Like most agents, you work hard at writing new accounts, what salespeople through the years have referred to as “getting the fish in the boat.” But it doesn’t take a master angler to know that once you get the fish, you must still make sure it doesn’t jump out. Then it’s back to square one.
Whether agents spread themselves too thin, lack the resources to follow up efficiently or are just too darn complacent, they can fall into the trap of not servicing their clients’ workers’ compensation needs properly. Perhaps they don’t even realize it.
Any one of these possibilities can cost customers money including increasing their workers’ compensation costs, and can potentially cost agents their business.
1. Agents who blindly copy other agents’ work. Think of it as taking over as manager of a baseball team and doing nothing more then copying the old manager’s lineup. Maybe the guy playing third base should really be playing first base. This happens when an agent gets a new commercial account and does little more than copy the workers’ comp employee classifications the previous agent used. There are more than 600 classifications used by the National Council of Compensation Insurers (NCCI). Many of them cover similar but not identical operations. The rules about who is covered by these classifications are commonly misunderstood, as in a recent situation where employees of a steel retailer were misclassified because they also did some painting of the metal they sold. The painting classification was far more expensive and the classification should never have been used.
So right from the start, the agent is failing a client, through nothing more really than sheer laziness. Take time to walk the site to make sure you are familiar with the operation, what they do, and who does it.
2. Agents who ignore valuation dates. Eighteen months after a workers’ comp policy’s inception date, the insurance company takes a snapshot of the current status of all claims, including what has been paid and also the money that the insurance company expects to pay. But those numbers may not be correct. Maybe the reserves are too high because they thought an injured employee was going to need $25,000 for surgery, but only required $5,000 of physical therapy. Maybe another employee was deemed by a doctor eligible to return to work, but the adjuster never got this information.
Agents should take advantage of their agency management system to keep track of upcoming valuation dates and to speak with the adjuster at least 60-90 days before the date to better understand all the facts and figures. Otherwise, once the date has past, the ship has sailed and your client will have to suffer the overcharge for a full year.
3. Agents who don’t get involved in the premium audit from the beginning. When agents don’t get involved in helping clients with their premium audits until after the fact, there can be a problem when the employer receives an unexpected bill.
But by then it’s like trying to put toothpaste back in the tube. It’s important that agents be more proactive and more involved in the process before the auditor shows up. By doing so, they can educate the employer prior to the audit on such items as what money they give employees that applies to workers’ compensation and what money doesn’t.
But you can’t leave it up to the employer to draw you into the process before it happens. Times have changed. When the economy was booming, and rates were going up, an agent might get a call from an employer questioning why a $5,000 bill arrived in the mail. The agent would review the account, explain the situation to the client, and even if the bill still had to be paid, there was good will because at least the agent made the effort.
Today, as workers’ comp rates decline and payrolls have thinned out, employers are likely to receive a check in the mail for a workers’ compensation rebate instead of a bill. Since it’s a check, they aren’t asking the agent about it. By not having that conversation, the agent is denied the opportunity to determine if the employer qualifies for additional funds. Be proactive from the outset.
4. Agents who let insurance companies handle 100% of the claims. When a worker is injured on the job, most employers automatically call the insurance company. Makes sense since the agent isn’t the one who cuts the checks. But in truth, the agent should be involved when there is an injury to monitor the process. By doing so, the agent can stay updated on all communication between the medical staff and the employer and the adjuster, find out when the injured party can return to work, make sure there is a plan in place for that to happen, and generally keep the flow of communication moving between the doctors, the human resources department and insurance company.
By not getting involved, the agent is pushing all the responsibility to the insurance company, a third party that the employer has no direct relationship with. The employer chose to do business with you. They trust you to make sure their employee injuries are being dealt with appropriately.
What employer would not appreciate an agent’s participation in the process? What employer would not want another set of trained eyes keeping track of claims?
It’s an expense to have an employee off the job when it isn’t necessary. Helping to facilitate getting an injured employee back to work as quickly as possible can only benefit a client.
5. Agents not educating the Human Resources department. Agents who build a positive relationship with HR personnel are doing everyone a favor. Most HR departments are under staffed and in some companies, the person with HR responsibilities was “assigned” the job without training.
Unintentionally, it’s easy to “hire” a workers’ compensation claim, someone who is not fit for the job.
Agents can be helpful by sharing their pre-employment experience in medical and drug screening, background checks, and knowing not only what to ask in the interview process, but how to ask it, based on the physical requirements of a position. How not to assume that a 6-foot, 240-pound man can easily lift 50-pound boxes off a truck, when a simple medical test may show that there’s a past history of back trouble that limits lifting to only 20-pound boxes. And the knowledge of how to withdraw a job offer may be very helpful to clients.
6. Agents not helping clients make more money. Write this down. First rule of business: employers are more interested in making money than saving money. Use your own contacts to benefit your clients. For example, an insurance agent in Florida insures 2,000 homeowners and five HVAC contractors. The agent received approval from the contractors to offer a “free air conditioning system check up” to his clients. He split up his list and mailed the offer as a special opportunity they had for being a client.
Everyone appreciated the gesture, the contractors made some sales, and with so many competitors vying for his business, the agent was able to build what Preston Diamond, president of the Institute of WorkComp Professionals, once labeled “an alligator-filled moat around the client.”
Use the workers’ compensation skills you’ve been taught to benefit your customers. Be involved in the process from the start and chances are you will both reap the rewards.
Ring is the lead workers’ compensation analyst for the Institute of WorkComp Professionals, which trains insurance agents to help employers reduce workers’ compensation expenses. A licensed property/casualty insurance agent, he is the co-developer of a new software suite that helps insurance professionals working with employers. He can be contacted at 828-274-0959 or Kevin@workcompprofessionals.com.
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