Over the course of any given day / week / month, producers are interacting with their customers on a host of issues. The conversation could involve discussion on how a specific coverage would work or possibly a coverage that was proposed that is being declined. The discussion could be face-to-face or on the phone.
It is extremely important (actually critical is a better word) that these conversations be documented promptly and accurately. This documentation should definitely exist in the agency management system and most producers seem to be pretty good with that. However it is also highly recommended that the essence of the conversation be documented back to the customer in some form of written communication (letter / e-mail, etc.). Something like the following:
"Joe, to recap our discussion this morning, during our meeting, you advised me that you are not interested in the umbrella proposal I recently provided. If I misunderstood you, please let me know asap.
Also, during our discussion on your building coverage, I explained to you the concept of co-insurance and the importance of insuring your building at the proper level to avoid a co-insurance penalty at the time of a loss. If you wish to insure the building for less than the 80% replacement cost number, it is important for you to understand that you will probably be penalized in the event of a loss and thus not receive the full amount of the loss. You indicated that you clearly understood how co-insurance worked. If you need a further explanation, please let me know as soon as possible".
Why do these conversations need to be documented in the system and back to the customer? Well, for one thing, there is certainly the possibility that the customer is documenting the conversation and it certainly would not look good for the customer to have better documentation than the agency producer has. Also, after a loss, there will probably be a dispute as to what the discussion involved. You will state that this was discussed…your customer will probably indicate something different.
Let’s assume that the loss is a year after the face-to-face discussion, do you (the insurance producer) want to rely on exactly what that conversation involved? Don’t rely on your memory – let your documentation tell the story.