Ultimate Account Manager School



Ultimate Account Manager SchoolModule OneThe DEFINITIVE GUIDE TO ACHIEVING WORLD-CLASS STATUS AS AN INSURANCE CSR? 2013 Agency Management Resource GroupAll Rights ReservedINTRODUCTIONWelcome to the Ultimate Account Manager? program. We are happy you have decided to join us on your journey to become extraordinary.This program is the result of many years working with independent insurance agencies all across the country which face the same challenge—to provide quality training for their customer service staff. This is not just an insurance course; it’s aimed at defining and providing true “value added” for our agency customers, increased productivity and efficiency for your agency, and greater job satisfaction for you.The customer service function in insurance is filled by people who have a variety of titles, including:CSR (Customer Service Representative)CSA (Customer Service Associate or Client Service Agent)Account ManagerAccount ExecutiveAccount AdministratorInsurance CounselorThroughout this program we will use the title Account Manager, because we believe that is the most accurate description for the job we are helping define. To truly manage a client’s account, you need skills and knowledge well beyond those of a typical customer service representative whose job mostly involves answering questions and responding to requests. We believe extraordinary Account Managers are those who provide wise and professional counsel to their clients, assist them in making difficult risk management decisions and advocate on their behalf with insurance companies. The term “CSR” just doesn’t seem to do the job justice, but your title doesn’t really matter – how you perform in that job is what will define you as a true Account Manager.A rose, by any other name, would smell as sweet.-William Shakespeare AGENDAThis module will focus on the following aspects of customer service management. This is one of three modules in the Ultimate Account Manager program, but each is meant to stand alone.Chapter 1 - Characteristics of the Ultimate Service AssociateThe customer service experiencePersonality tests and characteristicsThe customer service triadChapter 2 - The Insurance MarketplaceMarket cyclesCarrier relationshipsThe marketplace todayIntroduction to underwritingStructure of the independent agencyChapter 3 - Desk Management and Risk ManagementSuccessful desk management and workflowThe Zero Backlog? systemIntroduction to Risk ManagementOur goal is to provide you with some practical tools, resources, and tips you can use on your job immediately! You can use the material in this workbook whether you are self-studying this program, participating in an online course or attending an on-site class at your office.Chapter 1-Characteristics of the Ultimate Service AssociateUpon completing this chapter, you will:Evaluate the customer service experience from the client’s point of viewRecognize the characteristics that make a person an outstanding service associateDescribe the customer service triad: skills, knowledge and commitmentThe Customer Service ExperienceJust like people have a certain set of characteristics that would make them successful at sales, there are also specific traits that a service person must possess to excel at their job. There are thousands of people employed in the service industry, and you probably know that not all of them are created equal!Think about the last time you really enjoyed eating in a restaurant. What are the things that made you feel that it was a positive experience? Enter those below.RESTAURANT EXPERIENCE________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________We find it interesting that most people put “price” or “cost” pretty low on their list, yet in insurance we convince ourselves that price is all that matters. It’s a good thing for us that is not true, or most independent agencies would have gone out of business a long time ago! Although we can compete on price from time to time, the reality is the independent agency system of distribution is not the most inexpensive. Therefore, it’s critical that we continue to add value to the transaction and ensure the client does not view insurance as a commodity, where price really is the only differentiating factor.How can we translate this restaurant experience into our world, the independent insurance agency? For example, if you said “the restaurant was clean”, what would be the equivalent for our customers? Or “the food arrived hot and just like I ordered it”? INSURANCE EXPERIENCE________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________For the customers of an independent insurance agency, the customer service experience is no less important than it is for you when you receive service in a store, restaurant or other business. In fact, it may be even more crucial to our success, since insurance isn’t like consumer goods – no one is ever really happy to interact with their insurance representative. The goal of the service associate is to create “wow” moments for our customers; and you don’t get a “wow” unless you deliver to them something they didn’t expect and therefore could not have requested.Now think about the person who waited on you. What are the specific skills, abilities and knowledge that are necessary for them to perform their job at the highest level? Do you think these qualities come naturally or do you think they received some kind of training or education in order to behave this way?