Insurance carrier service centers continue to gain more and more momentum. Insurance carriers have built service centers to support business written by independent insurance agents. More independent agents are seeing value added benefits placing their Personal Lines and Small Business Commercial Lines business in carrier service centers.
Some of the many advantages of carrier service centers are:
- Flexibility – agents can pick and choose which accounts they want placed with the carrier for servicing.
- Retention on renewal. Business placed in service center carriers have on average 3-5% higher renewal retention compared to in-house service.
- Extended hours of operation, such as 8:00 am to 8:00 pm Eastern Standard time. More hours-of-service operations provided to help meet the customer needs as opposed to what you could afford as a small commercial business.
- Service centers have carved out specialized units that enhance turnaround time to meet the customer time constraints. An example of this would be a unit that issues only Certificate of Insurance.
- Transferring accounts to carrier service centers allow the independent insurance agent to concentrate on increasing their agency revenue by spending more time writing new business.
- For established accounts there is potential cross sell opportunities of additional lines of business. Up-selling additional coverages to existing accounts is another value-added service provided.
- Professional licensed P&C staff that is very knowledgeable of their own carrier coverage and product offering. This limits potential E&O exposure due to the carrier employees’ expertise with their own products by line of business.
- Bi-Lingual speaking staff provides enhanced service levels within the service centers.
Knowing how to effectively use service centers is extremely important for an independent agency to have success utilizing service centers. Here are some items to research that will help you determine if service centers will fit into your agency plans:
- Make sure you understand the services a service center provides. Some carriers may offer to service all accounts while other carriers may limit their services. Knowing how carrier service centers will interact with customers is another key element to understand. Will they mention your agency name into their conversations with customers?
- Review the carrier’s service center agreement. This is important as you want to make sure you understand the agreement and know how the indemnity provision around E&O coverage will be handled. Your agency should not be responsible for errors made by the service center.
- How will the accounts be transitioned over into the carrier service center? One of the more important items is how will the agency office procedures be modified with transition of accounts. You will need to modify your agency workflow to accommodate this transition, and make sure agency staff fully understands the revised agency procedures so there is no duplication of effort. You do not want any customer to fall through the cracks with any miscommunication of whether the agency staff or the service center will service the customer. An agency management system may be very useful here.
- Maintain ongoing service of the customer with the service center. A lot of times existing customers will continue to call their agency even after the customer has been transitioned into the service center. Make sure you have a workflow in place for soft transfer of the customer from your agency to the service center. This will help the agency utilization of the service center and to eliminate any potential issues with E&O exposure.
- Make sure you have full understanding of who will be responsible for handling potential additional coverage options the customer may need or any account rounding opportunities for the customer. It is extremely important to understand how additional exposures will be handled and managed for the customer.
- Understand how basic E&O management will be handled. Is there an E&O checklist in place? For example, what forms will the customer be required to sign, proposals, any type of disclaimers, type of documentation in place, customer communications, quality controls in place are all key items to think about regarding potential E&O exposure.
As more and more momentum continues to grow for carrier support centers, independent agents will need to carefully review the benefits and costs of doing business. Having a complete understanding of what service centers provide, how it will affect your agency workflow and how the customers experience will be impacted are all key elements to analyze when deciding whether to use them.
For more information on what services they offer, reach out to your local carrier Personal and Commercial Lines sales representative.