It’s a new year! Time to review how to reduce agency costs, boost efficiency and build a valued client experience. One of the items that agencies who handle commercial insurance should consider reviewing is the delivery and/or mailing of commercial lines policies. With a fresh year, it’s a great time to review if we have been doing things the same way just because we have always done them that way. Commercial policy delivery is a great place to start.
Just like everything, there may be a few clients who prefer printed policies. Developing a strong customer experience includes carving out the experience a few key and high value clients prefer. Every agency should encourage an efficient and effective strategy for all clients.
The Math Behind Electronic vs. Print Policies
In order to understand the cost associated with print vs. electronic policies we have to analyze the time and cost associated with policy delivery.
Time Costs
- Receiving the policy either via mail or pulling it from the carrier website: 3 Minutes
- Scanning the policy into your management system: 6 Minutes (going to the scanner, scanning and attaching)
- Preparing the letter associated with the policy: 8 Minutes (even with a template you still have to adjust it and proof it)
- Printing the policy, letter and postage: 5 Minutes (if no postage, walking it to the agent)
- Total Time: 22 Minutes or 1% of the work week per policy
Hard Costs
- Paper to print the policy
- Postage
- Envelope
- Policy presentation materials (folder, binder etc)
- Gas to deliver the policy
Ways to Improve Efficiency on Commercial Policies
Many agencies have taken the opportunity to evoke downloading commercial policies. For those reluctant to move forward with establishing the carrier downloads, the common reasons are that with the download there is the perception of the loss of control. Just like in personal lines the carrier download will replace data in the management system. In order to maximize download efficiency, your agency must establish clear workflows. However, the benefits are clear! You can reduce the paper coming into the office, stop tedious scanning and attaching, and operate faster and more efficiently.
In commercial lines, many agencies have a combination of carriers that download and other companies who have not yet taken the leap. Where possible think about placing business with those companies that do download for efficiency. Your agency becomes more profitable when your team doesn’t have to handle small work that doesn’t drive revenue.
Why Paper Policies Are a Challenge
Delivering policies can be a great touch in your customer experience. The more the right clients see you the better you are at warding off the competition. However, in many agencies the policies simply stack up and some clients do not receive their renewal for months. This take the good will of the customer experience and turns it sour. You were working on building the relationship but a 4 month late policy makes you and the agency look disorganized.
When looking at profitability, you have to identify a clear line on the policies that will be delivered and which need to be delivered by other methods. Agents can’t be delivering smaller policies between the time expense and gas expense; delivering paper policies to all clients becomes unprofitable quickly. When there are other sizable opportunities that exist you can reasonably make a case for policy delivery, but there needs to be boundaries.
While some clients prefer the paper, more and more of the world is going toward being green. The processing of paper, materials, gas and delivery impacts the environment. Many clients may store the policies on a shelf that takes up room. With electronic policies, more team members can share the policies and it takes up less space. 2019 is a great time to reach out to clients and identify who would prefer an electronic policies.
How to Move Toward Electronic Policies
Once you have the intention of encouraging electronic policies you need to start educating the clients as to their options. This all starts with your team. For many team members they may like the paper, so we need them on board first. Paper provides a false sense of security. With paper we see the piles and we believe we remember what to do next. However, this has proven false many times. Paper policies breed the following bad habits:
- What’s on paper is generally not in the management system
- The paper files on someone’s desk mean that others can’t assist with the clients because the information is too difficult to find
- Paper files do not show priorities the way the management system does
- With paper files, you have to consistently reorganize them which takes valuable time
- Paper files allow for things to be missed
Step 1: Get your Team on Board with Paper Reduction
For every commercial account manager, paper is a safety net. We need to reduce the dependency on paper with real time scanning. There should be zero paper on account managers’ desk at the end of the day. It all needs to get into the system. Think of how stacks of paper equal stacks of potential E&O Issues. People may resist change, but once it becomes a habit most don’t look back. You will need to announce a reduction of paper and hold people accountable. If you think your team may push back on the electronic policies, consider our agency assessment:
Step 2: Educate the Clients on the Benefits of Electronic Policies
Simply asking “Would you like electronic or paper policies?” is not the way to execute. Instead you need to educate them on the benefits of receiving policies electronically such as:
- Reduction in paper
- Quicker policy delivery
- Electronic copies can still be printed if need be
- Electronic copies are easier to share internally
Step 3: Start the Process and Document How Policies are Delivered
In your management system you should start keeping track of who prefers electronic copies. For those holding out, ask the producer to get involved. Sometimes an extra voice moves the needle (Remember, all the cost and time savings!) For those smaller clients that need to be pushed in the direction of electronic copies get involved and let them know this is a procedure change. Remember, if they leave over having to print their electronic policies themselves they may not be the best fit for your agency.
Conclusion
While paper policies when done right and consistently can be a nice touch, couldn’t you convert that energy and cost into other ways to provide clients the WOW experience? Agencies should challenge the ways it’s always been done and look to see if the delivery of policies is really happening as designed. Also, as the world continues to adopt more technology, electronic policies are becoming far more common. Take the opportunity to win your agency more time and invest it back into other ways to boost your customer experience.
Interested in learning more about the differences between customer experience and customer service? Read one of our latest blogs:
