One of the major problems prevalent in the insurance industry is the problem of missing information and how heavily it costs to the insurance organization in terms of the loss. Whether the data loss was a result of the producers never obtaining the information or the policies that were deposited with incomplete information, all this leads to multiple follow-ups, and strenuous renewing policies. In spite of the various reasons, excessive follow-ups are mandatory. Although a follow up in case of missing information may not take more than ten minutes, in the larger picture it does really cost the agency a lot more.
Loss of Time
On a careful analysis of one of the agencies at random even if the average time per follow up was 10 minutes and the typical account renewal follow up comprising of a minimum 5 follow-ups a good 50 minutes was spent on a follow ups per account. For the agency that had close to 1054 renewal accounts the renewals usurp approximately 878 hours annually which account for more than a half of a full time employee’s time at work annually. A full time employee at work spends close to 1610 hours of work per year, which amounts to close to 35 hours per week, and 46 weeks per year to account for time vested in vacation, sickness time and other leaves.
Loss of Money
The agency where the study was conducted and concluded had an average fully loaded compensation or salary for an account manager or underwriter. This salary is close to $45,000 annually in addition to a 30% bonus, commission, payroll taxes, bonus tax included, 401k match, employee insurance, etc. close to a whopping $58,500 per annum. They are responsible for the follow up at $36.34/hr. At this rate, the cost of follow up would amount to $1,906.32 annually.
In our upcoming segment, we will discuss what can be done to reduce the resource loss in follow-ups.