https://completemarkets.com/Article/article-post/204/Working-Your-Plan-For-Renewals/
Working Your Plan For Renewals
Remember when 'renew same' or 'renew as is' with your initials written on the copy of a declarations page were acceptable directives for a company underwriter? Those were the days, my friend and, alas, they have come to an end.
The renewal process has become far more complex. Without a solid plan of action with specifically defined mechanisms, renewals can easily take control of a CSR's time. When this happens, service suffers.
True risk management - providing total financial protection for clients - requires time and careful attention to details. This sort of quality care leads to excellent retention rates. You've heard it before: It costs far less to keep an existing account than it costs to get a new one. So, implementing a careful renewal transaction plan is of paramount importance.
Planning your work then working your plan helps you accomplish more in a day. A solid renewal control process will help you control your work rather than it controlling you!
Here are some recommended steps for implementing a comprehensive renewal flow plan:
RENEWALS
1) Get the renewal control list. This list should be prepared from the information contained in invoices. The agency's bookkeeper or accounting personnel can prepare this report three to four months in advance of the renewal month. The list should be produced by date and in alphabetical order. If you work in a team, the list can be generated by producer code and in chronological order.
2) Update. Review the list and make direct notations on it with information about modified expiration dates, coverage types, and so on.
3) Review with producers. The list now becomes a skeleton 'agenda' for a meeting of the minds. The CSR (along with other CSRs involved with the account), the producer(s) of record, the sales manager (if you have one), and the bookkeeper should meet to design a strategy for determining who will contact each client and estimating how much time the account will take to renew.
At this time, you should also identify how you will contact the client - by mail,e-mail, phone interview, or personal visit.
4) Review and develop coverage. Establish a strategy to determine the coverage needs of a particular account for the coming year. Note ideas about ways to develop a protection plan. Consider: whether anyone else should be introduced to the account (e.g., a Group Life/Health specialist); what kind and how many service transactions were required during the past year.
5) Create a suspense for each account. Enter a specific suspense date signaling when to start concentrating on a particular account. The suspense should allow an appropriate amount of time for meeting with the client, documenting the information required, submitting it to the carrier(s), and preparing a formal renewal proposal (if necessary).
6) Present the renewal proposal to the client a week to 10 days prior to the actual renewal date. Gather updated renewal information. Review the file and identify as much detail as possible about property and liability exposures, claim frequency and type, transaction requirements, and so on. Do your homework. Try to get as much done as possible internally before contacting a client.
7) Conduct a client review. Use telephone, mail, e-mail, or a personal visit to complete a needs analysis or coverage checklist with the decision-maker or the appropriate representative for the account (the controller, accountant, office manager, etc.).
8) Return this information to the CSR (or marketing representative). When the client review is complete, the information should be returned to the agency in a legible format for premium estimation and proposal completion.
9) Prepare renewal applications. When getting quotes on a particular renewal (after verifying the underwriters' approval and interest), complete and submit renewal applications with an appropriate suspense date.
10) Update the renewal control list. Make a notation on the renewal list (given to you as step number one) concerning progress on the account. Review and update the renewal control list as part of your daily routine.
11) Update the activity log. At the same time you're monitoring the overall control of the renewal process, it's also a good idea to note any actions taken in the client's record. This way, anyone can see at a glance the status of an account.
12) Rate. Another important aspect to the renewal transaction is to determine if premium credits are needed to retain the account. A word of caution - those who live on price will die on price. Ensure that your clients know the added value in doing business with you ,rather than a competitor. Ask agency staff and clients, 'Besides price, what does a client want or need from you?' Once you have the desired price range, determine whether the account will be rated in-house or submitted to the company for premium estimates.
13) Call first. The company underwriter and/or marketing representative deserve the opportunity to indicate their willingness to do a good job on the account. Without their advance approval, you might wait a long time for a response/premium estimate and might not like what you get once you do get it. A common courtesy, and big time-saver, is to call the company first to determine their interest in the account.
14) Prepare worksheets for premium estimates. Compiling the needed facts readies you for the rating process. (It's like preparing for a meal - you have to have all the ingredients before you can begin to prepare a dish.)
15) Submit for rating. If someone else is doing the calculations, prepare the necessary information, then transmit it to the appropriate company representative.
16) Create a suspense. Or note on the renewal control list an appropriate time frame for receipt of updated figures and premium estimates.
