How to Survive A Book Transfer (And Grow)


Book Transfers Happen!  (see the last post)  

Here's my book of business...what can you do with it?
Here’s my book of business…what can you do with it?


Insurance Agencies look upon them with dread and fear.  While they will save you when a company goes bad, they feel like an unexpected E/R visit.

Thoughts of gloom race through your head:  This will overload my staff with work.  We will lose customers.  We will lose money.

Don’t get lost in the weeds of negativity.  There are kernels of truth in the fears above.  It won’t be all rainbows and unicorns, but you will survive and can grow your agency in spite of the challenges ahead.

If you think of the transfer process in three separate phases, you can attack it in smaller pieces.

Phase 1:  Negotiating

Phase 2:  Processing

Phase 3:  Growing

Phase 1:  Negotiating

There are more options here than you realize.  First ask yourself, what is more important to your agency at this moment: extra compensation or workload relief.  There are other factors you can negotiate, but these are the big ones.  You can probably get extra money and help in moving the book, but usually if you get more of one you will get less of the other, so decide about this up front.

Compensation:  Compensation is usually based off the profitability of the book.  The company will want to know at minimum: 3 yrs of loss performance, premium, and policy count.  Breaking this up by line of business helps your case as well.  The more data you can give your companies the better.

Compensation will usually come in the form of an override.  Some will pay this monthly, quarterly, or even the end of the transfer period.  I have seen examples of overrides growing over time based on how much business gets moved.  Also consider any commission differences that might exist between the carriers.

Workload:  Workload relief is often worth more than compensation.  Technology has been a big help here.  Gone are the days of printing mountains of apps, bundling them in boxes, then shipping them to a company far away.

Management systems allow a lot versatility.  PDFs of apps can be generated and emailed.  Some companies even have the ability to remotely access your system and extract the data.  If the company is not doing the data entry, most systems allow you to bridge data into company raters simplifying the process somewhat.

Decide up front who is going to do the quoting and who will do the issuing.  If a company does both, the most you will do is contact the customer with the new offer.

Rate:  Companies have gotten creative with rate on book transfer.  There’s very little difference between new business and renewal underwriting anymore, but depending on the regulatory environment in your states, companies can often match rates of the expiring carrier.

Rate matching has two components.  One option is the “meet”.  The new company will meet or match the expiring rate, and then over a determined period of time will move the customer to their own natural rate.  This varies from 1 year to indefinite.  Sometimes it be capped at a percentage, and other times it won’t.   These are questions to ask.

The other is the “meet” or “beat”. The new company matches the rate or beats it, if their natural rate is cheaper.  This can be attractive, but the same rules will apply and eventually the new carrier will get to its natural rate.

In my experience, the profitability of a book drives these alternatives, and in today’s market property is often avoided with a rate match, but auto can still be available.

Extras:  There are small things that can be considered that will help with workload.  New apps and forms are often waived.  No downpayments, discount verifications,  and waiving of inspections can be placed on the table as well.

Final word of advice:  Spend time on the negotiating phase, but don’t get bogged down with all the options.  If you have decided you to do a transfer, give yourself a decision date, look at the alternatives, and pull the trigger.

Phase 2:  Processing

Carrier Communication:  Regardless of how much work the carrier takes, there will still be work for the office.  You can divide it up between all staff  or you can assign the process to one person to be the book transfer specialist.  Assigning it to one person works the best.

The insurance company and the agency contact can develop a relationship and it provides one point of contact for both parties.

The most helpful thing you can do is to set up regular meetings between the company representatives and the agency contact.  A monthly meeting, even by conference call, is crucial in the beginning.  Mistakes and weird processing issues always arise, but these constant meeting eliminate small issues becoming big.

Customer Communication: Send out some kind of communication to customers to let them know what is happening.  Don’t worry about creating something, companies usually have templates for this.

Call customers informing them of the new product, so they are at ease with the changes.  This contact is where growth can begin to occur.

No matter how good your insurance agency is, everyone’s account rounding is less than they think.  Digging into a book of business during a transfer will bring this to your attention.  This is a perfect time to begin x-dating those extra lines of business, and you will be surprised how much you can generate.

Underwriting: Because one of your books is under a microscope, you can use this opportunity to shed any unprofitable or problem customers.

Look for problem generators or claim happy folks and refer them down the street.

This can be an opportunity to increase deductibles and limits as well.

Phase 3:  Growing

The transfer is over.  Everyone is relieved.  The book transfer specialist in the office can breathe again.  Yet, there is still opportunity!

Account Round:  In talking with the customers through the transfer, you uncovered opportunities in missing business.  If you gathered x-dates, now is the time to begin an account rounding marketing strategy.

You may find that the company can help you with this.  If you are on your own, turn this project over to someone in house, and begin mining that gold.

Lost Business:  No matter how good you or the carrier is, people will leave.  Put a lost business system in place, sending out letters or emails, providing quotes with your old data (asking for them to update), then following up with calls.

Many will find the grass was not greener with their new agent, but were too embarrassed to call you back and admit the mistake.

The growing phase is easily forgotten, because you are so relieved to be finished with the transfer. But it can create a lot of extra revenue and help you shine with your customers. The secret is to setup your process a month or two before the transfer ends, so you can launch the day as soon as it is over.

Conclusion:  Transfers aren’t as scary as your mind imagines them to be.  Think through the process, write it down, create a system, stay in contact with your people and company, and you can thrive.


Theron Mathis