Attend and Grow Your Commercial Lines House Accounts

Some House Accounts Are More Equal Than Others

Commercial lines house accounts are traditionally profitable for the average agency. By their nature, these small premium insureds have no assigned producer, hence no commission is paid on them. Furthermore, they are allocated the absolute minimum of service. So, what’s the problem?

Growth and Disgust

Under-serviced house accounts are costly in terms of client dissatisfaction and lost revenues from underselling. The business stays on the books through sheer momentum, yet some insureds still wander off. Cost isn’t the sole reason; the real catalysts for departure are growth and disgust.

Growing commercial insureds require the valuable services of an interested professional. House accounts seldom enjoy this. They are usually renewed by mail, without change, except for small automatic increases. That’s where the disgust comes in. No personal contact and only a stranger to talk to at the agency, even though they’ve been insured there for years. Independent agencies tout service as the primary reason to buy from them, yet hidden in their files are orphan accounts yearning for a real connection. Too many offices simply write off any resulting departures as price-driven and nothing more. This assumption is often erroneous.

Furthermore, there is continued interest in small commercial business from both independents and exclusives. Plus, new agents love to cut their teeth on them. Too many of yesterday’s seemingly secure house accounts will become tomorrow’s dead files, unless they are paid some attention. Without it, adverse selection can rear its ugly head.

Analyze and Retain

All house accounts are equal, but as George Orwell noted in “Animal Farm,” some are more equal than others. So, make the effort to identify which enterprises are worthy of enhanced attention. Depending on an account’s specifics, a producer may need to get involved. But, it all begins with the commercial CSR. Reps initiate the exploration process by reviewing each account’s history and phoning or e-mailing the firm’s management. These basic actions are often enough to parse an account into three distinct time elements – the past, present, and future – as a prelude to retaining and uncovering any hidden gems.

The past… Explore when and how the account was originally acquired. Did a producer or a CSR sell it or was it part of an agency purchase? Gather historical numbers from your management system. Include commissions and premiums. Consider the firm’s payment and claims history. Also indicate how its renewals are delivered and the timing and tenor of its last review (if any).

The present… Identify the types of commercial policies written plus any personal lines for top executives. Also evaluate the company’s Web site, social media activities, staffing, and sales. These facts, and others, serve as benchmarks for projecting the firm’s future growth.

The future… Here’s where the real speculation begins. Consider the past and the present, the firm’s offline and online activities, and their stated growth plans. Combined, they help to determine how much future attention the business warrants. In some cases they are understated, as the Web and social media allows even tiny operations to expand well beyond their local confines. Growth plans also point towards additional coverage needs. Referrals are another important measure. Small accounts that provide a steady flow of leads require extra coddling.

The Bottom Line

The account analysis boils down to this: Is it worthwhile to involve a producer? When the answer is yes, don’t automatically decommission it as a house account. Instead, set up a face-to-face meeting and a tour of the firm’s premises. If the results warrant it, assign the account to an agent and compensate him for working it. One option is to pay a commission only on the additional premium generated. If the business remains the property of the house, make certain that it stays on your CSR’s radar and is periodically reviewed for producer assignment. If you don’t do this, you may lose a growing account with amazing potential.

Topics Commercial Lines Business Insurance