Insurance Journal Forums

Is it possible for all to agree that the billing is between the company and the client, and that whenever possible the client should call the company billing line directly, or go online to obtain billing info and make payments when possible. Billing is the number one waster of time in our agency. I love EFT, mortgagee bill, and pay in full.

The remainder of the service and interaction with the client is mostly fun and solving problems for them is what we are paid to do. I do not feel like I am paid to babysit poor pay clients, and or remind them to pay their bill.

Is it possible for all to agree that the billing is between the company and the client, and that whenever possible the client should call the company billing line directly, or go online to obtain billing info and make payments when possible. Billing is the number one waster of time in our agency. I love EFT, mortgagee bill, and pay in full.

The remainder of the service and interaction with the client is mostly fun and solving problems for them is what we are paid to do. I do not feel like I am paid to babysit poor pay clients, and or remind them to pay their bill.

Yep.

agreed. About 99% of all my accounts are on full pay, or EFT monthly. So I do not experience this type of service work. If a monthly direct bill client does not pay the monthly bill, that is their problem. Mastercard, Discover, AT&T, the cable company, electric company: you name it. These companies do not call me to remind me to pay my bills.

It never ceases to amaze me the questions clients call to ask.
From solicitation letters of auto warranty's to how much does it cost to
register a new vehicle. I'm a relatively small shop in a mid sized town.
As much as I sometimes get frustrated with those calls/questions it also is a
reaffirmation that I am a trusted source.

The nice thing about this business is that there isn't a right or wrong way to do it and
still be successful. Personally, I believe it to be my responsibility to help in as much as possible when
it comes to my insureds policies. Whether EOI's or taking a credit card payment over the phone. The more
they contact me to resolve their issues, the higher the loyalty and retention. IMHO.
I tell my customers to contact me with issues/concerns/questions cuz I'd rather have them call me
and display my committment to taking care of them.
That being said, if another agent wants to run their agency in the exact opposite manner who am I to tell them
they're doing it wrong. You get to set your own paramaters and the clients will either chose to accept them or move on.
There is more than enough business out there to sustain both agency models.

Ohhh, Ohhhh...I just thought of another favorite...in the smaller agency world...the former client who leaves for rates...and then continues to call you for advice on dealing with their policies with the new shop...coverage explanations, claim info, that sort of thing. And when asked why they continue to call after severing the relationship? The answer is always: my agency was so nice about taking time to answer questions and the new shop isn't.

Or how about this one: You quote a client a home insurance policy for a home purchase. They go with you, you send them apps, they sign and send back, you issue the policy, and send the binder over to the mortgage company for the closing. (Standard coverage, standard 1% deductible, which is the norm here in Texas.)Then, they contact you 3 weeks later, to inform you that they decided to go with a cheaper rate offered from another agency. No problem, you ask them to send you the dec page so that you can back-date the cancellation. When you get the dec page, you notice that the other agent wrote the client with the exact same company you did, but with one exception: a 2% deductible instead of a 1% deductible. On a $300,000 house, the deductible will now be $6,000 instead of $3,000. Now why couldn't the client have requested the same high, 2% deductible through us? Are clients that ignorant?

Now why couldn't the client have requested the same high, 2% deductible through us? Are clients that ignorant?

Yes.

rodgwag, I am with you, as far as I wish I did not have to do any service work. Keep in mind carriers do not like to pay agents anyway, and certainly I believe they are constantly looking at the bottom dollar cost they are paying agents for renewal service commissions as it is. But by heaping more and more service work on the company, and training your client's behavior to more and more to deal directly with the companies(Which, by the way, is exactly what the companies want, in order to eventually bypass the agents completely. Ex: Esurance from Allstate, 21st Century from Farmers, Progressive direct, Geico Direct, etc) they may decide to start cutting our renewal commissions. Travelers and Safeco have already taken steps in Texas this year, to reduce commissions on monoline home policies from 15% to 10%. But I think the vast majority of agents who would like to keep our jobs for the next 20 years do not want to accelerate the company's or the client's thought process, even if we are headed that way already. Look what happened to the Travel agent's. Can you say "Priceline"? By encouraging our clients to deal direct, and heaping more and more service work on the insurance companies, we may just get our wish of no more service work, but also, no more service commissions. We may one day wake up and the home and auto business may be like writing life insurance. Commisson for the sale the first year, but no renewal commission if we are not in fact "servicing" our clients. Just sayin', it is worth thinking about.

