From coverage to confidence: Building long-term client loyalty in a distracted world

Do you know how to end small talk at a party? Bring up home insurance.
Even at social events with other executives, explaining the challenges of making home insurance affordable will clear a room. Before the recent rise in costs and drop in availability, consumers' eyes would glaze over when you start talking about the many risks a multi-peril policy protects against. Discussion of fire, flood, theft, injuries on your property and increasingly severe storms were met with confusion.

Today, that discussion is met with poorly disguised disgust or anger and the thought, "I have never had a claim." Never mind that 95% of customers have no claim every year and the majority have no claim in their lifetime — the importance of this coverage is lost in the debate about its expense. Recent research from J.D. Power underscores just how misunderstood the industry has become. Nearly half of homeowners and renters saw their premiums rise this past year, yet only one in three understood why, and fewer than one in five said their insurer or agent explained how to manage or lower their bill. That knowledge gap, more than price alone, is fueling the loss of trust and loyalty across the market.

Hard markets are identified by inflation, rising premiums, and extreme weather.
The most recent hard market and the inability of carriers to react quickly with higher rates has left many policyholders frustrated and distrustful. Competing on price alone isn't enough to restore confidence. To earn lasting client loyalty in this distracted environment, insurers and agents must shift their focus from simply providing coverage to delivering more. We need to build confidence with coverages that are perceived as more useful, and service that is more creative.

A lower price doesn't build loyalty

For years, analytics tools have been used to lower prices in the hope of winning market share. Customers gained on price are just as easily lost when another carrier matches it. Anyone can match a rate even without analytics. A strategy built on cost alone is fragile, and expensive. In fact, it's five to seven times more costly to acquire a new customer than to retain an existing one. So how do you earn more loyalty than a lower profit margin provides?

Operating efficiently matters. We need to give more back to the home insurance customer than we have in the past. Companies with strong expense ratios can pass savings on to consumers.

Longer term loyalty is earned when policyholders believe their insurer will be there when it matters most with stronger coverage, fair claims settlements and superior customer service. The upside is real: just a 5% increase in retention can boost profits by 25% to 95%.

However, price may attract, but unique relationships retain. The winners are not all about price or they would invest the money they invest in advertising in lower rates. Long-term success comes from trust and reliability.

Independent agents as loyalty builders

Independent agents remain the highest-rated channel for customer satisfaction. McKinsey research shows that 20% of policyholders would switch carriers if their agent stopped representing that carrier. Agents are not just distribution partners: they are loyalty linchpins.

The only coverage required in a home insurance policy is the Coverage A, which mortgage providers require. Agents can compare multiple carrier financial strengths, rates and coverages. Agents can recommend optional coverages that fit a client's needs.In a hard market, this ability to personalize is invaluable. True loyalty comes not only from securing the right policy, but also from the ongoing trust relationship earned through good advice.

Consumers prefer human interaction even as technology advances. In fact, 75% of consumers still want to interact with a real person when making important decisions. Independent agents call customers to ascertain safety ahead of a storm. They explain premium changes with empathy.They track customer lives so they can adjust coverage to their needs. They warn customers of bad news coming such as a wave of industry price increases. They are valued partners. Personal interactions transform insurance from a commodity into a relationship built on confidence.

Carriers' role: Equipping agents to inspire confidence

Independent agencies are small businesses competing against well-known national brands. Carriers can empower agents with tools that enhance customer experience and build loyalty. Technology is key here, helping enhance communication and reminding policyholders of coverages they may not be able to afford.

• Digital quoting & automation: Nearly all customer research buying options online.Nearly half of auto insurance shoppers now purchase policies through digital channels, according to J.D. Power's 2025 Digital Experience Study. With that level of digital adoption, embedding instant-quote and ready-to-bind tools in your website is table stakes. These tools give agents valuable time to advise clients and deepen relationships rather than just calculating a rate.
• Communication innovations: More than 80% of consumers prefer texting with their agent. Platforms that support text interactions meet customers where they are, which is on their phones, while strengthening agent–client bonds. Plymouth Rock's live chat options are popular with its agents. It allows them to deliver fast responses and among our offerings, is rated for generating the highest satisfaction.
• Claims collaboration tools: Industry forecasts show that more than half of claims could be automated and digitally resolved by 2030, with adoption accelerating year over year. Tools like ClaimXperience and Xactimate allow for transparency and speed. This rapid integration is driven by AI's ability to significantly increase operational efficiency, detect fraud, improve risk assessment, and enhance customer experience.  Faster, more collaborative claims reinforce trust when confidence matters most.
• AI-powered customer insights: By equipping agents with real-time insights, carriers help them shift from transactional selling to being a trusted advisor. In fact, insurers that have implemented AI at scale have seen up to a 20% improvement in new-agent success and conversion rates, and AI leaders are creating 6x the shareholder returns of peers. With real-time insights, agents shift from transactional selling to trusted advising.

When carriers equip agents with technology that enhances communication, efficiency, and service, they streamline processes and give agents the means to deliver loyalty-building experiences.

Meeting clients where they are

One of the most effective ways to build loyalty is through proactive engagement. The start of a new year, for example, is an ideal time for agents to reconnect with clients. Agents can check on incremental life changes such as home renovations, relocations, or financial resolutions. Homeowners' coverage can shift with it.

Some ways to make these conversations impactful:

1. Consumer preferences: Self-service is no longer a novelty; it's an expectation. Today's policyholders prefer to initiate and manage claims, payments, and policy changes through live chat or digital channels. Voice or phone service is quickly becoming a last resort. Customers report higher satisfaction when insurers pair self-service options with human support at their choice. Agents who embrace these tools can better meet expectations and strengthen long-term relationships.
2. Inflation education: While inflation has begun to show signs of easing, many policyholders may still have questions about rising premiums. Independent agents can help provide facts around what is driving increases and caution against the risks of dropping coverages.
3. Financial resolutions: Two-thirds of Americans set financial goals each year. Agents can align discussions with an annual goal setting so that they understand broader financial priorities, not just coverage needs.

Engage clients proactively and on their terms. Show attentiveness and care. Demonstrate those qualities that build durable loyalty.
Insurance has always been about helping people survive the unexpected. That survival has never been more important or more complex.

Price will always matter, but it will not secure long-term loyalty. What will? Agents who combine personal guidance with digital ease, carriers who empower their partners with technology, and leaders who keep the human element at the center of innovation.

In an environment where loyalty scores have fallen and bundles are unraveling, confidence is the new currency. By closing the communication gap, insurers can transform rising rates from frustration into a moment of reassurance.