We’ve been hearing anecdotal evidence for awhile about how the economy is forcing your customers to cut back on their insurance coverage. Now, an Insurance Research Council study is suggesting a positive spin on that trend that casts agents and brokers in a key role as consultants (see the survey at www.irc.web).

According to the study:

28 percent of the respondents with auto insurance coverage reported shopping for lower rates when they normally would not have done so. Among those with auto or homeowners insurance, 15 percent said they had increased their insurance deductibles or reduced the amount of coverage in order to reduce premium costs.

The rest of the story suggests that consumers are giving up more that mere insurance: While 9 percent of survey respondents with at least one household vehicle reported canceling or not renewing vehicle coverage in response to the economic downturn, 31 percent of those canceling auto insurance coverage also reported selling a vehicle. Only 5 percent of homeowners and 14 percent of renters reported canceling homeowners or renters insurance coverage.

While this study clearly illustrates that the penny-pinching trend is now a way of life, the unwritten subtext involves the enhanced consultative role that agents and brokers should be playing in a tough economy.

We may be running the risk of belaboring the obvious here, but another survey from J.D. Power, just released this week, reiterates the importance of customer retention, especially in recessionary times.

Although focused on auto insurance, the report is interesting in its findings about consumer buying practices. The report looked at more than 275,000 auto insurance customers evaluating more than 30 insurance carriers across the industry, including AIG /21st Century, Allstate, American Family, Farmers, GEICO, Liberty Mutual, Nationwide, Progressive, State Farm, The Hartford, Travelers and USAA.

The report finds that in the past 12 months:

30 percent of households with annual incomes below $50,000 shopped for a new insurance carrier, and 45 percent of those customers eventually switched carriers;
26 percent of households with annual incomes of $100,000 or more shopped for a new carrier, and 31 percent of these eventually switched carriers

The message shouldn’t be a surprise: while everybody may be feeling the pinch, the buyers most likely to switch carriers (probably based on price) are those with less revenue at their disposal. I’d extrapolate to say that this probably applies to commercial buyers, too, who are similarly looking to cut back during these tough times.

Another no-brainer confirmed by the study is that increased retention rates are related to bundled insurance products. Retention rates averaged 95 percent among customers who bundle home and auto policies with the same insurance carrier and 92 percent among those who bundle auto and rental policies. Conversely, retention averages only 83 percent among mono-line auto customers and only 85 percent among policyholders who do not bundle their auto and homeowners insurance.

Again, this is a reflection of the fact that the more closely you tie customers to your agency with products and services, the harder it will be for them to move their business over to another agency.

Well, actually, I’m not. A friend invited me to open a Twitter microblogging account months ago, and it instantly annoyed me. Why should I want to receive 140-character, instantaneous outbursts on things I don’t care about from people I don’t know? My gut reaction was that it’s another narcissistic time-waster for teenagers who need to constantly validate their existence through technology. On a personal level, many of my friends are old jazz and film curmudgeons and other Luddite types who are still trying to wrap their minds around e-mail; and on a business level, I didn’t think I needed it.

It may be time to reevaluate.

Twitter reported signing up more than 5 million new users in March, bringing the total to 9.3 million all told. And this growth is being driven by a surprising demographic group: 45-to-54-year-olds, at 36 percent above average (another surprise: 18-to-24-year-olds are actually the least likely to use it!).
That’s a lot of Twitterers, many of whom are bound to be your customers, colleagues and friends.

Just this week I heard from Dana Rogers, a young agent who has her own technology blog to promote Twitter and virtually all other social media techniques as smart marketing tools for independent agents
(http://newgamemarketing.blogspot.com/).

And no less a personage than longtime agency marketing strategist Rick Morgan is promoting Twitter as an invaluable tool for sharing thoughts, resources and information among insurance professionals. Rick quotes the “Five Stages of Twitter Acceptance” (kind of like Elizabeth Kubler-Ross’s classic stages of grief): denial, presence, dumping, conversing and microblogging.

In spite of all this rah-rah, we’re still left with two burning questions: “Does it work?” and “Do I have the time for it?” As the author of a blog and the editor of a magazine, I’m more concerned with eliciting a reaction from readers of these two mediums than launching yet another. The answer to the second question would be a resounding “Yes!” if I could generate reader input by using it.

So, using Rick’s stages as a measurement, I’ve gotten as far as Phase 2: presence. I’m right there at @Lmazztoops, so send me a tweet today and turn me into an official Twit!