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Are there any of these characteristics you think are essential to being a great Account Manager? Do you think you possess any or all of these attributes?The Personality Test ApproachUnfortunately, there isn’t a fool-proof way to test or measure whether or not you have the combination of personality traits that will lend itself to performing the work of an Account Manager at a very high level. However, standard personality tests, such as Caliper, DISC and Meyers-Briggs, are extremely reliable in terms of identifying your personality style, and we would encourage you to complete such a test (many are available online for no charge). In addition, we have found the following characteristics essential to be an outstanding Account Manager. As you read through this list, place a check mark if you feel you already have that attribute or if you think you could use some work in that area. This will help you build your own professional development plan.CHARACTERISTICHAVE IT NEED WORKSense of urgency – ability to recognize, manage and be motivated to meet deadlines – no matter what. This is critical in insurance.True love of people – also called nurturing and caringEmpathy – ability to see other peoples’ point of view, not sympathyConfidence, self-esteem and assertiveness (not aggression)Solution-orientation, creativity and problem solving ability – it takes KNOWLEDGE to do thisAccountability / responsibility / sense of ownership of any problemTeam player – and in insurance, you play on lots of teams!Critical thinker – working with complex systems, processes and documentsCuriosity – it may have killed the cat, but it’s your biggest assetAttention to detail – quality and accuracy - precisionAbility to see the big picture – a global view of the insurance industryEnergyDiscipline and a strong work ethicSelf-awareness and emotional intelligenceUnselfishnessManagement of multiple and shifting prioritiesResilienceOther Necessary Skills and AbilitiesPeople who have the highest concentration of these skills become leaders almost in spite of themselves. All of us have some combination / concentration of these gifts in varying degrees. These are the most critical to world-class success in our industry. Once again, there’s no litmus test to identify the degree to which you possess these skills, but we believe you can perform a self-assessment that will be fairly accurate – as long as you’re honest with yourself.The great thing about skill is that it can be built. Many of these ingredients in your success will be discussed throughout this program. The Customer Service Success TriadPersonality tests, while reliable and helpful, don’t reveal all of the necessary attributes of the Ultimate Account Manager. We believe there are other skills and abilities that will contribute to your success. Some of them are shown above, but we have distilled some of this information down to what we call the Customer Service Success Triad.KNOWLEDGESKILLSSUCCESSATTITUDE IS EVERYTHING!ATTITUDESKILLKNOWLEDGEATTITUDETechnology – agency management system, Microsoft, keyboarding, carrier systems, Internet, social mediaIndustryTeam – your agency, your carriers, your producers and co-workersCommunication – writing, reading, analysis, explanation, verbal, language, active listening, discretionCoverageClientBusiness – math, financeCustomer’s business / issuesCareerAgain, the great thing about skills and knowledge is that they can be acquired. Attitude, on the other hand, is what you make it. If you treat your position as just a job, you will likely never achieve the level of satisfaction or fulfillment that will help get you through the trying times and stressful situations that are a part of working in insurance. If it’s a career, it’s something you have decided to invest in and you will pursue every opportunity to upgrade your skills and knowledge over time. It’s up to you to manage your career. Be proactive and don’t wait until someone points out in a performance review that you have a skill or knowledge gap – you probably knew it before they brought it up.Managing Your CareerExtraordinary careers don’t just happen – not in insurance or any other endeavor. They are the result of meticulous planning, great effort and a sense of purpose. Just as you would develop a strategic plan if you were going to open a business, you should have a carefully thought-out plan for your insurance career.Step One – VisionCareer planning starts with the answer to a simple question – “why are you here”? What is it you wish to accomplish in your life? Once you have a clear vision of where you’re heading, you can use it as a touchstone when the future is unclear or an unanticipated boulder rolls lands in your path. Your vision should be more than just your career – it should include planning for family, education, spirituality, recreation, finances, fitness and just about every aspect of your life. Your personal vision:__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Step Two – Evaluate Your Strengths and ChallengesIn order to develop your skills and knowledge, you need to start with a realistic view of where you are currently. The previous sections of this chapter should have helped you understand the areas in which you excel and any that need further development. Many of these are what people refer to as “soft skills”, such as listening, being a team player, etc. Unfortunately, there’s really nothing “soft” about those skills; in fact, they can be very difficult to develop. However, we like to think of them as life skills versus insurance skills. They will serve you well no matter what the future holds.Insurance-specific skills and knowledge should be a part of your personal career plan. For example, you may have listed negotiating skills as one of your challenge areas. However, you may be pretty good at negotiating with some people (your spouse or significant other, your children, etc.) but not very skilled in a business setting. Your specific challenge could be “negotiating with underwriters”. Or perhaps you have great knowledge of certain types of insurance, but you feel you need additional education in others.Your life skill strengths (e.g. good listener, comfortable public speaker):______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Your life skill challenges (e.g. poor time management, not