When premium estimates are received or calculated, verify and review their accuracy.
Update the renewal control log again, indicating the receipt and preparation of the proposal.
Update the activity log in the client's database indicating the status of the renewal process. Again, this allows anyone needing access to a record to know its status.
17) Review with sales. It's time now to advise the producer that you've received premium estimates and are ready to prepare a formal renewal proposal.
18) Prepare renewal proposal. Using standard forms or pre-formatted documents, print and bind a formal proposal of coverage types, amounts, and estimated premiums for presentation to the client. A deposit premium statement should be included so the producer can procure the client's commitment.
19) Present. Now the producer (along with the CSR when appropriate) meets with the client to explain the proposed renewal coverages and premium estimates. This is also the time to confirm that the client will, in fact, renew the protection plan with your agency.
20) Develop the account. The presentation provides an excellent opportunity to upgrade the client's coverage plan. Earlier in the renewal process, you should have identified specific areas requiring development. Now is the time to ask for the business.
If the client throws you a curve and decides not to renew, refer to cancellation transaction procedures. Don't allow him or her to leave easily!
21) Yes - Renew. The producer should obtain an estimated premium deposit, large enough to commit the client but small enough to modify without too much effort once the policies are actually received. Also, note any corrections directly on the renewal proposal at this time.
22) Send the information to the CSR. The producer brings the renewal presentation back to the agency, providing any correction or changed data and communicates with the appropriate CSR. The CSR prepares the order for renewal for the insurance carrier. Update coverage and order renewal policies based on the information obtained above.
23) Prepare binders; invoice/ID cards. While policies are being prepared by the insurance company, the agency should prepare appropriate documentation as defined in its carrier contracts. Binders of coverage, actual invoices, identification cards, or proofs of insurance are examples of the documentation you can provide.
24) Create suspense for the policies to be returned from the company.
25) Go to 'Policy Received' - another transactional work-flow that can also be used when you've ordered a policy endorsement.
POLICY RECEIVED
Now that the plan for generating renewals has been effective, it's useful to implement a plan for handling the policies you've received. Here are some recommended steps for servicing those accounts effectively:
1) Review for accuracy. Upon receipt of an updated declaration, validate its accuracy. This is an ideal opportunity for a service assistant to learn by doing. Allow him or her to review the policy against your request(s) for coverage.
2) Invoice if applicable. If, following these guidelines, you've only prepared premium estimates and collected a deposit premium, now it's time to actually invoice the premiums due, while preparing a summarized statement for your client to pay.
3) Receive payment from the client. Submit the information to the bookkeeper or enter it directly into the client's database and the agency's accounting system.
If the policy is issued incorrectly, submit a correction request FYI:
Advise the producer that the policies are in the agency and being readied for delivery.
4) Update activity log. Note in the client's database that policies have been received.
Note: Hold the actual renewal delivery until all policies have been received.
5) Update renewal control. Indicate in the control column for policies processed the date you prepared the coverage documentation for the producer to deliver to the client.
6) Update profile. Revise the client's database to indicate new policy numbers (if applicable), new coverage amounts, and any other current information gained thorough the renewal process.
7) Deliver or mail renewal protection plan (with disclaimers and confirmations). Depending on the account's size and service requirements, the producer should personally deliver the updated policies. Smaller, less demanding accounts can easily be mailed.
8) Establish service contact. During the delivery meeting, the producer and the client should arrive at a consensus about the appropriate frequency of service calls. Some accounts prefer monthly calls, while others are perfectly content with a mid-year review. Agreed-upon dates should be suspended for appropriate reminder and scheduling.
9) Notify unsuccessful companies when you get multiple quotes for an account. Relationship(s) can be strengthened with those not earning the business by acknowledging your gratitude for their time and effort and also explaining why they didn't get it.
10) Create audit suspense. Establish a diary that covers the 30 to 60 days following the renewal for receipt of company audit of the previous year's figures.
11) Send a thank-you letter or note to the client (along with any additional insureds) indicating your appreciation for their renewing, inviting their questions and changes throughout the coming year, and introducing any other support team members they may not have met.
The renewal process can be as simple or as complex as you make it. Utilizing this suggested plan of action, with specifically defined mechanisms, can help you control your time while adding value to the service you provide for customers and producers. Plan your work, then work your plan to help you feel satisfied with a job well done!
