retention