a team player):______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Your insurance-specific strengths (expert in commercial property, completed AINS designation)______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Your insurance-specific challenges (need to complete ARM designation, learn about cyber liability)______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Step Three – Develop Your Action PlanThe final step is to put your plan into action. You need to find resources to help you develop those challenges you have identified as being important for your career success. For some of the generic or life skills, you might take a class a community college or find a program you can take online. Talk with your manager or supervisor and tell them how you believe training in these areas will improve your ability to help the agency’s clients. Remember that your personal goals should also align with the agency’s objectives.For your insurance-specific goals, you might reach out to one of your underwriters whom you believe is expert in a certain area, or to a colleague. There are several organizations that sponsor technical insurance education and credentials, such as your state agent’s association, or one of the following:The Institutes – sponsor a variety of professional designations such as CPCU, ARM, AAI and AINS. International Risk Management Institute (IRMI) – sponsor certifications in certain industries such as construction (CRIS) and agribusiness (AFIS) and in lines of business such as management liability (MLIS). Independent Insurance Agents and Brokers of America (IIABA) – if your agency is a member of the state affiliate of IIABA, you also belong to IIABA, often referred to as “The Big I”. They sponsor programs such as the Accredited Customer Service Representative (ACSR) designation, in cooperation with The Institutes. We know that in order to maintain your insurance license you have to complete continuing education annually or biennially. Why not kill two birds with one stone? Pursue education in a field that will help you better serve your agency and your clients, and you will likely have more continuing education credits that you will ever need!Chapter 2 – The Insurance MarketplaceUpon completing this chapter, you will:Describe insurance market cycles and their importance in managing a client’s accountExplain the current status of the insurance marketplace to customers and othersDescribe the basics of underwriting, including what role the underwriter plays, what their information needs are, and why accurate underwriting information is important for client account managementUnderstand the organizational structure of the modern independent insurance agencyInsurance Market CyclesWhen the insurance market is described as “hard” it means that prices are rising and the availability of insurance is restricted, especially in certain areas or lines of business. When the market is “soft”, prices are falling and insurance is readily available. This is sometimes referred to as cash flow underwriting, because insurers are happy to see premium dollars coming in the door, even at a declining rate for each individual account.How would you describe the marketplace for insurance at this time?______________________________________________________________________________Many people spend a great deal of time trying to predict when the market will turn from soft to hard, and vice-versa. There’s little point to such an exercise. The market is the market, and it’s difficult to explain to consumers under either circumstance why it works the way it does. In any other business, if prices were “inadequate” the business would go under. In insurance, it’s possible to stay afloat using investment income. When we experience several years in which huge disasters do not take place, as has been the case recently, insurers are able to accumulate assets and are less inclined to raise premiums. That can change quickly, however, contributing to the cyclical nature of insurance.The Evolution of Carrier MarketsEvery agency decides which insurance companies with which to do business. While there are over 3,000 insurance companies in the United States, the typical independent agency represents between 10 and 20 national insurance companies and an additional 5 to 10 regional or specialty carriers. Standard or Contract CarriersIn determining which agents a company wishes to have represent it, the following factors are taken into consideration:The size and historical growth of the agencyThe ownership and management of the agencyThe number of active salespeopleWhat other factors do you think would encourage an insurer to do business with a particular agency?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Likewise, when an agency considers doing business with a particular insurance company, there are some important factors to consider:Financial strengthClaim-paying abilityWhat other factors do you think the agency considers when deciding to do business with a particular insurance company?_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________Keeping an insurance company happy involves fulfilling the promises that were made when first agreeing to do business with that company. That usually includes a commitment to place a certain amount of business with the company annually. It is equally important to the agency that the company meets or exceeds certain expectations of service. An annual review of the services received from the insurance company should include:Turnaround time on submissionsCompetitiveness of pricingRange of product offerings / contract termsFlexibility in applying underwriting guidelinesProcessing time on mid-term changesAutomation capabilitiesClaim serviceOf course, for our clients, that last one is huge. We must always remember that it is when the insurer is called upon to deliver on the promises they have made they will be scrutinized by the