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Advisory Council Meeting Summary - Central Insurance Companies

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					Advisory Council
Meeting Summary




 The J.W. Marriott Buckhead Hotel
          Atlanta, Georgia
          April 19-21, 2006
The 2006 Blue Streak Advisory Council, hosted by Central’s Southeast Regional Office,
was held April 19-21 in Atlanta, Georgia. The Blue Streak Advisory Council members
for 2006 are:


Central Regional Office

Jim Baker                                              Jason Lyall
Glazier Insurance Agency Inc.                          Rankin & Rankin Inc.
Jefferson, Ohio                                        Zanesville, Ohio

Chris Reynolds
Forrest Sherer Insurance
Terre Haute, Indiana



Southeast Regional Office

Ruth Hoke                                              Dennis Lam
Allen Tate Insurance Services                          Donald H. Bailie Agency Inc.
Charlotte, North Carolina                              Augusta, Georgia

Dee Ann Twomey                                         Randy Wright
Jennings M. Bryan Agency Inc.                          Carlton Wright Insurance Agency
Burlington, North Carolina                             Roanoke, Virginia


Southwest Regional Office

Linda Byford                                           Mickie Comiskey
Hub International Southwest Agcy                       Focus Insurance & Financial Svcs.
Santa Fe, New Mexico                                   Houston, Texas

Candee Condray-Romero
Compass Insurance Agency Inc-Mueller Division
Tucson, Arizona


The 2006 Blue Streak Advisory Council incorporated sessions and discussions on a wide
variety of topics. This year’s agenda included a look at Central’s year-to-date results, an
Agents’ Roundtable where participants shared information regarding competitive
conditions and trends in their respective markets, an update on Central’s new Customer
Services organization and a discussion on potential future product development ideas.
The Open Forum concluded Friday’s final session. Council members used each of the
sessions to provide Central with valuable counsel on how to improve its products,



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programs and services. These suggestions—along with Central’s responses—are
provided on the following pages.




                            Customer Service Suggestions

Council’s input

   ♦ Some agencies would like Central to explore the possibility of offering a Service
     Center.

Central’s response

   ♦ We are looking at ways to provide service features that will enhance agency
     value. Will it be in the traditional Service Center format? Probably not. Our
     research indicates that neither agencies nor companies are more efficient using the
     standard Service Center model. We are looking at ways of providing service and
     functionality that allow both agents and Central to streamline processes and
     increase productivity.

Council’s input

   ♦ Historical billing information needs to be made available on the internet.

Central’s response

   ♦ We are currently working on a new billing interface for agents. It will include
     billing history displayed as a ‘statement of account’.

Council’s input

   ♦ Billing service fees should be reduced when multiple policies are on an account.

Central’s response

   ♦ When the new billing system is implemented, insureds will have the option to
     combine policies at the account level. Policies that are billed at the account level
     will see a reduction in overall service charges.




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                        Information Technology Suggestions

Council’s input

   ♦ The internet application question “any other insurance with company” should be
     prefilled with all existing policy numbers.

Central’s response

   ♦ We will consider this request in conjunction with a future project in which we’ll
     determine how to make our internet programs account-driven rather than policy-
     driven.

Council’s input

   ♦ The system should be automated so that the auto data floods into and updates the
     PUP policy mid-term when an online automobile change is made.

Central’s response

   ♦ This is a suggestion we’ll consider as a future enhancement.

Council’s input

   ♦ Agents need the ability to email applications to their customers.

Central’s response

   ♦ This is on our priority list as an upcoming future enhancement.




                                           4
                                  Claims Suggestions

Council’s input

   ♦ Agents need to be notified when claims are denied.

Central’s response

   ♦ Our claim representatives provide notification to the agency when a claim is
     denied. If at all possible, we attempt to bring the lack of coverage to the attention
     of the agent prior to notifying the insured of the coverage denial. If you believe
     you are not receiving advance notification, please contact your regional Claim
     Manager.

