5 Reasons Insurance Agencies Are Using CRM Software

By Aleksandr Peterson on March 22, 2016 in Database Management

5 Reasons Insurance Agencies Are Using CRM Software
Aleksandr Peterson

This guest blog post was written by Aleksandr Peterson, a Technology Analyst at TechnologyAdvice. TechnologyAdvice helps technology buyers make well-informed purchase decisions through comprehensive product listings & industry analysis.

If you run an insurance agency, your customers are your biggest asset. The more effort you invest into meeting their needs and improving relationships, the more profitable your agency will become.

Beyond selling plans and products, you should cultivate a deep knowledge of your customers and prospects. This will help you not only improve sales efforts, but also strengthen current accounts, efficiently resolve issues, and anticipate churn. That knowledge, of course, requires good data stewardship, which requires a central system for managing and accessing data.

We’re talking about customer relationship management software (CRM). CRM has become an immensely popular tool for insurance agencies over the past decade. According to a 2015 study, roughly 70 percent of direct and captive insurance companies are now using CRM software. Most adopters have seen immensely positive results; separate research shows an average return on investment of $5.60 per $1 spent.

If you’re researching CRM for the first time, you’re probably curious about its uses, applications, and benefits as they specifically pertain to your agency. While every organization will have its own unique needs and objectives, CRM offers clear advantages across the board. When you upgrade from spreadsheets and manual methods, you can expect to enjoy some of the following benefits:

Better Manage Your Book of Business

Instead of spreading out your customer records, notes, and account history in various emails and spreadsheets, you can store every piece of data in a secure, searchable location that stays updated in real time. This “single view of the truth” will give you easier access to information when you need it and a deeper knowledge of your clientele.

The more you know about clients, the more you can tailor your efforts to meet their needs and prevent churn before it happens —  for example, by setting up automatic notifications to manage policy renewals. Considering only 29 percent of customers say they’re happy with their current insurance provider, customer satisfaction is pretty important.

Keep a Clean Audit Trail

CRM software also gives agencies a better ability to manage regulatory challenges by keeping a detailed record of each account, policy, and customer. Most CRMs offer built-in file storage, change history, and archival features so your agents can attach all relevant communications and documents directly to client profiles.

The way a CRM handles client data and transaction records can make a big difference in staying compliant with regulations such as PCI-DSS, Sarbox, PPACA, and HIPAA, as well as state and federal insurance regulations. It also makes it easier for agents to maintain compliance with internal standards and troubleshoot historical client issues when necessary.

Maximize Revenue

There are several ways CRM platforms help agencies increase revenue. First, you can improve your prospecting workflow by tracking potential clients through each stage of the decision process and by automating repetitive sales tasks like follow-up emails.

You can also increase revenue by strengthening relationships with existing accounts. Use built-in analytical tools to make sure each client is assigned the best plans and products for their needs, and spot up-sell and cross-sell opportunities you might have otherwise missed.

Keep Track of Important Metrics

Most modern CRMs offer some assortment of pre-built reports. A generic platform will at least cover the basics: revenue, leads, products, campaigns, etc. An industry-specific platform will also report on metrics specific to insurance agencies. Here are some common examples:

  • Policy renewals
  • Annualized premiums
  • Application submissions/status
  • Commissions processing
  • Groups and individuals(by lead source, by status)
  • Policies by coverage type
  • Agent productivity

Gaining insights into these areas will help your leaders make important business decisions and improve workflows where necessary. While you certainly can draw reports from an Excel spreadsheet, it’s (1) a lot more difficult and (2) a “bespoke” representation that will become quickly outdated.

Improved Customer Service

Depending the structure of your organization, you may also decide to roll out a CRM for your service team. Although these reps don’t directly drive profit, they have a strong impact on customer satisfaction and lifetime value. Managing customer service and issue resolution through a centralized database is really the only way to succeed.

To that end, many CRMs provide case management or ticket management features that allow you to accept requests from various channels and track them through to resolution. Even if your clients only submit basic change requests and billing questions (for example — Why did my premium increase last month?), a CRM can still save valuable time and resources.

* * *

All of these functions are essential to the health of an insurance agency, and thus, interrelated. It’s no wonder that many agencies use CRM as a kind of operating system for their organization — the center of growth, transactions, maintenance, and reporting.

As you compare CRM software, try to pick a vendor that understands the nuances of your industry and whose product has proven its value to other organizations. If you’re still on the fence, gather your procurement team and use the benefits in this article to run a needs assessment. Good luck!

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