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AUTOMATE OR
EVAPORATE
During a recent holiday trip I dropped into a small
town agency just to say hello. We discussed old times, trends in the
insurance business and of course the Florida count and recount. I
answered a few questions about a printer problem they were having and
was in the office for about 30 minutes. During those 30 minutes,
customers, old and new, came and went making payments, renewing their
policies and purchasing insurance. This was a typical agency with
three full and one part time employee (what I refer to as the 3.5
employees with 1500 active customer agency). During the 30-minute
visit, I once again heard those infamous words, "where is the
file?" Three customer files were missing and the receipt book got
covered up and was lost for several minutes.submitted by Ron Webber I remember the days back in the 80's when I had hair and came home with headaches every night. I was frustrated with inefficient office practices. I was always concerned that everything that we took in would get processed and mailed to the right insurance company. There were many when times, when it did not get done correctly or on time. I knew there had to be a better way. I started looking into automation products and agencies that used them. For the most part, I found products on the market that I literally lusted to purchase, but my banker lusted after his money even more that I did the product. My first experience with automation was a little $19.95 zip code program that was customized to be a database for my customers, with their policy number, effective and expiration dates. It contained a mail merge so that I could run renewal letters. This was important because back in the old days, we represented mostly agency bill (or net) companies and had to handle all the renewals ourselves. Then I purchased a $400.00 receipting program and did away with the receipt books and stopped buying Tylenol. Things were looking up, but I still wanted a complete automation solution. I was still out in left field until, finally, someone came up with a product that I could afford and my life changed completely. Finally, I had an electronic file system that provided me with all the customer information. I was able to eliminate customer files and instead use a transactional filing system that was part of the software system that I had purchased for $4,000.00. This was nowhere near the $12,000-$18,000 price I had been quoted for other systems. Plus, it integrated with my comparative rating system and imported all the quote information. Now, this and other products can be leased for $150.00 per month and every agency can afford it. Now back to finding the file issue. No matter how good your staff and file clerk may be (and the file clerk might be yourself), no one is perfect. Files get misplaced, files get filed under the first name instead of the last name, and documents get dropped into the wrong file folder. Mainly papers stack up because there never seems to be time to get the work done. It seems that our priorities are many times misdirected. We spend all this time promoting our business, giving quotes, writing business and handling service requests. The point is that you can't operate an efficient insurance agency if you do not place emphasis on the back office operation. Many times I have encountered agencies trying to operate a 1500 client file office with a part time file clerk and depending on the sales and service staff to pick up the slack in filing and processing all the work that has to be completed. Whether you automate your agency or not (and I feel you must to survive) you must direct more effort to the back office work. If you don't you will surely not survive. I just attended an agent's state convention in Houston, TX and one of the keynote speakers was Peter Pelizza, the COO of Dairyland Insurance Companies. These were his words, "Automate or Evaporate." That is what I have been trying to get across in these articles for the past 6 years. But his words were much more powerful than mine. Several agents said to me afterwards, "that is what you have been trying to say for years, isn't it?" It is exactly what I have been saying! To accomplish the automation process, you must update your work flow and work procedures. You must keep your electronic files up to date daily. You must enter the information while the customer is in your office. You must upload the customer information and payments at point of sale, before the customer leaves your office. Go ahead, try to tell me that you do not have time to get it all done while the customer is there and I will show you successful and profitable agencies all over the country that get it done everyday and stay up to date. But, you are not going to get it done, at least not in the beginning with a part time file clerk. Most successful agencies have a two agent to one back office person ratio to make it work. In the beginning, it may require more than that. Many times, I have seen a ratio of one to one and they still did not get the work done on time. It has a lot to do with believing that it can be done and not settling for anything less. Here are some actual examples of successful automated insurance agencies. The first agency example I will call Agency "S" has 10 employees, 6 of whom are writing agents and 4 are non-writing employees all in one office. Agency "S" produces $8 million in very profitable business consisting of $1 million commercial, $7 million personal lines business (which is 90% non-standard specialty auto business). Agency "F" has 20 employees producing $13 million of which 90% is non-standard specialty auto business. Agency "F" has 14 writing agents in 6 offices. They operate with a wide area network and the central office has 6 non-writing staff employees. Both of these agencies use a combination of transactional filing of documents and scanning of declaration pages and other items that require frequent viewing. The common ingredient for success in the two agencies is keeping the electronic file up to date daily. All mail received each day is entered within 24 hours of its receipt. Since automation was implemented, both agencies have decreased the number of employees they had before automation. Think about the statement above, "Automate or Evaporate." They are not my words. Stop saying one day I am going to have to get around to it. Get on with your life and business plan and get a Round Tuit today. Until next month, keep automating those agencies; I really believe it is the only way that you are going to survive in the 21st Century. Remember, the bottom line is ...
"Automation equals
If you have any suggestions of article on Automation
in Insurance agencies, or comments please feel free to contact me.Productivity and Profitability."
Ron Webber
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