Here comes the New Year…Are you ready?
Have you taken the necessary steps to close out 2019 and welcome 2020 with the fresh start that it deserves? Closing out last year is a Must-Do step in any agency.
Get your accounts in order. One of the most important tasks at year-end is to accurately and timely close your books. Close out your account payables and receivables and balance operating and trust accounts. If you have good accounting, the process should be a pretty easy task. Closing out of your accounts and starting the year with organized and accurate balances allows you to understand your previous year’s financial activity as well as awareness to any balances that will carry forward to the new year.
Some tips from Hawksoft CMS to help you with your Year End accounting:
- Run the Customer Summary Balance report to get a report of all of your current customer balances. This report includes all unpaid customer balances and credits.
- Clean up balances as needed by waiving balances, voiding invalid invoices, issuing credit, and sending a current statement to your customers.
- Verify that unpaid company payables are current and accurate.
Understand the KPIs of your book of business from last year. By understanding the trend of your book of business from last year, you know how to move forward, what to avoid and where you gained the new business. Although you cannot change the past, it can provide insight to promote your future.
Really look at your Customer KPIs (Key Performance Indicators)
- How many customers and policies did you add in the past 12 months?
- Of those new customers and policies, what was your best source of acquisition?
- Are all of your team members entering accurate sources in your CMS?
- How many customers and policies did you lose in the past 12 months?
- Did your team do a good job of entering the sub-status of cancelled policies? The carrier download status of ‘cancelled-non-payment’ is not enough. The WHY did the customer let the policy cancel is essential.
- Was it the price? If so, who was the competitor? Tracking trends of lost business to competitors can lead to a Win-Back campaign.
- Was it the agency’s or carrier’s service? This is an opportunity to understand the downfalls of the agency or the carrier.
- Using a Report Card or calling the client to find out WHY they left the agency is crucial to understanding retention trends
- Make sure that your team is accurately entering the status of Replaced for remarketed policies on renewal. These policies should not be left to Expire as they will impact retention. Likewise, policies without a renewal possibility – like One Day Event, Course of Construction, Term Life, Builder’s Risk – should also not impact retention. Using the Replaced: No Renewal Term status and sub-status is necessary on these types of risks.
Move forward with Clean Data. This has been a hot topic in the industry. The data that you depend on in your CMS is only as good as data that YOU have put in to it. You cannot depend on your KPIs if your data is not accurate
- Data Clean-Up
- Active Clients with Inactive Policies
- Clean up Producers and CSRs assigned to policy – many agencies have inactive Producers and CSRs assigned to policies and this has a huge impact on the Download Configuration and assigning workflow.
- Clean up Policy Titles and Lines of Business – Use default policy titles and lines of business for accurate reporting.
- Clean up Companies – A company should have only one Unique Name and be listed and the same way for each line of business. This is the name the users see when selecting a company on the General Policy Information screen and shows up on all reporting. The issuing carriers needs to be entered in the Programs field on the Policy Info screen.
- Annual Premium – Current Rate vs Quoted Premium. For accurate reporting, it is important that the Premium amount is manually entered on policy Coverages screens for non-downloading policies. If coverage premium isn't entered, CMS calculates the Premium based on the Quoted Premium entered on the General Policy Information screen and the Quoted Premium is usually not the correct premium which means your agency’s KPIs are incorrect.
Now, what are you going to do to Ramp-Up new sales for 2020?
Statistics tell us that the probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is just 5-20%. Yet, almost every agency that I work with has an average of 1.5 policies per customer. Your own customers are the best source of new business and referrals.
Run the following reports for your agency:
- Active auto but no home
- Active home but no auto
- Active home and auto but no active umbrella
- Monoline business report of the entire book of business…our favorite report of all! Using your advanced reporting feature, run a report with number of Active and number of Inactive policy filters. Simply sort the report for any client with only one active policy and now you have a Monoline policy report.
Start a Cross Sell campaign that fits your agency’s book of business and offer an incentive plan or a competition among your sales team members.
Studies have proved that personal lines retention rates average 95% with clients that bundle their auto and home. Whereas, retention rates are only 83% for monoline clients. Also, the same client with only one product will stay for 18 months on average. The clients with three products have an increased longevity of the 6.8 years on average. The more invested a customer is in your agency, the better your retention and longevity of clients.
Happy Holidays to you and your team. We wish you every happiness and success in the New Year!
Written on December 20, 2019 by Peggy Corbett