|
The Bottom Line Tip O' the Month is sponsored by ... | ||
|
Top Ten Reasons
Not to Automate Your Agency
by Ron Webber I have been telling agencies about their need to automate for the last 10 years and writing about for over 7 years. It is beginning to sound like a broken record. How many ways can I keep describing the benefits of automation in these articles? I get letters, phone calls and emails daily thanking me for pushing them over the edge to get started with automation or taking automation a little further than they have in the past. Some callers say, "I have always wanted to go paperless but I just didn't know where to start." Or, "I know I should be doing it, but I just didn't know how or where to start." It has been my pleasure to help jump-start many an agency into the twenty first century. Yet, I hear more negative than I do the positive side of automation. So I decided to write about those comments this month and let you decide which side of the fence you want to be on in the future. Here are the Top Ten Reasons not to automate. Letterman has got it made with that band of his to do drum rolls, snares drums and cymbals when he wants to make a point. So just imagine the music as you read the following list. Reason number 10, why you should not automate: I can complete a written application faster. Number 9: I can find all my files in the file drawer and I can look at everything in the file at one time, it is easier. Number 8: I don't understand computers and I don't want to learn. Number 7: My employees do not want to do it. Number 6: It costs a lot of money to automate and I don't have the money. Number 5: It takes a lot of time to get automation started and will increase my payroll cost. Number 4: You can't teach an old dog new tricks. Number 3: My customers do not trust computers. Number 2: I don't have time to do all the accounting. And the Number 1 reason why you should not automate your insurance agency is: I don't like change! How many times have I heard these comments in automation classes and in agencies? People in general, and Insurance agents in particular, resist change and they can come up with the lamest excuses for not automating. Generally, it is because they do not understand that automation is not complex and mystifying. If you take a common sense approach to automation and insert some good standard business practices it will work for anyone. There are no big hidden secrets or complex applications that needs to be applied. Automation will force you to do your job and fulfill your role as an agent properly. Applying automation correctly is what I teach agents to do, and the first thing I tell them is, remember: "do it once and do it right the first time." The real problem many times stems from the premise that the agency was doing it correctly before automating. If you had sloppy business practices in a manual world, and you do not change your habits when you automate, the process will eat you alive. Many times when I am in an agency, and the dress gets lifted up, I am amazed at the business practices I see. Below is just a partial list of what I have observed over the past 7 years: ·Checking accounts not being reconciled ·Applications and payments not being submitted to the companies on a timely basis. ·Cash drawers not being balanced daily. ·CSR's taking 2 hours to balance their individual cash daily. ·Bookkeepers taking 4 hours to process the business from 2 or 3 days ago. ·Agents and CSR's signing applications for the insured. ·Incomplete information on the Application. ·Letting the Insured sign and go without completing the application, because we have one on file from 6 months ago. ·Vehicles not being inspected, VIN numbers not being verified. ·Company statements not being reconciled. ·Follow up requests from companies being laid aside and no suspense set up or entered. ·Listing drivers as married when they are not. ·Not getting information or listing other drivers in the household. ·Not getting excluded drivers to sign exclusion forms or letting the insured sign the other party's name. ·Not sending renewal letters to all insureds. ·Loaning money to an insured to complete their down payment. (And it is always the agencies that are in financial distress to begin with that allow this practice, plus if they do not pay, it could be considered rebating, which is still illegal in most states) ·Not having a procedure manual for all employees to follow. ·Not having an employee polices and practices manual issued to employees. So when I hear those top ten reasons why Agents don't want to automate, I just started wondering why. Sooner than you think the insurance companies are going to force good business practices. Before long all companies are going to be uploading all activity in an agency. If an application is incomplete it will get rejected. A few years back when I was still in the agency business I was forced to make a decision about business practices. I was thrown into an environment of total disorder, where three insurance agencies were combined into one. Everything was in disarray and with a base of 10,000 customers something had to be done. I immediately issued a directive that no applications could be taken unless all blanks were completed and no longer could an insured call back with the missing information. There was a revolt in the ranks that this would not work. We would lose business or go out of business. Well, guess what happened, we didn't lose 2% of the customers. We explained that we could not write them without the complete information. We were better off without that 2% anyway and our overall book grew in one year to 12,000 active customers, a 20% increase of better quality business. Now let me tell you the Top Ten Reason TO Automate your agency. 1. To make you more productive. 2. To establish standard and consistent practices. 3. To gain the confidence of your customers, companies, employees and even the Department of Insurance. 4. To lower your E & O exposure. 5. To relieve the pressures of this paper intensive industry for yourself and your employees. 6. To get current and up to date management reports for review and evaluation of market trends. 7. To maintain good and accurate customer files that is up to date and current with the policy information. 8. Maintain control over your book of business and not be controlled by the direct bill company. 9. Helps you get control of your agency and let you work your business plan and follow your mission statement. 10. To be more profitable. Remember, the bottom line is "Automation equals Productivity and Profitability." If you have any suggestions of article on Automation in Insurance agencies, or comments please feel free to contact me.
Ron Webber
|