ultimate buyer—the insurance consumer. Agency staff members should constantly monitor the level of claim service being provided to its customers and be ready to intervene if things are not going well, without going too far and attempting to do the company’s job.If you had to give a grade to the insurance companies with whom you currently do business, would they get high or low marks? What objective standards would you use to make that decision?28022571906 Surplus Lines, Non-standard carriers and MGAsNot all business in an independent agency is placed with standard or contract carriers. Some clients have unusually difficult exposures, a bad loss history, or the need for specialized coverage. When the market is hard, standard carriers tend to severely restrict the business they are willing to accept. Most agencies also represent a number of surplus lines brokers (also called wholesalers) and managing general agents (MGAs) who are able to access insurers that do not compete directly with standard carriers. Some things to look out for when dealing with a non-standard placement are:Non-standard forms and endorsements (proprietary forms created by the insurer)Non-admitted status of the insurer (generally not subject to the state’s guarantee fund should they become insolvent)Additional fees and taxes charged to the insuredWhat other issues do you think are important when placing business with a surplus lines broker or MGA?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________When working with the non-standard market, it’s important to keep in mind the various additional regulations and rules that apply. For example, every state has an organization that regulates the surplus lines business that is transacted in the state. What is the name of that organization in your state?Some of the business placed through the surplus lines market goes to non-admitted insurers. Although they do not have a certificate of authority to operate in the state, they are authorized to do so by the department of insurance. In most states, it is not permissible to “export” business out of the admitted market simply to get better coverage or even a better price. Generally speaking, if there is an admitted insurer that will write the coverage, they must be allowed to do so, even if they are unwilling to match the terms and conditions that could be obtained in the non-admitted market. To the extent you are responsible for placing the client’s business with a particular insurer, it is important you understand these laws and regulations.In addition to the state agency, there is a national organization to which most surplus lines insurers and brokers belong – the National Association of Professional Surplus Lines Offices, or NAPSLO. A great deal of information is available from NAPSLO with respect to surplus lines insurance.ReinsurersYes, it’s true. Even insurance companies buy insurance! Reinsurance is a fascinating part of the insurance industry, and you should have a basic understanding of what its role is, how it works, and how it impacts your customers. One of the first steps in understanding reinsurance is to become familiar with its unique vocabulary.A reinsurer is an insurance organization whose only customers are other insurers, called primary or ceding carriers. In order to expand their business, some primary companies use reinsurance to transfer a part of their risk to the reinsurer. One specific example is catastrophe reinsurance. Insurers who write property insurance in certain areas of the country that are prone to hurricanes may transfer losses above a certain amount to the reinsurer in exchange for part of the premium. Since their risk has been reduced, regulators may allow them to continue to write business in that area without fear they could become insolvent following a major disaster.When an insurer and a reinsurer agree in advance to share a portion of losses arising out of an entire book of business, this agreement is known as treaty reinsurance. The treaty is essentially an insurance policy between the two insurers that spells out the circumstances under which risks will be transferred, the premium, and how losses will be allocated between the two. Most treaty reinsurance is arranged in one of two ways:Pro Rata (or proportional)Excess of LossUnder a pro rata reinsurance contract, the primary carrier determines the amount of risk it wishes to keep “in house”. This is its retention. A common retention level for a primary carrier is 20%.EXAMPLE with 20% retention:Primary(20%)Reinsurer(80%) Policy Limit$1,000,000$200,000$800,000Premium160,000 32,000 128,000Loss120,00024,00096,000Under an excess of loss reinsurance arrangement, the primary insurer and reinsurer agree on an attachment point. The attachment point can apply on a per-risk or per-occurrence basis. The premium is negotiated between the reinsurer and primary carrier, and is not a straight percentage as it is with a pro rata agreement.EXAMPLE with $100,000 attachment point:PrimaryReinsurer Policy Limit$1,000,000$100,000$900,000Premium160,000 120,000 40,000Loss120,000100,00020,000Facultative reinsurance is an arrangement between an insurer and reinsurer that applies only to a single risk. One example of the use of facultative reinsurance was the Twin Towers in New York City that were destroyed on September 11, 2001. The value of the structures was so high, no single insurance company would be willing (or allowed by regulators) to take on the risk. So the primary insurer approaches the reinsurance market and negotiates insurance above a certain level. When facultative reinsurance (simply called “fac”) is placed, the cost is usually passed directly from the primary carrier to the insured, and this would appear on the client’s declarations page.The report of all transactions under a reinsurance agreement that is prepared by the primary carrier is called the bordereau – a French term meaning a list of accounts