PERSONAL LINES
The Personal Lines renewal work flow should be slightly simpler than that outlined in the lead article. Some suggested modifications for Personal Lines follow.
The Renewal Control List is very helpful - again, it provides you with a management mechanism. Personal Lines lists can be generated two to three months in advance.
You might or might not need to review the control with producer(s). This point should be predetermined by account type and satisfaction standards defined in league with your customers.
Renewal applications and/or phone calls to the company underwriter are usually not required activities for Personal Lines although renewal questionnaires are sometimes provided by companies. Simply completing the information requested should satisfy the desire for updated information. A call to the underwriter might be in order if the risk potential on the account has changed significantly during the past year (e.g., the insureds have started breeding Dobermans or their twins have just turned 16 and will begin driving the family car).
A review with sales is necessary only if the account falls within predetermined standards for a producer's personal contact. Preparing a renewal proposal can be as simple as a one-page, computer-generated letter that highlights any major changes, summarizes the property description and coverage types, and invites the client to contact you if they have questions.
The final difference between the Personal Lines and Commercial Lines renewal process as defined in the previous pages is that Personal Lines need not 'create an audit suspense.'
CONCLUSION
Advance preparation, managing time and work efforts, account development, and client satisfaction all provide solid arguments for implementing a comprehensive renewal control procedure.
https://completemarkets.com/Article/article-post/1858/System-Utilization-Your-Return-on-Investment/
System Utilization: Your Return On Investment
SYSTEM UTILIZATION WHAT'S YOUR RETURN ON INVESTMENT? by Tripp Leach Are you getting your money's worth? Yes, you know you're getting value from your Agency Management System (AMS). But do you really know how much of the system's capability your agency is using? You probably know the Return on Investment (ROI) on your last stock or mutual fund, but what about the ROI on your AMS? Does it really matter? Many agents don't know the answer to these questions; in many cases, they've never given it any thought. They dutifully bought a system 'because it was the right thing to do.' Then they immediately turned it over to their bookkeeper or accounting department (since computers were for 'number crunchers') and blissfully went about the business of selling and servicing. Today, most agencies have a comprehensive automation system. They also have a high degree of automation knowledge, but are still not what you would call 'techies.' For the most part, they have no idea if they're using their system to anywhere near its full capability. The Agency Management System Utilization Survey that follows will allow you to measure your system usage and then take action to improve it. Although neither a complete survey of every possible function in every major agency management system, nor a measure of every type of software available to agents and brokers, the survey will open your eyes to forgotten uses of your AMS. Take the time now to print and complete this survey. Measuring your agency utilization is the first step toward improving it. The test can be completed in a few hours. Once you have completed and scored it, your strengths and weaknesses will be apparent. Several key people in your agency should complete their own copies of the survey, and then compare their answers to get an accurate overall picture. AGENCY MANAGEMENT SYSTEM UTILIZATION SURVEY DIRECTIONS: Read the description of each automated activity and give yourself two points if your agency performs the activity as described. Give yourself one point if your agency performs part of this activity. Give yourself an extra point if your agency performs the extra-point (EP) activity. SCORING: Total your score at the bottom of each section and divide by the number indicated to get your percent total. Then total all sections and divide by the number indicated to determine your percentage Return On Investment (ROI). SECTION I - FINANCIAL CONTROLS BILLING and COLLECTION: ___ Open item billing is used. ___ All invoices are system generated, and only one copy is printed. ___ Graded commissions are entered so that the insured receives a single-line invoice but the detail prints on the company account current. ___ Installment plans are created when billing the policy. ___ EP: Installment registers are reviewed before printing. ___ Binder billings are issued for all new business. ___ Binder billings are issued for all renewal policies at least 15 days before the renewal date if the policy has not been received. ___ A binder register is run weekly. ___ EP: A binder register is generated monthly for management review. ___ EP: A binder register is generated by the company for review with company field persons. ___ The binder bill suspense account is reconciled monthly. ___ Aged accounts receivable reports for agency-defined aging periods are generated at least twice a month. ___ EP: Aging periods are the same as company payables payment dates. ___ The open item payable report is run to review unpaid invoices prior to paying companies. ___ Past-due notices or letters are part of the agency's letter library and are generated by the accounting department. ___ Prebilled items due within the next 30 days appear on an insured's monthly statement. BILLING AND COLLECTION SCORE ______ DIVIDED BY 24 = ______% ACCOUNTS PAYABLE: ___ Companies paid from company statements are set up as open items for ease in reconciliation. ___ The company payable account is reconciled monthly using the company payable summary. ___ Producer commission is entered on invoices, and producer statements are used to pay producers. ___ All checks are produced by the system. ACCOUNTS PAYABLE SCORE ______ DIVIDED BY 8 = ______% GENERAL LEDGER: ___ The balance sheet and income and expense statement are printed and reviewed regularly. ___ EP: Departmentalized accounting is used to track individual profit centers. ___ Budget figures are loaded and reviewed periodically. ___ Spreadsheets are used to review retention, account development /commissions, operating and administrative expenses, liquidity, etc. ___ EP: Data is downloaded rather than re-keyed. ___ Direct bill accounts are reconciled. GENERAL LEDGER SCORE ______ DIVIDED BY 8 = ______% SECTION I-FINANCIAL CONTROLS SCORE ______ DIVIDED BY 40 = ______% SECTION II-DAILY MANAGEMENT CONTROLS ___ System backup is performed daily. ___ Additional shared drive backups are performed on a regular basis. ___ Daily management summary is reviewed each day. ___ EP: Corrective action is taken immediately to correct errors. ___ Policy Expiration Report is used on a daily basis to confirm that binders have been issued. SECTION II-DAILY MANAGEMENT CONTROLS SCORE ______ DIVIDED BY 8 = ______% SECTION III-CLIENT SERVICE MANAGEMENT CLAIMS PROCESSING: ___ Computer files are consulted for coverage information before paper files when a claim is reported or there is an inquiry. ___ All ACORD claim forms are system-generated. ___ Loss information is entered directly to online ACORD forms by the CSR when taking the claim over the phone from the insured. ___ All insureds who report claims receive personalized form letters that confirm the claim has been reported to the company and provide adjuster or other information. ___ EP: Personalized form letters are sent when the claim is closed. ___ A narrative of contacts with insureds, company claims persons, and adjusters is maintained on the system. ___ Claims are entered in diary for follow-up. ___ EP: System-generated follow-up notices are used. CLAIMS PROCESSING SCORE ______ DIVIDED BY 8 = ______% ENDORSEMENT PROCESSING: ___ Computer files are accessed before paper files when insureds call with a change request. ___ EP: A letter or memo is sent to the insured confirming the request to the company. ___ Change-request forms are system generated. ___ Policy detail data is changed at the time of the endorsement request. ___ Endorsement premiums are calculated with an integrated rating system, and an estimated invoice generated. ___ Change requests are entered into the computer's diary. ___ EP: System-generated follow-up notices are used. ___ Endorsements are checked against computer files for accuracy when they are received from the company. ___ A personalized form letter is sent with the endorsement to the insured. ENDORSEMENT PROCESSING SCORE ______DIVIDED BY 14 = ______% RENEWAL PROCESSING: ___ Expiration lists sorted by producer and contact are run monthly. ___ EP: A direct bill list is generated by company, producer, and expiration date. ___ An 'unprocessed' renewal list is run at fixed intervals. ___ System-generated renewal requests are submitted to companies at least 60 days in advance. ___ An account loss summary is run to review claims. ___ EP: Account loss ratios are computed as part of renewal process. ___ Renewal applications for remarketing are system generated. ___ Integrated rating is used to compute renewal quotes if they are not ordered from the company. ___ Expiration notices and renewal quotes are sent to all non-standard policyholders 30 days in advance of renewal. ___ EP: Final notice is sent 10 days in advance. ___ EP: An expired notice is sent on the X-date. ___ Renewal requests are entered into the computer's diary. ___ Renewals are checked against computer files for accuracy when they are received from the company. ___ A personalized form letter is sent to the insured with the renewal. ___ Certificates are system generated, with prefilled insured and policy data. ___ EP: Certificate holder lists are stored on the system and reviewed at renewal. ___ A 'canceled' policy list is prepared periodically, and