Insurance customers have had to live with poor quality products and services for a long time. The QIC/RIMS Quality Scorecard continues to show our dissatisfaction with brokers and insurers. So why is quality so difficult to attain? Nobody wants to take the time to wrestle with the problem. People seem to think that the monster is way too big and complicated, and that we just have to accept poor service, overly complicated policies, frequent errors and high turnover. I disagree.

As the assistant treasurer of a large global manufacturing company, I am responsible for borrowing, investing, bank relations, hedging, pension management and risk management-insurance. I demand service. I need a broker who understands my business, responds quickly, has high ethical standards and works hard to keep our business.

I have been fortunate to find the Insurance Management Company, a regional broker based in Erie, Pennsylvania. I feel strongly enough about IMC that I nominated them for the Arthur Quern Quality Award, which they received at the 37th RIMS Annual Conference & Exhibition in Dallas last year. But now I want to go further. Awards are one thing, but in order for quality to take hold in our industry, it is important for those who strive for it to have models. It is for this reason that I would like to share some of the things that so impress me about IMC.

A Prime Example

The annual RIMS conference is a feast of information, education and networking. But in order to reap the benefits, you have to have the energy and the will to make the most of all the resources.
The associates of IMC have a battle plan for the conference. First, they have a meeting to grid off the exhibit hall and classroom areas, and assign territories. Then they attack. They visit every exhibit booth and gather materials; they attend as many classes as possible and collect the handouts; they also gather materials for any classes they've been unable to attend.

Back at their office, they sort the material and lay it out. They flag any information that will help their clients, and send it to them. Clients are invited to visit and browse for anything of interest. The associates then file the material to use it to get a different perspective as challenges present themselves.

This unique thirst for information helps IMC provide quality service to their clients at every possible opportunity. They put this drive to work in understanding my needs.
They know my job, my company, my peers and my frustrations. And they intervene when possible to make my insurance decisions rewarding ones.

Exceeding Expectations

IMC believes that quality has several levels. First, there are needs that the client expects to be met, no questions asked. Then, there are needs that the client requests directly. Once these levels have been reached, service beyond expectations is possible.

How does IMC know that they are delivering quality? They ask. Their clients are requested to complete annual report cards, with ratings from 1 to 5 (5 being the highest) in eight categories. The following are IMC's 1998 ratings:

Enthusiastic Service (4.57)
Assistance in Identifying Exposure to Loss (4.38)
Knowledge and Professionalism (4.56)
Clear Answers to Questions (4.38)
Promptness in Responding to Requests (4.53)
Courteous Attitude (4.87)
Clarity of Billing (4.16)
Overall Relationship (4.48)

 
The Value of Value

IMC places special emphasis on reducing the client's costs while maintaining insurance integrity. They aim to achieve this through the elimination of errors, reduction in expenses, significant improvements in processes, and unique client service.
 

1. Is your broker getting you the lowest renewal pricing without sacrificing quality? Does it provide you with a concise historical record of your renewals?
2. Does your broker clearly outline its expectations prior to renewal? Does it inform you of pricing and enhancement goals for the renewal?
3. Does your broker try as hard as possible to free you from the menial tasks of your job? Does it look as the renewal from your point of view?
4. Does your broker focus on your satisfaction or is it simply trying to bring the renewal or a particular problem to a conclusion?
 

5. Does your broker publish an annual report card that rates its performance? Does it allow you to rate their service, response time and overall relationship?
 

My renewal packages are a joy to behold: professional, neatly organized in three- ring binders, tabbed, with color-coded exhibits. There is an historical record of renewal premiums, limits and insurers. Exclusions are clearly illustrated along with enhancements and recommendations.

Before every renewal, IMC communicates its objectives for pricing and enhancements. They actually tell me the pricing they are striving to achieve. They don't always deliver, but I know that they are fighting for me. I am privy to their conversations with underwriters on enhancements and pricing, their successes and their failures.

 
My broker understands that delivering value leads to high levels of customer retention. Value leads to more positive attitudes among customers and suppliers. But surprisingly few brokers and insurers actually understand or measure this relationship. In the 1999 Quality Scorecard, risk managers gave the overall industry a 67 in satisfaction, a 70 in performance and a 72 in loyalty. If satisfaction is low, then value is low and a reverse situation unfolds: high turnover, high costs and poor attitude.

Getting to Quality

Quality is a process. IMC has been able to achieve their success because they were open to change and development. Ten years ago we asked them if they had continuous quality improvement processes. John Bloomstine, IMC's president, replied: "Lord Corporation is a manufacturer of quality products. You demand quality in suppliers-you must be satisfied because we have been a supplier of risk management services and insurance to Lord for years." We took the principals through one of our plants and showed them process maps, check lists, graphs and charts. They appreciated the tour, but felt that because all of their clients had different needs, the quality processes they were seeing could not be applied. We responded that by standardizing those elements they could. They would become more efficient, and could pass the savings on to customers.

This conversation led to a string of quality innovations at IMC. They hired quality consultants to mentor them. They never gave lip service to the process. And their work paid off. In 1993 they earned the City of Erie Quality Award; in 1994 they received the Pennsylvania Keystone Quality Award.

Components

The following practices are also used by IMC to enhance quality service and deliver value.

Communication-If my broker can't immediately respond to one of my questions, he asks if it can wait until after the next morning's meeting. All associates at IMC meet every work day at 8:15 a.m. to discuss the previous day, any special opportunities for service and what is expected on that day and in the near future. I get the benefit of the entire IMC team thinking about my problem.

The morning meeting is also a source of ongoing training and education. Information important enough to be communicated immediately to clients is identified. A similar process is used to disseminate insights and concepts gained by associates from video and audio presentations, industry specific presentations and conferences.

Teamwork-This is IMC's basic operating principle. One person cannot start a job and then pass it along to a colleague without further interest or involvement. All associates are members of the team; within that team focus groups are formed as projects arise.

Process Mapping-Associates at IMC are empowered to continuously suggest improvements in processes and practices. After team buy-in at the morning meeting, suggestions are immediately implemented.

Posting flow charts and graphs throughout the office and making processes visible encourages speedy improvement. IMC's internal and external customer processes are made visible through thirty-eight master flow charts.

Correct Policies-An ongoing project at IMC is the timely delivery of correct insurance policies and endorsements. One third of IMC's time is spent correcting errors in insurance policies. For six years they have been tracking insurance company errors. Improvement has not been spectacular. Some companies are making an effort, though. IMC informs me that they are requesting insurance companies issue renewal certificates with the proper changes in lieu of issuing entirely new policies. IMC can't continue to spend the time reviewing the same errors year after year, I can't afford to pay for it and soon insurance companies may figure out they can't afford poor quality.

Conclusion

This is more than an ode to my broker. Yes, I am thrilled with IMC, and believe that while we take a stand on quality that reveals a depth of dissatisfaction, it is fair that we commend those companies that achieve it. But most of all, I submit this as an example, not just for brokers and underwriters, but for all of us to follow. Quality is a goal worth pursuing not just in words, but in deeds as well.

Reprinted with permission from Risk Management magazine, April 2000, pages 43-46.