or documents. Many reinsurers are located in Europe.To make things even more complicated, reinsurers also purchase reinsurance from other reinsurers! This transaction is called a retrocession.So, what does all of this mean to your clients? In most cases, the answer is “not a whole lot”. Reinsurance is simply a financial arrangement between two insurance companies to share losses. Your client seldom would have a direct, contractual arrangement with a reinsurer. The presence or absence of reinsurance, however, can have an impact on how a primary carrier views a submission and how much it charges, so your knowledge of reinsurance basics can help you when dealing with your underwriters, especially on large or complex accounts.The Marketplace TodayThe insurance industry is greatly impacted by disasters, both natural and man-made. As such, the events of 9/11, Hurricane Katrina, “Superstorm” Sandy and other catastrophic losses have taken their toll on the industry’s cash reserves. Luckily, the last few years have also produced underwriting profits that have enabled carriers to discharge their obligations and still continue to grow their businesses.Some of the bigger issues that continue to challenge the industry are:The continuing threat of terrorist activityA weak economy and slow recoveryThe “wind versus water” debate – when does the property insurance end and the flood insurance begin?The future of the National Flood Insurance ProgramLitigation and tort reformHealth care reformFederal regulation of insurance“Too big to fail” – a concept that grew out of the 2006 economic collapse and subsequent “bail out” of organizations such as AIG (American International Group)Insurance is a vital part of the U. S. economy, important not just because of the size of the industry, but the fact that virtually nothing would be accomplished if individuals and businesses had to face their risks without benefit of insurance. Buildings would not be built, trucks would not transport goods and retailers would not sell the products of manufacturers without the ability to transfer all or part of the risk to an insurer.Insurers need to evolve and face the changing nature of risks in the future in order to continue to fill their critical role in the worldwide economy.Introduction to UnderwritingThe insurance business is all about relationships, and one of the most important relationships you will have is with your company underwriter. Understanding what makes an underwriter “tick” isn’t really difficult. You just need to keep in mind a few things.Insurance companies perform two core functions: underwriting risks and paying claims. While you may not be actively involved in the claims process as an Account Manager, hardly a day will go by in which you do not interact with at least one underwriter.The underwriter’s responsibility is to create a growing, profitable book of business for the insurer. In order to do that, they have to evaluate each account and determine if it fits the insurer’s “appetite” or type of business being pursued. Next, they have to determine if the account is above-average, average or below-average for that class of business. Below-average business can still be written, but it must be balanced with enough above-average business so the company can achieve its financial objectives. Finally, the underwriter must determine the pricing that will accomplish the company’s profitability targets.One important tenet of underwriting is to avoid something called adverse selection. That is the tendency of people with a higher-than-average risk profile to purchase insurance to a higher degree than do those with normal or below-average risk. Think about flood insurance and who is most motivated to purchase it. That is a classic case of adverse selection.When you think about it, the goals of the company underwriter are really no different than those of an independent agency. We wish to grow our agencies by writing new accounts that are profitable to us and our carrier partners and we want to avoid writing insurance for people whose account will cost more to handle than it generates in revenue. The Structure of the Independent AgencyIn order to be successful in the insurance business, it’s important to choose partners with whom you share a basic business philosophy, values, and goals. We have spent a great deal of time discussing how to choose a carrier, how to evaluate their performance, and what the underwriting process looks like. Now we’ll turn to your own organization. Just as the insurance company has two core functions, independent agencies only have two as well, sales and service.Agencies focused on sales are GROWTH agencies.Agencies focused on service are MAINTENANCE agencies.Agencies without focus are in trouble!Every other position in the agency exists to support those two departments. Some agencies have a very clear sales culture. Others lean toward the service side. Some agencies are very entrepreneurial, while others tend to be dominated by legalistic issues. Ultimately, to be successful, every agency must see itself and be a sales organization and every person must see their position as having more than a little to do with selling.What kinds of activities or results would indicate to you that yours is a sales organization?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________What kinds of activities or results would indicate to you that yours is a service organization?