reason (rationale) codes are reviewed to determine why the policy was canceled. ___ EP: A 'Thank you for your business' letter is sent to each client. ___ Canceled clients are re-coded as prospects and entered into diary for future sales contact. RENEWAL PROCESSING SCORE ______DIVIDED BY 26 = ______% SERVICE SUPPORT: ___ A single, central diary system is maintained. ___ Each employee maintains a diary on the system. ___ Diary items are closed when the action is completed. ___ Diary lists are printed/reviewed daily by each employee. ___ Management periodically reviews open-diary items. ___ Diary lists for employees who are ill or on vacation are reviewed by a designated person. ___ Producers use the system to enter account contacts into diary. ___ Standard letters and paragraphs are stored for all routine agency correspondence. ___ Word processing is used for all correspondence. SERVICE SUPPORT SCORE ______ DIVIDED BY 18 = ______% SECTION III-CLIENT SERVICE MANAGEMENT SCORE ______ DIVIDED BY 66 = ______% SECTION IV-CLAIMS MANAGEMENT ___ Paid, reserve, and subrogation information is maintained on the system. ___ Open claims are entered into diary for follow-up. ___ Claims reports are run on a regular basis for review of claims status. ___ Claim summary reports by producer and company are run at end of year. SECTION IV-CLAIMS MANAGEMENT SCORE ______ DIVIDED BY 8 = ______% SECTION V-MARKETING MANAGEMENT DATABASE: ___ Prospects are loaded in the system as they are identified. ___ EP: Prospects are coded so that they can be separated from clients. ___ EP: A separate prospect database is used to maintain prospect information. Prospect coding includes: ___ A method for identifying what you wish to sell the prospect and an X-date. ___ A method for identifying the date and type of last contact. ___ A method for identifying who is responsible for calling the prospect. ___ A method to identify the source of referral business. ___ EP: An appreciation letter is part of the letter library. ___ A method to identify unwritten prospects who are maintained for re-solicitation. ___ EP: Prospect files contain dollar value of policy. ___ A method to identify previous clients who are still prospects. ___ A method to identify the Life needs of P/C prospects. ___ A method to identify lines of business not written for clients. ___ Certificate holders are part of the prospect database and have been solicited. ___ Third-party claimants have been added to the prospect database. ___ EP: A claim service survey letter is sent. ___ A list of new prospects with X-dates or SIC codes is purchased for soliciting new business. ___ A method for deleting and purging prospects on a regular basis. DATABASE SCORE ______ DIVIDED BY 26 = ______% WORD PROCESSING: At least one letter is stored which: ___ Solicits a missing line of insurance from an insured. ___ Introduces the agency to prospects, telling them you will be calling. ___ Thanks a prospect for an X-date or an appointment. ___ Thanks an account for its business. ___ EP: The letter contains a list of employees and/or the service personnel. ___ Recommends additional coverages and higher limits. ___ Describes market changes for certain customers. ___ Asks for referral from clients. Word processing is used for: ___ Boilerplate proposals covering the parameters of a quote. ___ EP: Proposal software is being utilized. ___ Correspondence with insurance companies. ___ Target marketing. ___ Contacting prior clients. WORD PROCESSING SCORE ______ DIVIDED BY 22 = ______% SALES SUPPORT: Our agency: ___ Uses coverage checklists generated by proposal software to analyze exposures and recommend coverages. ___ EP: Coverage checklists are used when renewing policies. ___ Sends policy quotes to underwriters with applications. ___ Uses computer-generated ACORD applications for quotes. ___ Uses a computer diary program to track activity (letters, calls, etc.). ___ EP: Binders are entered into system diary for follow-up. ___ Uses an automated method to track producer and company 'hit ratios.' ___ Uses an automated home cost estimator. ___ CSRs request X-dates for missing lines of business. ___ CSRs suggest appropriate upgrades in limits/coverages by telephone. ___ CSRs are assigned producer codes for commissions earned on new business through account rounding. SALES SUPPORT SCORE ______ DIVIDED BY 18 = ______% REPORTS: Reports generated on demand include: ___ Both Personal and Commercial lines prospects with X-dates for the month and the next 12 months. ___ A list of accounts for cross-selling, generated on a regular basis. ___ Codes are used to identify business written during a specific sales campaign. ___ Sales costs are compared to income periodically during a sales campaign. ___ The gross profit analysis report is run at least annually. REPORTS SCORE ______ DIVIDED BY 10 = ______% SECTION V-MARKETING MANAGEMENT SCORE ______ DIVIDED BY 76 = ______% SECTION VI-RATING AND UNDERWRITING MANAGEMENT Our agency: ___ Uses Personal Lines comparative rating programs.