11 Apr Are You Honoring Your Agency’s Non-Pay Position?
Probably the first question should be, “Does your agency have a position on following up on direct bill non-pay notices?” If not, you should.
This issue often comes with a lack of consistency. Often, the internal staff responds, “Our agency procedure is not to follow up, but we have no idea what the producers are doing.” While I don’t have any statistics, I would guess that more agencies have probably implemented a follow-up method over the last 20 years. “It is easier to retain an account than to write a new one” is a common thought that makes great sense. Also, from what I hear, trying to rewrite an account (one that has been canceled for non-pay) can be a challenge. Several agencies commented that they expect me to tell them not to do the follow-up. My response is that I don’t have that power. This is a business decision, and I cannot make those decisions for them. Still, they must understand several issues, including the importance of consistency in applying the procedure.
So, for those agencies that don’t have a stated policy on this issue, it is suggested to develop one. As you consider your position, it is suggested to consider how much time you would probably spend contacting clients via email or phone, and quite honestly, is this the best use of your time? Would this keep you from performing other important tasks, such as doing account rounding on your existing book, where you would probably see additional premium/revenue growth?
The key issue to realize is that when they undertake the duty to perform this follow-up, it creates a standard that your customers expect. They expect you to call them if there is a pending non-pay notice. If there is a pending non-pay notice and you don’t call them, they will presume there is no problem. Maybe the agency paid the premium? I know of one non-E&O Plus agency that actually pays the premium for the client if the carrier issues a non-pay notice! This is why agencies should have a set position on this issue, which should be communicated throughout the agency (including the producer staff). This set standard will help all staff know the expectations.
Many agencies say they want to do it, but only for some clients. That is okay; agencies can differentiate by type of client. For example, the agency might follow up on private / high-net-worth (HNW) clients but not Main Street accounts. A key issue involves consistency. If you follow up for HNW accounts, you follow up for all accounts of this type. And if you don’t follow up on Main Street clients, YOU DON’T FOLLOW UP ON MAIN STREET CLIENTS!
I have seen several agencies state for their book in total or a specific segment, “We don’t want to do it anymore, but how do we stop?” This needs to be handled properly. You can’t just stop without advising those clients. If you want to stop, you need to notify the customer. This notification should be in writing (sent certified if possible) to avoid a misunderstanding and ensure your intentions are clear. The notice should state that you will cease contacting them and when this “new” procedure will occur. Send this notice to all customers.
Again, I cannot stress this enough, when the agency determines its final position, it should be communicated (numerous times) to all staff, advising them of the agency procedure and stressing the importance of consistent adherence. Many agencies have built this issue into their audit questions to evaluate to what degree the staff are honoring the agency’s expectations.