Questions Agents Should Ask Themselves and Insurers

Before Agreeing to and Planning of a Transfer of Business

 

Book rolls (a.k.a. transfers of business, TOBs) often start out with excitement and anticipation of greater profits; however, many end with disappointment as agency personnel and insureds learn the details and implications of moving insureds from old familiar companies to new unfamiliar companies.  Answering these questions and preparing a formal TOB agreement with an action plan for doing the work necessary to maintain the book of business will prevent the usual loss of 30% to 40% of an agency’s business.  Answers to these questions should be used to form a formal TOB agreement and create an action plan for agency and insurer personnel. 

 

1.      What types of policy forms are being used by our current insurance companies?  What types of policy forms are offered by the new company?  Do the forms and endorsements compare well?  If not, what is being lost and what is being gained?  Is it all mono-line or are some policies package policies?  What new coverages are being offered?  What services are expected by the insureds we will receive? 

2.      What market segments do we serve now?  Will the new company be very compatible with our market segments?  What new market segments will we be able to serve?

3.      Will our entire book of policies be rolled over without front-line underwriting?  Or will we be applying the new company’s new business or renewal underwriting guidelines?  Or will we use our present insurers’ guidelines?  Who can tell us specifically what our new business and renewal underwriting guidelines are to be for this rollover as we convert the policies from our current insurers to the new insurer(s)? 

a)      Are we waiving any of the new insurer(s) application’s underwriting questions or requirements for the roll over?  (i.e. whether or not a previous insurer paid for a loss that is listed on the roll over application, amounts paid for not-at-fault accidents)

b)      Who handles communicating this roll over agreement’s details to USAgencies’ marketing department so our computer systems’ reports are generated properly? 

4.      If rating tiers are used, will the book be rolled over to comparably priced rating tiers?  If underwriting tiers are used, will the book be rolled over to comparable eligibility tiers? 

5.      How will each risk’s information get transferred from the agency to the new insurer(s)?

a)      Do the agency’s files have enough information to satisfy the new insurer’s underwriting requirements?  What’s the earliest we can see how a random sampling of files would be transferred and what the results will be?

b)      Who will read the agency’s files, interpret the information and decide what coverages/endorsements are needed from the new insurer(s)? 

c)      How are we to allow for the extra time it takes for special forms to be sent, completed, and returned for states requiring countersigning?  (i.e. UM/UIM acceptance or rejection must be completed before issuance of the policy in some states) 

6.      When will the policies start renewing from old paper to new paper? 

a)      When is the earliest we can get started?  We try to process renewals __ days before their effective dates; therefore we have already missed the __(varies day to day)__ date. 

b)      What can we do for the insurer(s) to compensate for any loss of time if the information gets to an insurer late?

7.      Are both the agency and insurer customer service departments fully staffed?  How is work distributed, in other words: who handles which parts of the alphabet or do they use another system?

8.      How will the transition progress?  When and how will insureds be informed of the transition from the current company to the new insurer(s)? 

9.      At what frequency will the policies be rolled over to the new insurer?  Agency and insurer managers need to budget team members’ time so as to handle the extra work.  How many applications will need to be created on the first day and during the first month the insurer(s) begin servicing our book?  Who will be expected to create those applications?  Can the insurer’s programmers (IT department) prepare a way for our agency management system to be copied and pasted into the insurer’s database and then have policy renewals generated for our policyholders so no one has to fill out any paper or computer-based applications?  

10.     Will waiving of signatures be OK for the rollover policies?  Are our policies based in states that will recognize these as renewals and permit waiving of signatures on renewals? 

11.     Who will make sure our agency system can and will receive down loads containing the newly issued policy information from the new insurer(s)? 

12.     Will a new agency or policy number prefix code be issued for the policies rolling over? 

13.     Will a worksheet be created to track the receiving, processing, etc. of applications so we can measure our progress and make sure none are missed?  For how long should this be tracked?

14.     When can a TOB agreement be drafted by the insurer for the agency’s owner and manager(s) to consider?  When can a list of actions be created showing who will do which actions? 

© 2004 Profitable Underwriting - All rights reserved Webmaster www.TexasHillCountryGateway.com