Best Practices Quality Management – Part I

By | June 1, 2011

I have spent several months discussing how to define, train and implement, standards, procedures and workflows. Early in this series of posts one commenter on this blog asked me what was the value in going through this process. So over the next few posts I am going to discuss what Quality Management should look like, how to do it and the value.

Today’s post will be about the reasons an insurance agency should have and use a Quality Management program. Audits that are service and compliance related are defined as “a systematic check or assessment, especially of the efficiency or effectiveness of an organization or a process…”. Some reasons insurance agencies should audit are:

  • E & O prevention
  • Workflow/Procedure compliance
  • Workflow/Procedure effectiveness
  • Workload monitoring
  • Quality of customer service

Creating procedures and providing workflow training establishes a foundation upon which to build. The goal of quality management is not only to review compliance with agency guidelines, but to provide a benchmark where management can measure the impact (productivity gains or loss) workflows and automation have on operations.

Most people see quality management or auditing as a negative event. It is only negative for those not complying with established processes or if used as an intimidation tool by management. The staff needs to know from the beginning what is involved in the quality management process, its intention and the benefits. This will reduce the feeling the staff may have about that someone is monitoring their every move. The purpose of quality management is to eliminate obstacles facing the staff, to make sure workloads are fairly spread, and to improve the overall work environment.

Other expected results of the quality management process are noted below:

  1. Monitoring identifies any potential E&O exposures. E&O incidents are more often due to human error and an intentional act. The quality management audit will not find every incident, however, it is interesting how many incidents are found.
  2. Monitoring serves as a benchmark to measure continuous process improvements. Information is available from your agency management system to expand the usual financial measurements to include transaction processing. This means you will be able to track and compare the staff’s performance based on the number of activities processed.
  3. People learn in different ways. Monitoring will assist you in identifying weaknesses in your training program. You will also be able to identify those individuals that are having difficulty in learning or adhering to the processes.
  4. Statistical data gathered during the quality management recap will help you balance workloads. You will be able to anticipate heavy volumes. Workloads can easily be adjusted to accommodate increased activity. Management will be able to make staffing decisions based on fact.

I worked for a surplus lines insurance carrier early in my career. As a manager of a department, I was frequently in the office for awhile on Saturday mornings. So was the manager of the underwriting department. Each Saturday morning he went from desk to desk and took the stack of work and turned it upside-down. He then looked at the bottom five folders. I was not very experienced as a manager so I had no idea why he was doing this. Finally, I asked him why. He said that people put off those items that are problems and that they are always at the bottom of the stack. He would remove the files that he found to need critical attention, take them to his desk, and meet with their underwriter on Monday morning. His final statement to me was “Inspect what you expect.”

A quality management review should focus on the following significant areas.

  1. Transaction Audits benchmark the service provider’s adherence to the guidelines and reliance on the electronic file. Transaction audits also monitor workload distribution. Transaction audits are performed quarterly. Recaps are prepared and submitted to senior management.
  2. Workload (backlog) Audits measure the staff’s ability to stay current with routine transactions and comply with the workflow priorities. Each individual counts the number of transactions not processed within the agency guidelines. This review is used in conjunction with the statistical review. However, the workload review may be done independent of the statistical review if warranted. If your agency is doing frontend scanning, you may be able to secure much of your information by reviewing each individuals electronic inbox.
  3. Workflow Reviews measure the quality of your workflow implementation focusing on E&O control and effective use of automation. The client’s electronic file is reviewed as part of the workflow review. Workflow reviews are performed quarterly. The review of each individual’s review is shared with that individual.
  4. Correspondence Review is a review of each individual’s correspondence to client’s, prospects and insurance carriers. This is not a review of every piece of correspondence, but a review of the correspondence seen in the workflow review. Correspondence is often the first sign of some sort of problem that the staff member is experiencing. It is often a way to find positive comments someone is making about the staff member’s performance.

For quality management to be successful, the staff must know what is expected of them in the workflow and procedures for their specific position.

Watch for Part II. I will discuss what is involved in each step of the audit process. What questions do you have at this point or what works in your agency?

About Pat Alexander

Pat Alexander coaches insurance agencies in maximizing the use of their systems. Additionally, she works with them on how to integrate today’s social media into their firm’s plan. Pat may be contacted at pat@patalexander.com More from Pat Alexander

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