by Kel Plasket, CPCU, AAI
There are significant opportunities to improve agency processes for marketing larger commercial lines account renewals and new business to carriers. This article outlines commonly found problems in these processes and then makes several practical recommendations to help agencies take total control of every piece of the renewal process except the time frame for receiving quotes and receiving the actual policy which are in the carrier’s control. These process improvements reduce staff stress and backlog, establish clear accountability, and free up the staff to perform as professional insurance consultants providing pro-active client service, rather than as paper pushers racing to meet last minute deadlines.
Improving Commercial Lines Account Marketing
A Proven and Profitable Process
by Kel Plasket, CPCU, AAI
Is your agency experiencing a little stress getting business placed in today’s marketplace? Have putting out fires, meeting last minute deadlines and jumping through hoops become commonplace with your renewals? Has the staff’s daily routine been dictated by constant turmoil? Is it difficult to keep up with the rapidly changing markets and underwriting guidelines? Does the staff really look forward to coming to work every day? If any of this sounds familiar, welcome to the independent agency experience.
The good news is that it doesn’t have to be like this! Let’s first take a look at what causes an agency to be placed in this position. The renewal process starts when the monthly expiration list is distributed – typically anywhere from 90 to 150 days prior to the renewal date. Many times, this list sits without being looked at for the next 30-60 days. There is inconsistency among account managers within most agencies as to what is done with the list. Some order loss runs; some have marketing strategy meetings; some send information gathering packets to the client or set up an appointment to review the account; and some just allow the account to renew as is with limited to no client contact.
Many agencies rush to send incomplete applications to numerous carriers to block the competition from quoting. Many of these submissions contain last year’s underwriting information because “there has not been time” to gather updated information or “the client has not been responsive” to requests. There is also an excessive amount of remarketing being done. Thus begins the time consuming process of back-and-forth phone calls between the underwriters, agencies and clients as they attempt to piece together a viable submission that contains all of the required underwriting information and associated supplemental applications to get an accurate quote.
The continuous last minute urgency in beating the renewal date deadline causes a lot of frustration in many agencies. The account managers have become more like clerical paper pushers instead of professional insurance consultants. They have lost control of their desks and daily processing backlogs have become the norm. As a result, true, pro-active client service suffers.
Causes of CL Processing Problems
Of course there are some underlying reasons that cause most of these problems surrounding the marketing of renewals:
- Lack of ownership of the renewal process
- Absence of a strict renewal timeline
- Inconsistencies in how accounts are handled and who handles them
- Limited accountability
- Poor data integrity (staff does not trust the data on the agency management system)
- Client underwriting information is stored in numerous places
- Multiple carrier submissions are being sent with the prospect of only receiving a minimal number of quotes
- Proposals do not adequately prefill from the database and
- Paper processing backlog continues to increase.
While staff tends to blame the carriers for delays, the truth of the matter is that the agency has the ability to be in total control of every piece of the renewal process except the time frame for receiving quotes from the carriers and receiving the actual renewal policy. Many agencies have difficulty in seeing this because no one has taken full ownership of the renewal process.
Owning the Renewal Process
The account managers need to own the renewal process. By this I mean they must control, complete and/or delegate each task of the renewal process to ensure the various specific timeframes are met. One individual – totally responsible for making sure everything comes together when it’s supposed to. This assigns accountability and eliminates overlapping of roles between producers, marketers, account managers and account assistants. The account manager (or delegated individual) should:
- Send submissions to only the carriers that can be responsive to the clients’ coverage needs
- Remarket only those accounts where the premiums and/or coverages can truly be improved
- Evaluate the true need for spending significant time quoting multiple markets
- Work on building a stronger client relationship in order to minimize the time spent remarketing with numerous carriers over and over again.
Consider developing a Stewardship program for larger accounts. This will enable the agency to stay in contact with the client more consistently throughout the year and make the renewal process less of a burden. It also places an emphasis on the client relationship and redirects the focus away from renewal dates and anticipated price increases.
Create a renewal timeline that identifies specific tasks, responsibilities and roles. Organize the best use of the staff’s time throughout the year to maximize productivity and growth opportunities. The appropriate renewal timeline for your agency should be created by looking at the renewal process in reverse order. Decide when you would like
to receive your renewal policies from the carriers and then work backwards to determine when:
- You need to bind coverage
- You need to put your proposal together
- You have to have your quotes from the carriers
- Your submission must be sent
- You must have collected the updated renewal information from your client
- You must hold your renewal strategy meeting, and finally when
- You need to run the expiration list in order to accomplish all of the above time frames you have set.
