How Often Do Your Clients Cancel or Refuse a Policy Upon Delivery?

[GeorgeSolomon]

Ive had a client that told me she has told the bank to stop the cheque today once i went to deliver a policy to her. I'm just wondering what the numbers are within this part of the business. I understand that there is a retention rate and I'm just wondering what the average is and what the best insurance agents numbers are within this forum. By the way I'm new here and fairly new to the industry. However im experience in sales and thats why i understand the concept of retention. I just want to know the numbers so im not demotivated in the future.

 

[GMANPRO]

Ive had a client that told me she has told the bank to stop the cheque today once i went to deliver a policy to her. I'm just wondering what the numbers are within this part of the business. I understand that there is a retention rate and I'm just wondering what the average is and what the best insurance agents numbers are within this forum. By the way I'm new here and fairly new to the industry. However im experience in sales and thats why i understand the concept of retention. I just want to know the numbers so im not demotivated in the future.

Happened 1 time to me. Usually not an issue, just a select few difficult people.

 

[senior-advisor-indiana]

Ive had a client that told me she has told the bank to stop the cheque today once i went to deliver a policy to her. I'm just wondering what the numbers are within this part of the business. I understand that there is a retention rate and I'm just wondering what the average is and what the best insurance agents numbers are within this forum. By the way I'm new here and fairly new to the industry. However im experience in sales and thats why i understand the concept of retention. I just want to know the numbers so im not demotivated in the future.

It happens more often in the beginning of your career. It is very rare once you get some experience.

 

[GeorgeSolomon]

Well maybe I shouldn't of limited this thread to a specific question. I wanted to ask what agents numbers are in regards to retention as a whole, not just on delivery. My question would refer to a coincidental situation which was my mistake. In short what are your numbers? e.g 1/10, 1/5 how many people normally cancel policies as a whole?

 

[GMANPRO]

Well maybe I shouldn't of limited this thread to a specific question. I wanted to ask what agents numbers are in regards to retention as a whole, not just on delivery. My question would refer to a coincidental situation which was my mistake. In short what are your numbers? e.g 1/10, 1/5 how many people normally cancel policies as a whole?

Life and health, I have no idea. Good retention for a P&C agency is >90%.

 

[BNTRS]

To work through a few semantics here:

Retention is how many policies remain in force once placed in force.

Not taken is what you are describing above.

The two are viewed differently and carriers care about each one differently.

Since both can represent losses to the carrier, they aren't particularly thrilled with either case, but they aren't delusional about it.

Not taken tends to be less costly on the carrier's financial statement, and retention is only important for a certain length of time (though most carriers won't always admit this outright).

The reason for retention's only being important for a certain length of time has to do with the policy's asset share. This is--put crudely--the measure of the policy's profitability. After a while the insurance company will recognize a gain if the policy lapses and a loss if they have to pay a claim. The amount of time will vary widely by company and by product.

 

[WinoBlues]

On non taken? Maybe 2 in the last 5 years. And those were canceled in underwriting. One of them was last week.

On persistentsy(sp)? I do not know. I do not track it. First year lapse are pretty rare. 1 to 5 year surrenders/lapses a little higher but not bad. I am sometimes the the replacing the agent. After that, they pretty much stick unless I am replacing or rewriting them.

The last few years I have gotten more people surrendering for the cash values and then rewriting them.

 

[rousemark]

Got in trouble with this statement back in July (what ever happened to MGA) but in 41 years I have never had a policy issued as applied for returned as Not Taken. Shortly after that I thought I had jinxed myself as I had a supplemental health policy show up on my commission statement as non taken. I contacted the insured and asked why she had returned the policy and she had no idea what I was talking about. Got to checking and found out I had put the wrong bank routing number on her daft authorization. Since the company was to draft the first premium and it didn't clear, they counted it as NTO. Got the draft straightened out, and the policy reinstated so the record stands intact.

As for persistency, one should shoot for NQA status which is 90% 13 month retention.

You are going to loose business occasionally but there are some things you can do to keep it at a minimum.

Do not oversell Keep the premium within the ability of the client to pay.

As a general rule do not use the "10 Day Free Look Close"

Do not skip steps in the sales process.. even if the client asks you for the business, take the time to establish the need and illustrate why the coverage you are writing is the proper solution.

Personally, I prefer to deliver issued policies and resell the coverage on delivery. (That is also when I get referrals from the client)

If a client contacts you with a problem, don't let it stew. Take care of it ASAP.

Wish you the best in your new career..

 

[Cory]

I don't know that I've ever had this happen and if I did only once or twice... can't remember why. I just always liked to deliver the policies in person and explain to them that they did indeed get what they were paying for... congratulate them on getting approved, preferred rates, thank them for their business, etc. I know some agents that just mail their policies (which is fine), but I think delivering and explaining the policy closed the deal.

 

[GeorgeSolomon]

Got in trouble with this statement back in July (what ever happened to MGA) but in 41 years I have never had a policy issued as applied for returned as Not Taken. Shortly after that I thought I had jinxed myself as I had a supplemental health policy show up on my commission statement as non taken. I contacted the insured and asked why she had returned the policy and she had no idea what I was talking about. Got to checking and found out I had put the wrong bank routing number on her daft authorization. Since the company was to draft the first premium and it didn't clear, they counted it as NTO. Got the draft straightened out, and the policy reinstated so the record stands intact.

As for persistency, one should shoot for NQA status which is 90% 13 month retention.

You are going to loose business occasionally but there are some things you can do to keep it at a minimum.

Do not oversell Keep the premium within the ability of the client to pay.

As a general rule do not use the "10 Day Free Look Close"

Do not skip steps in the sales process.. even if the client asks you for the business, take the time to establish the need and illustrate why the coverage you are writing is the proper solution.

Personally, I prefer to deliver issued policies and resell the coverage on delivery. (That is also when I get referrals from the client)

If a client contacts you with a problem, don't let it stew. Take care of it ASAP.

Wish you the best in your new career..

I guess i kind of oversold her. Although she her self said that the 75 contribution was affordable. I should of told her to start at 60 to make her feel comfortable with me. Thanks anyways. I was just looking for some numbers that i can relate and alway understand that in every 10 sales i will most likely lose 1 although im aiming not too ofcourse. This forum is very insightful and i plan to be erecor a while.