28 Nov “Don’t Go Away Mad (Just Go Away)”
As many of you know, at the recent E&O Plus Quality Management Seminar in San Diego, there was some discussion on firing a client for whatever reason. Some participants expressed frustration on getting rid of a client primarily because that client no longer fits your agency profile.
During that session, I thought telling the client – “Don’t Go Away Mad (Just Go Away)” would be nice. Little did I know (until I Googled it) that this expression is from a 1989 song by Mötley Crüe. Now that I have given you a history lesson, let’s get to the issue.
The bottom line is, wouldn’t it be nice to give your clients these seven words of advice and be done with them? Unfortunately, it is not that easy, especially if you want to instill some E&O protection into the situation.
I did a little research on “how to fire a client” and found a variety of approaches, some not as detailed as others. They all profess many of the same key points. Issues such as:
- Dedicate sufficient time and energy to the issue. In other words, don’t make a hasty decision. Make sure you are coming to the conclusion that “this client has to go” for the right and justifiable reasons.
- Do you want to provide the client with options, such as another agency?
- When do you want to deliver the message? You want to give the client time to place their coverage elsewhere. Certainly telling them two weeks before x-date is not very professional. Keep the message professional.
You want to keep it legal, although I could not locate any legal obligations that should be factored in. Despite that, it is not a bad idea to touch base with your state insurance department for any thoughts/guidance they may have.
I did reach out to our contacts at Swiss Re, and they were kind enough to offer a couple of letters that they have approved. The letters do reflect different scenarios.
Letter # 1
After much thought and reviewing our historical relationship together, we regret to inform you that ________________________ will not be able to renew your coverage(s) at your upcoming renewal. We are sending this notification to you now, to allow you time to find another agency that might have additional carrier selections that are better suited for your specific business needs. Our time and relationship together has truly been valuable and we hope you understand our reasoning behind this difficult decision.
We want to help make this transition as seamless as possible. Included in this communication, we are enclosing copies of policies, as well as years of loss run reports. Below are individual contacts you may reach out to for any additional documents, forms or reports that you might need from our files. We are happy to work with you in order to ensure a smooth transition for your business.
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Follow-Up Letter
According to the terms set out in our letter (dated x), our services as your Insurance Agent will terminate as of (date).
We would urge you to engage with another insurance agency as soon as possible who can better meet your needs. Any original documents pertaining to your business, which are still in our possession, will be returned to you by recorded delivery.
We would like to take the opportunity to thank you again for your business.
____________________________wishes you and your company success going forward.
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Letter #2
After much thought and reviewing our historical relationship together, we regret to inform you that ________________________ will not be able to renew your coverage(s) at your upcoming renewal. The reason the company is not willing to offer a renewal is that they have decided to exit this type of business.
Our agency does not currently have another market that writes your type of business. Therefore, effective ___________, we will no longer be able to offer insurance for your business. All coverage will cease on that date.
You should arrange to replace coverage with another agent or company. We have enclosed a summary of all claims paid under your policies for the previous five years. This should assist you in arranging replacement coverage.
We regret that this action is necessary, and we will provide assistance to you as you find an alternative insurance arrangement. Please call our office if you wish to discuss this situation.
You must have documentation in your agency system detailing how you communicated the agency’s plan to the client. This documentation should include at least a copy of the letter/actual email sent to the client. To verify receipt, a phone call follow-up with documentation of the call in the agency system will help with any potential circumstance should the client say they never received your written communication.
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If you can secure written confirmation from the client verifying that they received the letter and will be securing coverage elsewhere, that would be ideal.
Don’t just send the letter and assume that the client has gone away (mad or otherwise). A follow-up contact by your agency is suggested.
Hopefully, these suggestions will help you rid your agency of some clients you feel you are better off without. You hope they don’t go away mad, they just go away.