By Curtis Pearsall, President, Pearsall Associates, Inc., and Special Consultant to the Utica National E&O Program
With the 4th and final quarter of 2014 under way, most agencies are looking to finish strong and start goal setting for 2015. This goal setting should include some errors-and-omissions goals for agencies to be successful. It appears that those agencies that continually enhance their E&O culture and commitment are being rewarded by writing more business and protecting themselves when E&O litigation arises.
Now is an ideal time to begin the development of your E&O goals for 2015. This will enable your agency to implement new initiatives as early in the year as possible. A good starting point involves a “reality check” on how things are going. A review of issues, such as the following, is suggested:
• Need for staff training
• Review/update of the current agency procedures
• A focus of customer education using various methods
When setting your goal, it is best to focus on a handful of initiatives, at most. Trying to launch too many has the potential to result in doing an “okay” job on a significant number, as opposed to a solid job on a more manageable number. Here are some items to consider:
Enhance your staff education. After all, agencies don’t make mistakes, people do. A strong focus on ensuring that you have a technically proficient staff that possesses strong customer service and automation skills is recommended. Work individually with each staff member to identify those areas that need improvement. Each employee’s annual performance review should include the specific goals that were agreed upon.
Include a cover letter when sending out new and renewal policies. This ties in with the duty in most states for the customer to read his or her policy.
Raise awareness of options and limits. Make sure your customers are aware of limit options and that higher limits are available.
Get signatures. Be a fanatic about requiring the staff (producers, account managers, CSRs, etc.) to secure customers’ signatures on the various insurance applications.
Secure the customer’s sign-off on all rejected coverages. This is one aspect of an enhanced focus on documentation that will reap benefits if E&O litigation develops. There is a general feeling in the courts that “if it is not in the file, it didn’t happen,” so any initiative that strengthens the agency’s documentation culture and commitment is a good thing.
Perform – or at least offer to perform – annual reviews with your customers. This could involve a live discussion or a form that is automatically sent to each personal and commercial lines customer 60-90 days prior to the expiration of his or her coverage. The goal is to secure an update of any changes in exposures so that some insurance discussions can take place. Include coverages for a customer to consider, such as flood, earthquake, home businesses, various types of personal articles floaters, umbrellas, etc. While some may believe that “it’s their job” for a CSR to identify gaps and round out the various accounts, consider an incentive or form of compensation for the staff. Many agencies have enjoyed solid success in this initiative by “rewarding” the staff.
Educate your customers. Take some time and ask your staff what insurance issues are potentially misunderstood and need to be communicated. It is important to examine the issues by line of business and then develop a marketing/education campaign using the media that would be most effective. There have been a number of surveys that spoke to customers’ desire to understand the coverage they have and how it works. One of the biggest segments of the population that wants this education and advice is the 18-24 age group.
Establish a strong quality control/audit process – or update your current one. The goal of an audit process is to verify that the staff meets the expectations established by the agency. Without this type of a process, how can any agency feel confident that the various tasks and requirements are being met? Maybe there is a need for further training. Be proactive – don’t wait for a claim to develop to discover some issues.
Good results don’t just happen. They involve a strong culture and commitment of management and every person in the agency. As you finish up 2014, dedicate some time and thought to how you can enhance the E&O culture in your agency. Establishing some well-thought-out attainable E&O initiatives is a step in the right direction and should pay solid benefits moving forward. You may just find your agency selling some more business, too.