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Chapter 3—Desk Management and Risk ManagementUpon completing this chapter, you will:Recognize the fundamentals of successful desk management and how that relates to extraordinary customer serviceExplain the basics of the risk management process, including exposure identification and alternatives to traditional insurance arrangementsDo you remember your first couple of days in the insurance business? If it was like most, you probably didn’t understand much of what was being said. Unlike producers, most Account Managers didn’t get the benefit of attending a formalized training program. Training for an Account Manager position consists primarily of “on-the-job-training” which is, in reality, little or no training at all. We call this “Learning in the Osmosis Chair”.The Osmosis ChairYou are welcomed to the firm, shown where the restrooms and lunch area are located and then taken to your new desk or cubicle, where you are expected to sit in the Osmosis Chair and absorb wisdom and knowledge up through your backside. OK, we exaggerate a little, but really not that much. The Components of Successful Desk ManagementOf all the skills you need to be the Ultimate Account Manager, the most important is your ability to manager your time, prioritize your work and keep everything moving smoothly – in other words, managing your desk. Yet this is the one thing you were probably never taught. Well, that stops NOW!The components of successful desk and account management consist of:Differentiating critical from non-critical tasksTaming the email dragonManaging renewals and expirationsSuspense / follow-upZero Backlog? Desk Management SystemWe consider this our gift to you and service associates everywhere. This is a simple system that will eliminate the seemingly intractable backlog that tends to accrue on an Account Manager’s desk – and one you may have had the very first day you started at the agency, through absolutely no fault of your own.Chronic backlog has been institutionalized in the insurance agency business. Some people are actually told that they need to get used to it, because it is a fact of life and will never change. To that we simply say “hogwash”. Backlog is unacceptable, unfair, increases the potential of E&O claims and represents poor customer service – period. We define backlog as any item, received in the agency and not completed within 3 to 5 working days. We know…breathe. Once you fall behind and have too many critical priorities to handle, catching up is too difficult or impossible. You begin to feel overwhelmed by the sheer volume of work that needs to be completed and even the most confident and competent person will feel like a failure. It’s not your fault! If you knew a better way, you would have already implemented it. Thus, our gift to you is a system that will remove the psychological barriers created by the endless stack of “stuff”, allowing you to emerge as a professional Account Manager and not just a processor of transactions.Step One – Understand the Difference between “Critical” and “Workflow”Like most things in business, the 80/20 rule applies. Some transactions are critical by their very nature and must be completed within 24 hours. Examples of critical items are returning phone calls, adding or increasing coverage on an insured’s account, claims, certain certificates of insurance and some cancellations. This is the 20%, despite what you might be thinking.An item that is critical remains on your desk or in your electronic inbox until it is completed. It is never filed or put into a workflow folder (discussed in the next section), because it will be processed within 24 hours. Other items are considered workflow and are to be processed within the acceptable time frame of three to five working days. The key to managing the workflow is to sort the items into categories and place them in a folder (paper or electronic) with the oldest item on top. Thus, when you go to work the items in the folder, you will always start with the one that has been waiting the longest, regardless how long it will take you to complete that task.Think of this like an inventory management system. You have two choices: LIFO or FIFO. LIFO stands for Last In, First Out. FIFO, on the other hand, stands for First In, First Out – in other words, first come, first served. One of the problems with the way we work today is that when we find something in the “stack of stuff” that will only take a short period of time to process, we pull it out and do it immediately. It gives us a sense of accomplishment and satisfaction. However, there are other things in the stack that have been there longer, and because they will take more time to complete, they get pushed aside. At some point everything needs to be completed, but when an item has been set aside time and time again, it becomes critical, not because of the nature of the task, but simply because it has remained unprocessed too long. We call this “contrived criticality”.You should also note that “critical” is not based on who is the producer or even the size of the account. It’s simply based on what needs to be done and whether or not a delay could adversely affect the client.Step Two – Create the Workflow FoldersOnce you are comfortable determining between critical items and workflow, you are ready to set up your workflow folders. Keep in mind these can be either paper or electronic, depending on whether or not you work in a paperless environment.One of the biggest challenges on an Account Manager’s desk is the constant shifting from one type of task to another. We start the day checking a policy, get interrupted, go back and finish it; then we process an endorsement or work on an upcoming renewal, all the while handling critical items and dealing with internal disruptions. The truth is, there are only so many categories of incoming work, so it’s easy to “batch” these items together. When work is organized in this way, and remembering that we always work the oldest item first, efficiency is improved. For example, if we place all of the endorsements to process in one folder, in date order, and process one after another rather than bouncing back and forth between different types of transactions, speed and accuracy are improved.Folders are set up by transaction type, not by client. In the past we have attempted to batch work based on a particular