MAXIMIZING AUTOMATION

By Wanda Shumaker

SPEND MONEY TO MAKE MONEY

Tweaking personal lines workflows for maximum efficiency

Sometimes you have to spend money to make money. But you already know that. However, have you applied that philosophy to your personal lines workflows? Given the dramatic changes occurring in the industry, it's no surprise that your personal lines department is reeling from these changes. The days of easy quotes and relatively consistent underwriting rules are gone. Obtaining an accurate quote is no easy undertaking, given the impact of burgeoning rate increases and credit scores. While there are good comparative rating software packages in place, the disparity in many carrier interface portals adds additional steps to what originally was supposed to be a "single entry" effort.

So, what's a harried personal lines staffer to do?

In an ideal world, the quote-to-issue route isn't littered with disparate technology solutions and varying interface portals. And while there are non-proprietary technology solutions that promise to make this attainable, not all carriers are on board, which still leaves agencies with multiple workflows. In the meantime, though, agencies can take steps to streamline internal procedures to minimize the challenges of the current market and technology situations.

The first step is to identify and examine the source of time-consuming redundancies in the workflow. When I'm helping agencies rebuild and streamline their workflows, I ask some of the following questions to identify time-consuming tasks. Then we look for ways to minimize or avoid those tasks.

What percentage of your new business is issued at a different rate than originally quoted?

Some agencies report it's as high as 20%.

What's the most common reason for these differences?

The most prevalent answer is that prospects don't recall all of their auto violations, or aren't completely forthcoming in responding to the initial agent inquiry. The MVR that the carrier eventually runs indicates violations that the prospect didn't recall accurately.

How much time do you spend answering questions about the differences, or explaining the difference to the prospect?

The typical answer is a predictable: "Way too much." Revisiting a difference in premium often means investigating why, possibly even re-quoting from the beginning, calling back and often "calming down" the prospect. In the worst cases, it can mean losing credibility with the prospect and potentially losing the business.

Why doesn't the agency obtain the MVR and/or other underwriting reports prior to quoting?

The usual response: "Because we have to pay for it if we don't write the policy."

Some agencies, though, respond differently. Recently, I did an informal telephone and e-mail query of five agencies of varying sizes. Four of the five indicated that they're applying the underwriting tactics up front--they obtain the MVR, CLUE and sometimes the credit score (depending on the carrier requirements) before ever attempting to quote the policy.

Those on the other side of the "to pay or not to pay" debate will say: "But we have to pay for those reports. We don't want to pay for that information unless we know we're going to write the policy." While some carriers will reimburse an agency for MVRs if they get the business, if the agency opts to preemptively run these reports, the cost may be theirs to assume.

However, organizations such as ChoicePoint offer Web-enabled software that provides immediate MVR/CLUE access giving the agent greater underwriting accuracy. Less time is spent pursuing quotes that wouldn't be considered with accurate underwriting information. The accuracy of quotes as compared to issued premiums also improves dramatically, which lessens the time spent after the fact investigating the difference, explaining the difference to the prospect, and sometimes even re-quoting.

You can educate prospects on the process of quoting and issuing a policy by advising them that you obtain an MVR and a CLUE report, as doing so will ensure the most accurate and competitive quote for their needs. Taking this strategy, you're not putting prospective clients on the spot to sift through their memory for past traffic infractions. If the reports reveal a history for this prospect that makes him or her ineligible for any of your carriers, you can still advise and educate the prospect on how to use this information to improve his or her chances of a more attractive rate in the future.

So, what about the cost? What about paying for these underwriting reports up front, even if it means not being able to write the policy? In my informal survey of the five agencies that I mentioned earlier, I learned that the cost of explaining, investigating and re-quoting "after the fact" is far more costly and time consuming than the costs associated with obtaining the individual MVR or CLUE report up front.

Some of the agencies said that they also used additional "pre-screening" questions to get a feel for the prospect's overall objective for changing agents, particularly for walk-in or call-in prospects who weren't otherwise referred. If there were other underwriting matters that precluded insurability that had nothing to do with an MVR or CLUE report, the agency may not even get to the point of ordering an MVR or CLUE.

In addition to tweaking internal processes to maximize efficiency, it also makes sense to exercise greater scrutiny in agency/carrier market relationships. Keep staff up to date on the best markets with the best coverage for the cost, the most lucrative contingency relationships, and those most aligned with agency technology needs. *

The author

Wanda Shumaker's company, WJS Consulting Group, provides practical insights into the effective use of agency technology. Since entering the insurance industry nearly 25 years ago, she has assisted more than 500 agencies while acting as a trainer for a major software vendor. Contact Wanda via e-mail at wanda@wjscg.com or visit her Web site: www.wjscg.com.