16 Apr Non-Renewals – What’s Your Process?
While non-renewals are nothing new, they are occurring with greater frequency, especially in states such as Florida and California, where Mother Nature has not been kind to the industry. Typically, as carriers analyze their year-end numbers by coverage or class of business (or both), they will aggressively shed business that has not been performing very well.
Given that your agency has probably had to deal with a non-renewed account recently, can you state with a fair amount of certainty that your agency has procedures detailing the next steps expected to be taken? If not, it is highly suggested that you put a procedure in place and consider a periodic post-mortem review to “audit” whether the procedure has been followed.
One approach some may feel is “ok” is to “do nothing.” After all, the account was provided legal notification (except on E&S business), and if they want your agency to provide options for replacement coverage, they will contact you. That is neither an approach we suggest nor one you should consider, regardless of your status with that account or how long they were your client. How would you feel about standing before a judge stating that position or explaining why your agency took that position? Doubtful your agency would prevail.
So, what is the suggested approach? Communication plays a key role, and written communication is best! While contacting the client via phone is a nice personal touch (if you can talk with the client), you would want verbal communication to also be memorialized in writing back to the client.
The communication should be something such as:
Dear (insured),
I trust you have received notice from (XYZ Insurance Company) that they are non-renewing your (coverage/policy). If you have not received this notice, please contact our office as soon as possible so we can discuss the situation and options for you to consider.
Please be advised that we will make every effort to find replacement coverage if available. If we can find replacement coverage, it is possible that this coverage may not be at the same level (terms, conditions, pricing) as your current coverage. We will outline any differences for you.
We value your business and will work with you to try resolving this matter. If we do not successfully provide replacement coverage, we will notify you as soon as possible so you can pursue other options, including seeking advice from other insurance agencies. If you feel the need to contact other agencies now, we understand and respect your decision.
Thank you.
Any letter your firm decides to use in these situations should be reviewed and agreed to by executive management and legal counsel. The goal is to work with your client to find an alternative solution and provide the firm with the best protection possible should an alternate solution not be available.
Ultimately, this action could result in your agency losing this business, but you should feel confident you handled this matter the best way possible with a great deal of class and professionalism.