account, especially one that is very active. The big block of time required to process a number of items on that one account never seems to materialize and backlog is created.Not coincidentally there are five categories, just as there are five days in the work week. It really doesn’t matter which folder you designate to be worked on which day of the week, what’s important is that you place every non-critical item in a folder when it is received, always at the end of the line.If you still receive items in paper form, you will want to set up the folders using color file folders as shown below. Again, there’s no magic to the colors themselves, it’s just a quick way to identify the folder that contains a certain category of work. Workflow folders will remain on your desk, in full view. If you receive items electronically, you can set up your folders in Outlook? or in your document management or agency management system.Red / Monday:New Business, quotes to Check, rating, underwriting and follow-ups - in date received orderQuotes that have come in, typically related to new business marketing, remarketing and renewal that need to be checked. After checking, the quote will go to the paper new or renewal marketing file (in inception date order).Note: This may constitute a change from “stockpiling” quotes by Insured, waiting until all have beenreceived (each should be checked as it is received.)Purple / Tuesday:Requests - in date received order Requests from Carriers to notify Insured re: underwriting issues, loss control, etc.Requests from Insureds to make a change (except for increases or additions, which are critical)Request to quote, such as, from Insureds to quote additional lines of coverageAnything informational where file needs to be updated; often a wide variation.Green / Wednesday:Policies to check & process – in inception date order New policiesRenewal policiesNote: This is an exception to the rule of “in order of date received”Yellow / Thursday:Endorsements / Audits - in date received orderEndorsements received from Carriers to checkAudits to checkFinal cancellation/non-renewal endorsements to checkBlue / Friday: Renewals / Remarket / Ex-lists - in date orderRenewal-related requests and expiration list if printedNote: Friday is a quiet day in most offices, so this is a good day to work on renewals or policies to check. Sample Outlook? file organizationCreate daily folder under Inbox01 – Red – New Business02 – Purple – Requests03 – Green – Policies to check04 – Yellow – Endorsements05 – Blue - Renewals Under New Business and Renewals, create folders for each active account to store Marketing information01 – Red – New Biz10.01 Nike11/01 Microsoft05 – Blue – Renewals08/01 AMRG09/01 ABC Company09/01 XYZ CompanyAttach to Customer file when completed and delete from OutlookReset workflow folders so the oldest item is on the top. The system will automatically put the newest item at the top – you need to “click” on the date to reverse.There is one caveat about using Outlook? to manage workflow, versus the agency management system or other document management software. In most offices, an individual’s Outlook? is only visible to them or management, creating a problem when someone else works the desk. You will need to make sure others in your office have access to your email folders if you are out of the office for vacation, sick time, etc.Step Three – Eliminate the Current BacklogVery few people get the opportunity to implement this system starting from scratch with a clean desk. Typically, there is already backlog on the desk. If so, once you have set up your folders, you will have to “unbundle” your desk and place every item in a folder (by definition, if it’s been sitting on your desk a while, it must be workflow and not a true, critical item). Most of the current backlog will end up at the top of the stack and will be processed ahead of newly arriving items, as it should be.Every single outstanding item needs to be put into the new system – email older than today’s date, old suspenses, and any item that has been unprocessed for more than five working days. Be sure not to get caught up in the “oh, I’m going to just finish this one critical item” way of thinking – that’s what got you to this point in the first place. If it was really critical, it wouldn’t still be on your desk. Remember there are only two broad categories of work; items that are critical by their very nature (i.e., if not processed within 24 hours, the client could suffer an uncovered loss, be inadequately covered in the event of a loss, be thrown off a job site, be unable to close escrow on a new building, etc.). Step Four – Day to Day Desk ManagementThis simple system only works if it is followed to the letter, without exception. Discipline is required to work the system and even out workflow without re-prioritizing items. It may seem too simple to be true, but simplicity is the key to success.As items are received during the day, you should quickly scan them to determine if they are critical or workflow. The goal of this system is that no item will ever be touched more than twice – once when it is first received and then when it is processed. It does not matter how an incoming items arrives in the office, the only thing that separates critical from workflow is the nature of the transaction. Thus, phone calls are not more important than mail and email is not more important than anything else.If today is the day you have designated to work your Endorsement folder, you need to have a time of day when you work your folder. You open it up, work the item that is on top (oldest) and keep going until either the folder is empty or you must stop processing those items and move on to other things. You must touch that days’ folder, even if it means only removing one item. Once an item is out of the folder, it must be processed that day, no matter how long that takes. There is no re-foldering any item. If