Council’s input

   ♦ Policyholders often want to know how much was paid on a claim. Central should
     provide this information to policyholders on its Just For Policyholders section of
     the website.

Central’s response

   ♦ Claims is looking at providing this additional information on the website.

Council’s input

   ♦ Central should provide its agents the results of any claims service surveys it
     conducts.

Central’s response

   ♦ Over the past five years, we have sent out over 4,000 surveys. Nearly 98% of
     surveys indicate respondents had a positive experience. If you need more
     information about these surveys, don’t hesitate to contact your regional Claim
     Manager.




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                       Product & Underwriting Suggestions

Council’s input

   ♦ Hybrid vehicles are becoming more commonplace. Central should offer discounts
     for this type of vehicle.

Central’s response

   ♦ We will evaluate as more data becomes available for this vehicle type.

Council’s input

   ♦ Central should consider making Identity Recovery available as an endorsement on
     auto policies in order to provide coverage for monoline automobile customers
     where the agent is unable to write the homeowners.

Central’s response

   ♦ We will explore this idea.

Council’s input

   ♦ The Plus Ten endorsement provides Personal Injury coverage of $10,000. Central
     should look at increasing this amount to the Coverage E limit.

Central’s response

   ♦ The Summit policy already provides Personal Injury protection up to the
     Coverage E limit. The Plus Ten endorsement, priced at $25 per policy, was
     designed to be an affordable alternative package of coverages for people who
     didn’t want to purchase or didn’t qualify for a full-fledged Summit policy.
     Customers who desire additional Personal Injury coverage beyond what the Plus
     Ten provides today can either move to a Summit policy or have their
     Homeowners policy endorsed with the Personal Injury endorsement.

Council’s input

   ♦ Central should consider developing a more comprehensive Homeowners
     enhancement endorsement.

Central’s response

   ♦ The Central Mutual Summit® policy has been our flagship Homeowners product
     for many years and our preference is to keep Summit front and center. We
     reinforced this recently by adding eight new coverages to the policy as well as
     enhancing a number of existing Central Mutual Summit® coverages.



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Council’s input

   ♦ Will Central consider becoming a market for motorcycles—not so much as a new
     business market but for current Central customers who have these toys?

Central’s response

   ♦ This is not in our plans at this time. However, we will continue to monitor this
     growing market.

Council’s input

   ♦ Central should consider writing monoline Personal Umbrellas.

Central’s response

   ♦ The pricing for our Personal Umbrella program is based on the premise that
     Central also insures the underlying automobile exposure. The majority of the
     underwriting expense in evaluating the umbrella exposure is tied to the
     automobile exposure. By requiring the auto insurance as underlying coverage,
     that expense is retained in the auto policy and allows us to keep our expenses (and
     as a result, our premiums) lower for the Personal Umbrella program. We do not
     intend to begin writing monoline Personal Umbrellas.

Council’s input

   ♦ Central should consider offering additional package credit for writing HO4
     policies.

Central’s response

   ♦ We have already begun this process. As a first step, we’re filing package credits
     for HO4 policies when they’re written with the auto. We want to not only
     encourage HO4 policies, but also encourage packaging them with the automobile.

Council’s input

   ♦ Council recommended the following action points that would help Central reverse
     its negative Dwelling policy count trend:

                     a. offer more competitive rates
                     b. offer an enhanced Dwelling policy
                     c. allow more than four units on a single Dwelling policy
                     d. allow standalone Dwelling business, particularly for Blue
                        Streak agents
                     e. soften the ITV requirement from 100% to 80%
                     f. Be open to writing Dwelling policies that, though
                        owned by LLC’s, are true personal lines-type exposures


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Central’s response

   ♦ In years past, our Dwelling book has experienced mixed results. However,
     Dwelling has done very well for us four out of the past five years. We are
     increasingly comfortable at the prospect of opening up for more Dwelling
     business and will take the ideas Council rendered into consideration as we look
     for ways to profitably grow this important line of business.

