Claims/Agency Relationships-They can make or break you!

This article from  Jacksonville,FL (home of Citizens FL Insurance) drives home how the insurance market crisis is reducing the book of business for agents. We too often forget to include them in the customer service equation while handling claims which is even more important now than ever.

This storm season, not only will adjusters be faced with angry insureds over the severe increase in insurance premiums they have faced since the 04/05 season, you will be faced by upset agents angry over their loss of customers due to carriers withdrawing from the market in many communities. They have lost customers to state windpools and underwriting restrictions do not allow them to write new policies in many markets previously serviced by their agency.

We ask the question in one of our training classes for new adjusters what they would do if an agent pressures them to give their insureds priority treatment. The answers are interesting and generally the misconception is that they would tell the agent no. They have no concept initially about the very important equation agents play in claims customer service.

Listen, agents have a direct line to carrier executive offices. Respect that. I recall  hurricanes Erin and Opal in Pensacola,FL back in 95. We had our corporate managers in large numbers at the catastrophe operation since the storms had caused significant storm damage in the FL panhandle. Having been a field adjuster in Pensacola prior to moving into management and leaving the area, I was familiar with the agents  there. Taking an agency listing, I was able to highlight the senior agents who were very influential on the complaint ratio of other agents in the area and recommended to senior managers the need to get adjusters to their offices immediately as agent advocates to give priority treatment to their most important customers with damage. As we were still setting up the cat operation, action had not yet been taken to do so. Sure enough, within 2-3 days, each of these individuals were in the catastrophe operation complaining already about claim customer service. Needless to say, senior adjusters were matched to these agencies and things progressed much more smoothly from there.

Folks, these agents aren’t going to be happy campers after experiencing major reductions in their book of business. We need to consider them when servicing their claims to be sure that we don’t create any additional loss of business due to poor claim handling of all of their customers.

How can you as an adjuster or adjusting firm contribute to successful claim/agency relationships?

We always recommend adjusters working for a dedicated carrier obtain a copy of the agency listing for the territory. Get the names from the phone book if you can’t get a listing from the local field claim operation. Once you know your assigned zip codes, locate the agents in that zone and make sure to stop by their agencies and talk to their staff and to the agent so they can put a face with the name they will be hearing often from their customers. It’s much harder for someone to complain about you when they’ve had the opportunity to get to know you personally. Make sure you provide them with all of your contact information so they call you and not the carrier when they need you. Show them your dedication and professionalism by respecting their need to know what develops on their claims.

We all know that agents may override the purpose of severity codes as they enter their loss notices so their insureds get priority treatment. We’ve seen many agents abuse the codes over the years. Why do they do this? They want you to see their insureds first…..period! It is important when you are making first contact calls that you enter corrections to improper severity coding so claims with minimal damage are not included in reports showing adjusters are not making contact on severity one claims. It is also helpful to the agent should their staff have inadvertently left off a severity code on the loss report so they know which of their customers have major damage and may need their personal call.

What always worked for us would be to stop in at the agent’s office to ask them which 5 of THEIR claims were most important to be inspected first. You can explain (although they already know the drill) that you are required by the carrier to work the worst severity code losses first. The problem with this from the agent’s standpoint is that they have taken years to develop clients and bring them on board. It’s not an easy task. They may have insureds with less severe damage that are high profile clients and it is very important you do everything you can to preserve that customer. This could include commercial businesses, local politicians, lawyers, and many other important customers. While you can’t fit them all in as a priority, the agents are appreciative that you cared enough to secure their input and you’ve put the ball in their court as to who they need to make a priority. When you finish the first 5 or so, ask them again as time allows. Make sure you call them after you see each one of these clients they have designated a priority. Don’t be surprised if they want to accompany you as personal service is very important to many of them.

Keep agents in the loop should you be dealing with an irate customer from their office. You’d be amazed at their ability to smooth things over with their background in sales. They do not want to be blindsided by a phone call from an insured. Call them immediately to forewarn them if something negative develops such as a coverage issue or settlement complaint. Be prepared not to just inform them about the issue but what you have done within your control to handle the issue and what is pending on the claim and why. Facts in hand, they can support you when the customer calls them as they are educated on the nature of the complaint and the claims department position on the unresolved issue. It is also wise to notify them if their insured retains an attorney or public adjuster…they need to know as this would also prevent their ability to speak directly with the insured regarding their claim.

Carriers usually request you copy agents on all reservation of rights letters sent on coverage issues, settlement letters, and any interim written correspondence with the insured. This is often overlooked by adjusters. They also have special reports usually sent out weekly to the agents during catastrophes that are designed to provide them with an update on the status of their claims. It’s important that you daily update contacts, inspection dates, and timely get your inspections written up so they close quickly. Believe me, the agents do utilize those reports and bring them to the claim office with concerns should you drop the ball servicing their clients.

