Strategies for client retention

Risk Adviser speaks with risk specialist Phil Smith of Dawes Smith & Partners about the strategies he uses to retain clients, and how they will change with the coming industry reforms.

What client retention strategies do you currently use within your business?

Going forward the majority of new clients will be introduced to us by accountants, finance and general insurance brokers and, to a lesser degree, solicitors.

Eventually, clients will become part of our "business hub" where they will be looked after by our trusted third party partners and referrers. We view this as building a 'rabbit proof fence' around our clients. 

A three step claims advice document goes to everyone, every time we communicate with them reminding them that we personally handle every one of our clients' claims.

Four to six weeks prior to a client's policy anniversary we compare the market but not with a view to re-write the business, but to make sure their existing policy premium and policy conditions are still competitive.


We correspond with each client coming up to their anniversary date saying we understand nothing stays the same and ask to arrange a review to make sure we have them properly covered.

We don’t inundate clients with e-news items but do send real claim stories once or twice a year on claims we’ve handled for our clients. Also, we have developed a 'Terms of Engagement' agreement asking new and existing clients to agree on the basis upon which they want to have future dealings with us. We ask them to tell us what they expect from us.

How have you developed these strategies over the years?

Through necessity.

Before implementing regular 'touch points' and annual review invites with our clients, we found that when making contact (after failing to do so for a period of time) occasionally resulted in the client actually cancelling their insurance, most commonly with the phrase “forgot I was even paying for this each month”. It made us realise we had to stay in regular touch, at least once a year for risk insurance clients, but always tactfully and low key, making it clear we weren’t contacting them solely to sell them something else.

How effective have they been for keeping your clients in their policies and within your business?

Admittedly, it is still early days for us. We have only been proactively following this strategy for the past 12 months, but it’s definitely paying off. Retention has been good.

What challenges do you currently face when trying to retain clients?

The biggest issue for us going forward is the life insurance reforms. We try very hard to impress upon clients that we are implementing a long term plan. But 10 per cent of clients invariably want us to “shop” them around every year or two. 

From 1 July 2016 we will have to become even more selective with whom we deal. Our Terms of Engagement will have to specify an expectation that the risk insurance we put in place we do not envisage changing for a number of years [other than due to unexpected events outside of our control].

Will you have to be more vigilant with your clients to ensure they do not go elsewhere?

Perhaps, but we feel the structures and strategies we’ve been implementing this year will build a very strong proposition model for the medium to long term. 

Other than specific short-term business insurance situations, our approach is all about how we will be able to support our clients over the short, medium and long term. 

Our business hub will also help to keep clients “corralled” preventing outside entities from potentially “poaching” our risk insurance clients.

What changes will you have to make to your business to ensure it will be sustainable for the future?

We have already identified the need to “scale” our services to suit individual client situations. We have also set minimum premium income parameters, meaning we will no longer offer our services to lower income earners or potential “shoppers”. 

Basically, our future client base will be focussed on small and medium businesses, professionals and PAYG employees/families with more than $150,000 gross income per annum. 

From 1 July 2018, we will be able to sustain/support (based on our current 2015-16 capacity) 600 clients with an average API of $6,000, comprised of a minimum 100 “new” clients per annum and a minimum 400 ongoing [renewal] clients. 

Reality dictates that from 1 July 2018 we will not be offering our services to any “new” client below a minimum of $4,000 API – not by desire, but by necessity! And so the underinsurance problem in Australia will only worsen due to the life insurance reforms.

Strategies for client retention
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