2001 Best Practices Study

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

E FFECTIVE P ROCEDURES /P ROCESSES

“After we standardized our procedures, we got a much better understanding of the bottlenecks. We were able to free up some highly paid people by simply taking a few processing items from them.” “After our computer conversion, we decided to make the most of the system. That forced us to thoughtfully plan what data we really wanted to capture and how. It was painful for the first few months. Now, our staff can’t believe what we used to do.” “Loyalty used to be defined as the last accommodation on an account. We are increasingly aware of the pressures on the companies, and we need to change the way we do business if we expect to compete.” “Our companies are as important as our clients. The latter is who we serve. The former is what we serve.” “Give me an experienced underwriter with a desire to write profitable business, and I will be unstoppable.”

Many of the leading agencies have learned the problems associated with having people process business differently. While new automation purchases have forced some standardization in business processing, creating processing standards remains a challenge. However, when compared against the costs of not actively addressing these issues, standardization is an obvious area of focus. Many have turned to resources provided by their agency management system user groups, outside consultants, or industry organizations for help in developing and implementing such standards. Others have established employee teams to develop them. The key is making sure they are adhered to. The prevention of E&O exposure, productivity losses, and poor follow-through is good reason to standardize workflow and procedures. Many firms have used the process of “reengineering” to develop formal service standards, checklists and methods to evaluate the abilities of the staff. This leads to better customer service, better retention, and in the end a better agency. In the changes that are currently taking place in the market, most agencies cite close carrier relations as central to their future success. In light of the fact that many carriers are losing faith in the agency system to deliver an increased flow of quality business, the leading agencies are clearly striving to overcome that perception and build strong relationships. The “carrier of choice” for agencies varies greatly, but is often based on the personal relationships that have grown between agents and carriers. And agents are increasingly more dependent on their lead carriers. As a result they are concerned about their ability to feed a number of companies a sufficient quantity of new business and to focus in the sales area. Some of the practices used to maintain and build company relationships are open communications, a willingness to put themselves in the company’s shoes, complete and accurate submissions, and adherence to the company’s underwriting guidelines. C ARRIER R ELATIONSHIPS

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