How a company makes decisions and executes them has long been a puzzle to agents. Sometimes, the decisions seem to reflect a cavalier attitude on the part of the company toward the agency plant. Using my imagination, I suspect agents envision something like the following:
BRANCH MANAGER: Let's get started reviewing these agents. It seems as if we do this each week.
UNDERWRITING MANAGER: We ought to.
MARKETING MANAGER: Let's not forget that the agent is our customer and that's why we have these jobs and perks. Remember, nothing happens until somebody sells something.
MARKETING MANAGER: The first agency to be reviewed is XYZ. They were appointed in 1921 and have had a loss ratio of .09 in the last 70 years.
BRANCH MANAGER: What's their current loss ratio?
MARKETING MANAGER: It's .91 for the first 10 months of this year.
UNDERWRITING MANAGER: Cancel them.
ALL: Okay.
MARKETING MANAGER: The next agency is . . .
BRANCH MANAGER: I have to go. Carry on without me.
UNDERWRITING MANAGER: Me, too.
The marketing manager then hands a stack of names to a secretary, who types and mails a notice to all the names: 'Please be advised that you have been canceled as of last week. Return any unused policies.'
I'm not saying this is how all meetings go, but it often seems that companies forget the agency is there to sell to buyers, place with underwriters, and service customers. The company is there to accept or reject the business, pay claims, and provide financial security. For some reason, the roles get mixed: Agents try to underwrite and companies try to sell.P
Remember the underwriting PENS of the 1980s? Each company claimed the loss ratio for PEN business was better than the loss ratio for other regular business. If so, why were the programs discontinued? The few PEN programs that still exist are more 'slot' underwriting rules than decision-making, authority programs.
Marketing managers have the opportunity to really get to know how agency decisions are made and can help a company fit into each agency in a meaningful way. Too often, agency meetings follow the scenario outlined above. Fortunately, this is the exception rather than the rule.
Perhaps some day, one of the prerequisites for a marketing manager will be a week-a-year stint working in an agency. (Some companies have already implemented this type of program.) Not only does the marketing manager get to see how the company can be more productive for an agency, but the marketing manager learns the inconsistencies of all insurance companies.