15 Mar Following Up on Direct Bill Cancellation Notices
This issue seems to be one of the more questioned procedures in agencies. Should the agency follow up on non-pay notices or not? While I don’t have any exact numbers on what percentage of agencies are performing this task, I would guess upwards of half of the agencies are performing this follow-up. While it is preferred that agencies not do this follow-up, I get why they do. Among the reasons: 1. It is easier to retain an account than to write a new one, and 2. Agencies feel a strong need to do it because the competition is doing it.
One issue agencies are encouraged to look at is how much time it spends contacting the client via email or phone. I often hear agency staff request that I help them get “10 hours of work done in an 8-hour day.” While I don’t have that magic, my response is typically centered around the issue of efficiency. Another question for agencies to ask themselves is, “while you are busy for eight hours, is this the best use of your time” / “are you doing the most important tasks?” In other words, if you were not following up on non-pay notices, is there a better way to spend that time? I used to teach a class every year for the Massachusetts Agents Association (the E&O exposures of Personal Lines – 14 hours!), and I posed this question. One agency staff member commented that they used to do the follow-up but decided it was not the best use of their time, so they stopped doing it (more about that in a minute). They then used that “found time” to implement a more robust account rounding program, and they were amazed at how much new business they wrote from within their current client book.
The key issue agencies must realize is that when they undertake the duty to perform this follow-up, this creates a standard that your customers are expecting. 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 pays the premium for the client if the carrier issues a non-pay notice!
Agencies must have a set position on this issue. This set standard will help all staff know the expectations, and 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.
“We don’t want to do it anymore, but how do we stop?” This is a great question and needs to be handled properly. First, quitting cold turkey is not an option. If you stopped and didn’t tell them you were going to stop, there is a chance that your client would think that everything is fine since you didn’t call. So once you assume the duty, it is yours. 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 extremely clear. The notice should state that you will cease contacting them and when this “new” procedure is going to take place. Send this notice to all customers.
Then it is up to the staff to be certain that they honor this new procedure – no exceptions.