Cross-selling is big business for insurance companies. Retention rates are about 10 percent higher for customers who bundle their auto and homeowners policies compared with monoline policyholders. And, of course, if you can get a customer to buy two policies in one transaction, you increase your revenue and decrease your average acquisition costs.
To entice policyholders to bundle, many carriers provide a multipolicy discount.
So why do about one-third of homeowners place their auto and homeowners policies with different insurers? One factor is lack of awareness. Some customers just don’t know about the benefits of bundling policies with the same carrier. Historically, most insurers have not promoted bundling options and discounts as aggressively as they’ve advertised single lines of insurance.
That’s starting to change. I’ve recently noticed several insurers promoting the benefits of bundling. One example is Progressive, which has made bundling the centerpiece of recent marketing efforts on the web and on TV:
GEICO’s recent advertising also makes it clear that the company sells more than auto insurance. Other insurers are pursuing similar strategies.
Another potential obstacle to policy bundling is a clunky process, especially at the point of sale. Although the majority of the top personal auto carriers that also sell homeowners insurance let customers complete web quotes for both lines, getting a bundled quote is often not seamless. Many carriers make customers go through separate quoting processes. Applicants have to fill out common fields, such as name and address, twice.
With more and more customers seeking insurance coverage online, you have a huge opportunity to streamline the quoting process for multiline policies. You can integrate the required information fields into one application. You can also prefill a lot of the data on your application — so your customer only has to verify the information in most fields. That can speed up the quoting process and increase the percentage of applications that convert to actual sales.
I think the message is clear: If you increase your marketing efforts to promote your multiline discounts and incentives — and if you take advantage of technology and third-party data to streamline your multipolicy quoting process — you’ll be in a good position to gain competitive advantage for new business.