How to approach clients with existing contracts successfully

Make use of room for improvement

Outstanding insurance brokers and intermediaries have one thing in common: for them, winning new clients is not the only thing that counts. Optimising the contracts of existing clients matters, too. Have you ever wondered what hidden opportunities lie dormant in your clients' existing contracts?

Imagine countless clients paying for decades into a pension plan whose performance is clearly flagging. That is capital lost to retirement provision. Over the years, these amounts can add up to considerable sums and reduce financial security in retirement. At the same time, potential return opportunities are limited as a result, which could make both the contract's further performance and the later payouts considerably lower.

This is where you come in, because many clients are not even aware of the problem. They trust that their existing contracts are set up optimally, without suspecting that much more attractive options may have emerged over time. Perhaps their needs have changed, too, or they are in a new life situation, which could make it sensible to adjust or replace the contract. Or worse still: their contracts may never have been the right solution for their needs.

What does this mean for you as a broker or intermediary?
This is where you can offer your clients real added value. Take a close look at your clients' existing contracts and approach them actively with suggestions for improvement. With a professional analysis, you can show your clients how switching to modern solutions can save costs and increase their returns.

You could even go so far as to say that every unreviewed contract in your client portfolio is a missed opportunity, for both sides. By approaching your clients proactively and informing them about possible improvements, you create a win-win situation: your clients benefit from better contract terms and stronger return opportunities in retirement, while you demonstrate your expertise and strengthen long-term client loyalty.

If you work as a broker or intermediary in different areas of the insurance industry, your proactive approach to your clients also creates an enormous cross-selling opportunity. The stronger the client loyalty, the greater the trust. And the more you know about and understand your clients' needs, the better you can advise them on different insurance solutions.

Proactive, to the benefit of all parties: contract review and optimisation
A serious review of older contracts brings many advantages.

Key takeaways

• Greater client satisfaction: lower costs mean more capital for your clients' retirement. This is a calculation you should definitely make.
• Client loyalty: you give your clients the good feeling of having a trustworthy and competent intermediary at their side, the best basis for referrals.
• A better remuneration model: optimisation combined with NAV remuneration benefits both your clients and you personally. It lays the foundation for your passive income.

The benefits for your clients:

• Contract reviews as a proactive service: contact your existing clients regularly and actively offer contract reviews as a service.
• Transparent remuneration: you know best whether a gross or a net tariff is the best solution for your client. As a trusted broker and intermediary, you show your clients both options and advise them individually on the best solution for them. A before-and-after comparison of the remuneration options, for example, can speak for itself with concrete figures.
• Long-term support: offer ongoing support and advice so that you can respond to changes in your clients' lives or in the market.

These steps position you as an expert intermediary and build a lasting relationship of trust that strengthens your bond with your clients.

Take care when replacing contracts

Not every older contract should be replaced. For endowment life insurance and pension insurance with a capital option taken out before 1 January 2005, the old tax law continues to apply: under certain conditions, such as a contract term of at least twelve years, the gains are tax-free (§ 52 (28) sentence 5 EStG in conjunction with § 20 (1) no. 6 EStG in the version in force until the end of 2004; EStG is the German Income Tax Act). If such a contract is cancelled, this advantage is lost. A new contract can also bring new acquisition costs or a new health assessment. As an intermediary, you have to ask the client about their wishes and needs, advise them, give the reasons for your advice and document this (§ 61 VVG, the German Insurance Contract Act). Anyone who fails to point out the disadvantages of replacing a contract can become liable for damages (§ 63 VVG).

Article published by Prosperity Solutions AG