The best proven time frame for beginning the renewal process is 120-150 days prior to the renewal.
Whoever is responsible for collecting updated renewal information from the client should be held accountable for:
- Gathering all necessary information (including supplemental applications) within the specified time frame
- Communicating with clients to stress the importance of gathering data earlier to enable an opportunity to provide better rates, carriers, coverages, service, etc. and
- Creating templates that make it as easy as possible for the client to provide updated information within the required timeframes.
As information is received, the account manager should update the agency management system immediately. This will make the submission process an easier task. Your underwriters will look forward to receiving timely, complete and accurate submissions. Eventually the agency will begin to receive quotes sooner than the current experience.
Keeping Renewal Information Together
Information management is instrumental to the renewal marketing process. All client underwriting data regarding the marketing process should be kept in one place that the staff agrees to use. This will make it easier to review an account, create and track carrier submissions, and put a final proposal together for the client. Use of the agency management system, scanning system or a combination of both will work as long as the process is standardized within the agency. Some agencies use a “Marketing Analysis Document” (a plain Word document) or “Marketing Activity” to record all pertinent information for every carrier submission in one place. This makes it easy for anyone to find the immediate status of the account. Many agencies have implemented a specific scanning procedure for their marketing process. Documents included in the submission are scanned to a “submission file” and then e-mailed to the underwriter as an attachment.
Agency Proposal Templates
When all of the quotes are finally received from the carriers, it is time to put the final proposal together for the client. There should be an agency proposal template that prefills all client data directly from the agency management system that limits the need for corrections and rewrites. The agency should not allow the “core” proposal to be altered, but additional pages can be added as necessary to customize for a specific account, including the attachment of schedules electronically. The entire process for creating a final proposal should not take a lot of time.
After coverage is bound and the renewal policies are finally received from the carrier, they should be processed immediately (verified, invoiced, agency management system updated, cover letter written, etc.) and sent out to the client. The worst thing to do is to put them in a pile until all of the policies are received for that account. This immediately adds to the backlog, makes it difficult for the accounting department to reconcile the account to the carrier statement and does little to improve the service to your client. If the client wants to receive all policies at the same time, the agency should still process each policy upon receipt to ensure any needed corrections are ordered immediately.
The concept of “Centralized Marketing” is taking a foothold in a number of agencies. Marketing responsibilities are handled by a marketing person or department as opposed to having account managers and producers involved in the marketing process. This allows the staff to focus on their strengths, improves carrier relationships, raises the level of client service and creates capacity within the organization. Carriers actually like to limit their contacts within an agency as it improves communication tremendously. The challenge for the agency is to determine exact transition points when responsibility is transferred from producer to marketing to service staff. In most agencies, a centralized marketing department is primarily created to handle new business submissions. As the comfort level and expertise increases, the remarketing of larger renewals is added to the department’s responsibilities.
New Business Marketing Plan
The agency should also have in place a new business marketing plan. This document describes the type of business the agency wants to write, but more importantly, it lists the types of business that should not be written. Do not be afraid to walk away from new business if it does not fit within your marketing guidelines. I have seen so much time and effort wasted on attempting to place accounts that are outside of the agency’s capabilities. Either the agency does not have the standard markets to write the account adequately; or there is a lack of in-house expertise to service it properly; or there is not enough lead time to develop an adequate submission.
Successfully Managing Change
The most difficult part out of all I have discussed above is to get the staff and producers to change the way they are currently doing things and adopt a consistent process. Don’t expect them to do it on their own. Someone needs to be assigned to monitor the entire process to ensure that the agency’s new standards, time frames and roles are being maintained. A strong quality management program that holds staff accountable for their actions and non-actions will meet with great success.
Please keep in mind that an effective marketing process is not achieved overnight. Routine meetings and open communication with the staff and carriers is essential. The agency’s management team must also continuously support the process by providing the tools and leadership required to implement these changes. Many agencies across the country have already successfully met the challenge. With the current economy, now is the best time to set the wheels in motion for your organization.
Kel Plasket, principal of Operations Management Consulting, LLC, is a consultant specializing in insurance agency operations management. He works with agencies to increase their growth, productivity and profit through analysis, solutions and implementation. He can be contacted at 256-765-9953 or firstname.lastname@example.org. Kel produced this article for the Agents Council for Technology (ACT), a part of the Independent Insurance Agents & Brokers of America. For more information about ACT, visit www.independentagent.com/act or contact Jeff Yates, ACT Executive Director at email@example.com. This article reflects the views of the author and should not be construed as an official statement by ACT.