Underwriting Memo Effective March 9, 2009
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March 6, 2009
Keeping policies in
force is more important than ever before in today's difficult business
environment and we are seeking solutions to keep more in force and minimize the
number of cancellations. From an agency point of view, marketing studies show
that it is far more cost effective to retain a current client compared to the
high cost of acquiring a new one. We know you are seeking ways to remedy losing
clients and increase retention. We believe you'll agree that it would be a
smart move to work together in this direction, so we would like to share with
you steps we are taking to support this effort. Procedurally these changes will
assist our clients with additional reminders regarding their payment due dates,
an extended grace period after policy cancellation and easier reinstatement
requirements upon cancellation.
For more than two
years, InsTrust has used an automated telephone service to dial clients
scheduled for renewal and provided them with a recorded courtesy message
reminding them to renew the policy and avoid coverage problems. Starting in the
next two weeks we will also call clients to remind them about monthly payments
as well. We've found that our renewal rates have increased so we expect a similar
result for courtesy monthly payment reminder calls. We will encourage them to
visit your agency to make their payment.
We have modified the
wording and timing for the billing notices we send clients. Starting with
policies written as of Monday, March 9th, we will issue an initial automobile
insurance bill approximately 22 to 25 days before the due date and each installment
thereafter. This is a few days earlier than we have been mailing in the past
which will provide a window of time to send a reminder notice. The second
mailing will be a courtesy bill reminder and it will be sent approximately 15
days before the due date of the payment. Our belief is that by providing a
bill, a reminder and a telephone call all before the policy cancels, we'll
reduce the number of cancellations and the resulting negative consequences
which affect our clients, your agency and our company.
However
for policies that remain unpaid after the cancellation date we are taking
valuable measures to assist clients and your agency with keeping them in force.
We are offering a grace period of
20 days from the cancellation date and during this 20 day period, we will
reinstate all polices with just the payment amount which is due. We will not
require a signed Statement of No Loss and we will not charge a
reinstatement fee. Good news bears repeating! We will not require you to obtain a
Statement of No Loss and we will not charge a reinstatement fee.
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However, if the policy is
reinstated 21 to 45 days after cancellation, a signed Statement of No Loss
is required, but instead of faxing it to us as you have had to do in the
past, we are asking now that you simply hold the Statement of No Loss in
your office and file it in the insured's file. The change from the past
procedure is that our underwriters will reinstate the policy without
having to have already received the Statement of No Loss. We do require
that your agency continue to secure a signed Statement of No Loss from the
client and we will have periodic audits to ensure policy is being
followed. This procedural change is in response to your request.
- Extended Reinstatement Period to 45 days - As
you will note from above and until further notice we are extending the
available Reinstatement Period to 45 days from the date of cancellation, given
the client makes the necessary payments to bring the balance on the policy
current and a signed Statement of No Loss is obtained and kept in file.
We
firmly believe that these new procedures and opportunities for continuing
coverage will result in better long term retention of our clients business.
Two
other changes are going into effect March 6, 2009.
First,
because of the changes shown above, we will increase the reinstatement fee from
$10 to $20.
Secondly, we will now spread the $15 policy fee
across all six payments instead of collecting it in its entirety along with the
down payment. While not a significant difference, we are hopeful that you and
our clients will find a benefit from this additional relief..
As
you can see we are doing everything within our power to provide clients with
more opportunities to keep their coverage in force and make their payments to
the best of their ability, mostly with no negative consequences. We hope you
will share this message with all agents in your office so they can be informed
of these changes and our commitment to helping clients.
We'd
like to say again that we value your loyalty to our company and your
cooperation as we move forward with creating the best auto insurance program in
the state. We know that we share the same goals and we all want to serve
clients to the best of our abilities and prosper and grow as we do so.
We
know we are living in turbulent times and we sincerely wish you all continued
success. Working together, we will succeed in 2009.
Your Friends
at InsTrust
marketing@instrustinsurance.com
866-665-2410
www.GoInsTrust.com |