Insurance companies cut the service part of your commissions a long time ago. Companies like Priceline.com are the future and commissions will remain high or go higher if we can increase sales. Insurance companies don't need you for service because they can do that with better controls in house but they do need you for sales because advertising expenses are much higher than paying your commissions will ever be. We are salesmen, don't believe it? Stop selling and watch them drop you.

One of my pains has happened a few times lately.

Customer from State Farm (or other large captive company) comes to me to quote their business. I am able to beat their premiums by $700-$800 per year, and they wind up sticking with State Farm because they are uncomfortable with the smaller (but A+ rated) company I quoted them with. Or they have never heard of Safeco, Republic, Germania, etc. I have no issue with someone wanting to stay loyal to a company, but it wasn't as if I am approaching them. They came to me to quote their business, and they wind up staying with State Farm.

"Insurance companies cut the service part of your commissions a long time ago. Companies like Priceline.com are the future and commissions will remain high or go higher if we can increase sales. Insurance companies don't need you for service because they can do that with better controls in house but they do need you for sales because advertising expenses are much higher than paying your commissions will ever be. We are salesmen, don't believe it? Stop selling and watch them drop you."

rodgwag, you are throwing around a lot of statments about the cost of the agent versus the cost of the company to advertise and service in house. Do you any source you can reference that backs up these claims? Also, if you believe that companies should service your clients, have you contacted all your carriers yet that will do this for you, and in exchange for this service, will pay you less commission?

Lone calm down, I am just stating the facts and if you don't understand that advertising expenses are much costlier than those associated with customers service then you don't run your own agency. Also, we get full commission from every carrier that handles our customer service (95% retention last year).

rodgwag, I am calm. If you read my previous post, all I did was ask you for your source or study that would substantiate your opinion that the cost of insurance company advertising and inhouse service greatly exceeds or equals the cost to pay insurance agents their full commissions. My opinion, and because it is only an opionion, it may not be correct, but I suspect that the delta between the insurance compoany costs associated with advertising and in house CSR's versus paying agents full commission, is not that large. Employees of insurance companies that are hired to sell direct to consumers, do have employer related costs such as benefits, training, etc. And advertising does cost as well. But if you have read anything insurance related recently, you will see that insurance companies continue to increase advertising by double digits year after year. Geico has quadripled their book of business in the last 15 years. Progressive has grown from a non player 15 years ago to one of the top 5 carriers, if not higher, in the US. And Geico and Progressive sell direct. My point is our jobs are not as safe as you might seem to think, and by branding your agency as only a point of sell, and sending your clients to deal with the insurance companies directly for all other service, you are playing right into the hands of the insurance companies. You are not any different than a call center, which is fine if that is how you want to operate. My concern is that insurance companies have no problem if others besides themselves, train the public that agents are useless. Agent commissions, at 15% of GWP, is a BIG NUMBER at the bottom of their balance sheets, and I am sure this number gets looked at all the time by the bean counters. And one day, the insurance companies may realize that since they are doing all the service work, why should they pay agents "service commissions"? I don't know about you, but I got into this business for the renewals, and I would not like to make 10% new business commission only, and no renewal commissions. That is where this is headed, you know, unless we approach it differently. This will be my last post on this subject. I think we have both beat this to death. I hope you are not offended by my reply, as that is not my intent. You seem to be a successful agent, and I wish you a great 2013. Hopefully, my post reflects that I am very much pro-agent, and therefore I am passionate about protecting the agent profession.

No problem Lone, I don't have any hard feelings. Just know that sales are all that counts in our business. Also, again (in case you missed it) we had 95% retention last year with this model so don't worry about our retention. Insurance agents are just like travel agents, people DO NOT appreciate us and they never will. like it or not the corner agency will be dead because it's all going online soon (mono-line commercial insurance is next just watch).

I'm with lonestar on this one. A colleague of mine called the other day a little nervous about the new State Farm commercial where after a claim someone asks about his agent, and he points to his smartphone and says "This is my agent!".

Rodwag, if that works for you, more power to you. But I'm going to continue to champion the value of an agent.

Did anyone mention bad employees? Clock watcher CSR's, employes that steal time by caring for their personal business, versus caring for clients needs.