Have You Ever Audited Your Agency?
by Curtis M. Pearsall, Vice President, Agents' Errors and Omissions Department
Now that 2004 is in the books, I am pleased
to announce that the claims frequency of the Utica National program
enjoyed its best year in quite some time. While we hear reports of
E&O frequency going up (measured as the number of claims per
100 policies), the claims frequency of the Utica program dropped
to 8.4 claims per 100, down considerably from 2003. And to that, I
say a 
big
THANK YOU. Thank you to those agencies that took the initiative to
review and evaluate the processes and procedures within the agency
and to make changes that needed to be made.
For most if not all agencies, things have been a little hectic over the last couple of years and you may not have had the time to review your shop. Well, it is definitely not too late. Actually, auditing your agency is fairly easy. We can provide you with the tools and probably even give you a credit for doing it. The hard part is that you must be honest in your evaluation of your agency. Without this, don’t bother, as the results will not be worth the paper they are printed on. However, if you are serious about reviewing and evaluating your agency, read on.
A good internal audit process involves two distinct approaches; one is to look at the management infrastructure to examine the existence and suitability of the policies, procedures and systems you have in place, and the second is to review the files. This measures the extent to which the staff (producers, CSRs, etc) complies with the policies, procedures and systems that you, as management, have put into place, both are equally important and meaningless without the other.
| Within the Management Infrastructure piece, a review of the following areas is appropriate: | |
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| “In the File” reviews how the staff is complying with your expectations. Items such as the following get reviewed: | |
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This is going to require that you and your staff be totally honest. That may not be as easy as you think. You need to let the staff know that you can’t fix something if you didn’t know that it needs fixing. Reward their honesty because even if you “fail," that’s okay. It is okay provided that you address those areas of deficiency and develop an action plan to turn them into strengths. Your audit is like a report card. It is a score that will help you measure progress.
Running an agency is hard work and there is a lot to think about. By going through a systematic approach, you can feel that you have addressed all of the pertinent areas and know what areas to work on. It will be a road worth traveling.