Council’s input

   ♦ Some customers don’t always opt to rebuild after a total loss. Central should build
     a “cash out” loss settlement option into its Summit endorsement.

Central’s response

   ♦ The policy already allows the insured the option to not rebuild. The insured has
     the option to settle the loss on an ACV basis. We also allow the insured to use up
     to the replacement cost of the structure to purchase a replacement home.

       To provide “cash out” settlement above ACV or what the insured actually spends
       for replacement of the home would lead to an increase in the moral hazard.

Council’s input

   ♦ Policyholders sometimes question the value of Summit, Plus Ten, Auto Plus or
     other enhancement endorsements when the premium charge is shown on the
     declarations page. Please consider removing the premium charges from the
     declarations.

Central’s response

   ♦ We’ll consider this request.

Council’s input

   ♦ As a valued-added service, Central should provide its customers with copies of
     any high-value inspections it conducts. Agents can use this as an additional
     selling point.

Central’s response

   ♦ We like this idea and will work to develop it.




                                           8
Council’s input

   ♦ Central doesn’t allow Restricted Performance Vehicles in its Premier or
     Advantage tiers. If the driver is a mature operator, Central should have no
     reluctance to offer them preferred pricing.

Central’s response

   ♦ We will consider this request and make changes as needed on a state-by-state
     basis.

Council’s input

   ♦ Central’s boat and recreational vehicle pricing is not as competitive as it could be.

Central’s response

   ♦ We will continue to monitor the competitiveness of our boat and recreational
     vehicle program and make changes as warranted.

Council’s input

   ♦ Central should provide deeper discounts for customers who choose the highest
     deductible options.

Central’s response

   ♦ Although our experience by deductible does not suggest we should offer
     additional discounts for higher deductibles at this time, we will evaluate this
     request in each state as we conduct competitive analysis.

Council’s input

   ♦ Central should provide a discount for jewelry that’s protected by an in-home safe.

Central’s response

   ♦ We’ll consider this request.

Council’s input

   ♦ Break out the update list by subproducer code.

Central’s response

   ♦ Our goal for the update list is to make it available electronically on the internet.
     When we develop the electronic version of the update list, we’ll consider this
     suggestion at that time.


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Council’s input

   ♦ Develop a “Paid In Full” discount to be applied to Personal Lines policies.

Central’s response

   ♦ We will study this request.




                                          10
                          Blue Streak Program Suggestions


Central is very interested in keeping the Blue Streak program as fresh, vibrant and
meaningful as possible. During Friday’s Open Forum, the Council spent time discussing
the program in general. As “homework,” each attendee was asked to think about and
provide:

(a) three things you would like to keep about the program;

(b) three ways the program can be enhanced.

The Council’s feedback regarding Blue Streak is published below. Central will consider
these suggestions going forward as we continually work to keep the program meaningful
for you, our trusted Blue Streak agency partners.

Keep

♦      Blue Streak Seminar training session
♦      Blue Streak Advisory Council
♦      Priority service that Agency Services provides
♦      Priority claims service
♦      Quarterly Blue Streak Reviews
♦      Blue Streak claims draft authority
♦      Blue Streak Seal of Confidence
♦      Blue Streak’s personal touch
♦      frequent visits with the underwriter

Enhancement Ideas

♦      Restore the separate relaxed underwriting criteria for Blue Streak agents
♦      Special President’s Circle qualification criteria for Blue Streak agents
♦      Increased commission for Blue Streak business
♦      Increase the amount of co-op funds available to Blue Streak agencies
♦      special Blue Streak rating credit to assist in retention
♦      waive photos of Dwelling risks for Blue Streak agents if the home is < 40 years
       old
♦      add small incentive plans for CSRs and support staff
♦      consider holding Advisory Council meetings twice per year
♦      hold more regional Blue Streak meetings
♦      Provide a Blue Streak bonus if certain established goals are met
♦      Continue to develop marketing materials for exclusive use by Blue Streak agents




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