Agents have a wealth of knowledge about their clients. If your loss report doesn’t  give you up to date phone numbers or work numbers for an insured, call the local agent and find out if they have the records. This is especially important when insureds are temporarily relocated due to a catastrophe. Even when their records do not have new information, they usually are also associated with other family members  insured with their agency who will know how to reach them.

While dealing with insured’s, you will hear many underwriting allegations such as “my agent didn’t tell me” when it comes to issues on coverage such as building limits, special limits within the contents coverage, deductibles, and other endorsement options. Don’t EVER make comments such as “your agent should have told you” or “your agent should have written X coverage for you”. You are not an underwriter and it is never appropriate to make such comments. Those type of issues are for underwriting and the agency to resolve. Your job is to handle coverage as written at the time the loss. When comments such as these are made, inform the agent. The agent will have records of coverage discussions and any exlusionary coverage forms signed by the insured such as an insured’s desire to waive coverage.  If the agent has records documenting coverage was in fact not written correctly, they will deal with that through the carrier underwriting department. When the coverage is added, if retroactive to the the current policy term, you would then need to pull a new loss report showing the coverage is now listed on your claim notice before recommending payment. If you are an independent, you would include this information in your preliminary reports to the carrier. As with any issues, the carrier should be notified immediately when issues like this are alleged. As staff adjusters, we would then proceed to take recorded statements from the insured, the agent, staff folks who assisted the customer with coverage, and obtain copies from the agent of any records to document that coverage should or should not exist. These records were then submitted to an underwriting manager and often the decisions were made by underwriting committee members. Once a decision was made, the claims department was notified with directions on how to proceed from there.

You say this doesn’t apply to you as an independent? If so, that comment could well cost you the assignment. Agents rightfully expect the same of you as they do of a staff adjuster. They provide feedback to executive during surveys of agents on claim service and they are very influential regarding the use or non use of staff or independent adjusters. They can cost your adjusting firm a carrier contract thus reducing your workload if a number of them are not pleased with the service your firm is providing. Many agents often will make requests to the local claims manager for you to be selected to stay for clean up when pleased with your customer service.

If your adjusting firm utilizes agent advocates ….fantastic! If not, you should definitely provide the staff to have folks dedicated to taking agents calls outside of phone lines set up for insureds. We often see the mistake of some firms that do have them use new adjusters for the position. Think about this for a minute. If the agent is calling, they are usually already aggravated with a claim situation. They need someone who can resolve the problem…not further add to the frustations. The excellent agent advocate managers I’ve watched have claims reassigned to experienced adjusters who can resolve the issue and close the file down not a trainee who simply refers messages to experienced adjusters. The agent wants someone to help them not “look into it”. It is time and expense well spent making their concerns your priority. Should you not have such a service, you leave them no choice but to report through the carrier which only increases the time involved not only to address their concern but also to report back to the carrier management staff who also had to get involved in the complaint. Everyone has someone they report to. Let’s decrease the circle of folks involved and proactively address them ourselves.

Reserves set on claim files have an important relationship to an agent’s loss ratio monitored by carriers. While cat loss reserves in the initial stages are normally set by the carrier in bulk, large losses over a given dollar amount (such as 100K) are required to be reported through large loss preliminary reports by the assigned adjuster. It is important that you properly increase reserves through the appropriate carrier manager which alerts the agent he will have a large settlement counting against his loss ratio. Equally important is to reduce a reserve that is no longer applicable. Cat losses often are not considered against an agent’s loss ratio so it is also important that the proper designated cat code be entered in the system should you run across a storm related claim that does not have the cat code entered in the system. Having spent 90 days or so helping a major agent locally review claim loss reserves on a huge book of business, I can attest to the fact that reserves are often out of date as things develop on claim files.

In addition to reduction in their book of business and the skyrocketing prices of insurance, agents have had to deal with the loss of personal service by field staff adjusters as carriers move to larger claim central operations. You’ll find agents who support the programs and those who are very non supportive of the “team concept” of claim handling. Don’t add to their stress and be the straw that broke the camel’s back by not keeping them in the loop on claim issues you experience with their customers.

I’ve said it before and mention it here again…it takes all pieces of the puzzle to put it together. Agents are the backbone of the customer service puzzle. Make them a priority in your claim service decisions.

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7 Responses to Claims/Agency Relationships-They can make or break you!

  1. […] are in the claims process so you might want to review our blog on agency and claim relationships here. Disaster communication and a discussion on throw away phone advice is […]

  2. […] Hadn’t I just written about claim reserves last week in this Claims / Agency Relationship blog? […]

  3. lgoodson says:

    Perfect timing for this blog. Good thought. If we think the last two years have been hard on us, we need to talk to an agent. I have a friend in Texas that is an Allstate agent. Her clients are in her area, which is coastal.She has experienced a very, very hard time.

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