Check and Double-Check: How to minimize errors and maximize customer satisfaction

There is an old saying in the military: “expect what you inspect.” Basically if your staff knows that you will be checking they will be more likely to do it the way that they have been told.

There is also the aspect of the double check. Any task by humans is subject to error. An inspection of important transactions increases the likelihood of finding and correcting errors before they go out.

Also true is that sometimes there is a flaw in a system or employee’s training that can be discovered and corrected.

The quality control or QC aspect is where the rubber hits the road for most agencies. The policy that goes out should represent the coverage and terms that were agreed to as part of the sales process. Critical items such as named insured, limits and coverage grants must be discovered and corrected before a loss occurs. After a loss the matter is often up to courts to decide and the damage to your reputation is not worth it.

Internal audit processes offer you a thorough and effective way to review and manage your agency.

Some of the considerations that are important are:

Most agencies already do a QC review of names, limits and forms when a policy is received from the carrier. Often this is done by the staff member who made the original request. The policy is compared against the requesting application, variances identified and an endorsement requested. The variances are then pointed out in a letter to the insured and a copy of the endorsement with a binder issued with the policy.

A practice to consider is having a separate department review incoming policies. The rationale for this is to ensure that any problem areas are detected and corrected. The basis is that if some one missed something once they may well miss it twice.

In addition to policies files should be considered for audit review as well. Exposure analysis checklists, proposals, applications and correspondence to the client should be reviewed. Where all policies should be checked, agency principals generally select a random set of enough files to convince them that they have viewed a reasonable representative sample of work. Remember that that work in aggregate represents how the world views you and your agency.

The impact or consequences of errors are the essential decisions to be made by any manager. Some of the most common approaches are to first view errors as a training issue. By categorizing the number and type of errors a training plan can be developed. Often you can find that your agents association has training plans and courses available for the specific concerns that you discover.

Continued errors may require disciplinary action but even here the documented steps taken will provide you with protection against a charge of improper termination.

Putting together your internal audit program can be an organized way of delegating something that you are already doing. By assigning tasks and setting up a program for using the information you may increase morale in many ways.

First, the other associates in your agency may not have ownership. They do have a vested interest in the success of your agency and in not seeing it damaged by mistakes.

Knowing the consequences of errors can alleviate a great deal of stress on the part of the staff. This is particularly true where the consequences are training and correction of systems problems.

Having a way of managing corrective actions can also be of benefit. If the only way errors are discovered is by your observation, then the only way that they can identify a problem is to “rat out” a fellow employee. This may cause some to avoid addressing the problem. But is these same employees are the same ones who have to correct the errors this may be a stressful burden in itself.

Internal audit systems can be very simple or very complex. Some agencies inspect 100% of every file and some do a random spot check. Depending on the needs of the agency these systems can be set up by consultants and sometimes by agency principals or key staff.

No system can guarantee 100% perfection. An ongoing and effective internal audit program can provide your agency with critical information about staff and operations that will assist you in keeping it healthy and constantly improving.