your folder for that day is empty, you can choose to work in the next days’ folder or the one that contains the most or oldest items, your choice.Any suspense item that pops up must be handled or set ahead. If too many are being set ahead, you have probably set the suspense date too short. It is a good idea to set a suspense for the day of the week when you will be processing similar items. For example, when you request an endorsement from an insurer, set the suspense for the day of the week when you work your Endorsement workflow folder, don’t just let it default to 30 or 60 days.Email should be checked no more than four times each day – twice in the morning and twice in the afternoon. This may be the most difficult change of all for you, but think about it this way…there is no category called “really, really critical”, so if you look at email a few times a day, rather than all day long, and categorize it properly, there’s nothing that won’t get addressed. We have come to treat anything that is received in email as critical, and that will undermine your efforts to use the workflow system.At the end of each day, your paper or electronic in-box should be empty, with the exception of a critical item received late in the day that will be processed first thing in the morning. This is especially true for the email in-box. It was never meant to be used as a suspense system, so there should never be any item older than today’s date.Managing a desk, regardless of the size of accounts, doesn’t have to be chaotic. When workflow is organized in this way, productivity is increased and you will have the time you need to provide the high-level service today’s client expects and deserves. Following the Zero Backlog? Desk Management System enables work to be handled in a timely manner, promotes a feeling of control and allows the Account Manager to respond to needs of clients, managers and producers.Introduction to Risk ManagementIndependent insurance agents are at their best when they assist their clients in making sound risk management decisions. In order to do so, you need to have a fundamental understanding of the risk management process. The steps in the risk management process are displayed below.The most critical step in the process is the first: identifying loss exposures. You really can’t manage a loss exposure if you don’t know it exists. There are several ways to help a client identify possible losses:Interviews and physical inspectionsChecklistsFinancial statement analysisReview of past lossesThere is no single right way, rather the more methods you use, the better the result. Once loss exposures are identified, the next step is to analyze or measure them. In insurance terms this means looking at them from a frequency (how many losses) and severity (how much will they cost) perspective. Since we are attempting to predict losses in the future, this is merely an educated assessment based on such things as building and other property values, loss histories, litigation trends and other factors.Loss exposures can generally be categorized as:Property loss exposuresLiability loss exposuresFinancial loss exposuresHuman loss exposuresOnce you have found an item subject to loss, you should consider the possible causes of a loss (fire, earthquake, being sued, premature death, etc.) and the financial consequences of the loss.Once the exposures have been evaluated, it is time to choose a risk management method that best fits the situation based on the client’s risk tolerance. Following are the tools in the risk manager’s toolbox:Avoidance – meaning eliminating a loss exposure (selling a building, leasing a piece of equipment) or never creating one in the first place (not taking a job or manufacturing a product). While it is effective in eliminating loss exposures completely, this method is often not practical.Risk Control – has an impact on frequency or severity of losses that do take place. Loss prevention techniques, like burglar alarms, reduce the likelihood of a loss. Loss reduction techniques, like air bags in vehicles, reduce the dollar amount of losses.Non-insurance Transfer – takes place when a client signs a contract whereby another party will assume responsibility for losses that take place and reimburse or indemnify the client for the lossInsurance – involves transfer of specific risk to an insurance companyRetention – is a loss that is borne by the insured, either in whole or in part. A deductible is a form of partial retention. There are two ways retention can be used as a risk management method: actively or passively. It is employed actively when the insured is aware of the loss exposure and consciously decides to retain the amount of the loss. When used passively, it means a loss exposure was not identified and therefore it could not be avoided, controlled, transferred to others or insured. That often results in an E&O claim against the agency.Although we have listed them in a certain order, it is important to understand that using sound risk management principals means using insurance as the tool of last resort. What cannot be avoided, controlled, retained or transferred to others should be insured. That is when insurance costs are lowest and coverage is readily available.Implementation, the final step in the risk management process, simply means:Eliminating the exposure if avoidance is chosenImplementing a loss reduction or loss prevention techniqueDeveloping contracts to transfer exposures to othersPurchasing insuranceSetting up funding for any retained lossesHelping your clients management the various risks they face, versus simply selling them insurance policies they may already be purchasing from another agent, is the way to be a trusted advisor rather than an intermediary between them and the insurance company. It’s how we add value and prevent being viewed as a commodity. ................
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