The Quest for the Perfect Proposal

by Pat Alexander on February 5, 2010 · 2 comments

I find the proposal to be a hot topic with every agency I work with or audit.

The issues are often:

  • Our staff has to spend too much time updating and editing the information.
  • Our system does not generate a proposal so we do it in documents outside the system.
  • Our system does not provide the correct data to the proposal.
  • There is a defined standard proposal but not everyone likes it or uses it.
  • We cannot agree on a standard proposal so everyone has their own format.
  • The producer finds errors in the information while presenting to the client.
  • Each producer wants their proposal done is a specific way.
  • Wants a different order than the standard.
  • Wants to exclude certain sections or pages of the standard.
  • Wants different colors or fonts than the standard.
  • Everyone misses the errors in the information until there is a claim and an Errors & Omissions claim.

Does any of this sound familiar? Does any of this worry you?

Bound Document.jpg

I believe the two most important issues that an agency must address are:

  1. That the agency has a standard proposal and everyone will use the same proposal without amending the format, colors or fonts. Additionally, none of the required pages are sections will be eliminated from any proposal. There might be special proposal for niche accounts; however, these must abide by the same rules and the standard proposal.
  2. The data for the proposal must be correct.

Resolving these two issues resolves most of the other issues I have listed at the beginning of this article. A proposal to your client is one of the most important documents your agency will produce. The proposal communicates to your client or prospective client a number of messages. Your agency’s image and standard of professionalism are the first messages the client receives. How your product is packaged is important. The document does not need to be overdressed but it needs to be well dressed. Lack of consistency is a big issue

I find with many proposals. The document should be the same font throughout. There may be words or phrases that are bolded or a different size, but it is a much easier read and better look by using same font throughout the document. If there are page numbers, they should all be in the same location. An example would be that all page numbers are in the left corner at the bottom of the page or in the center of the page. If you have page numbers, each page must be numbered and the number in the same location. Have someone other than the creator look for these types of inconsistencies. Has the document been spell checked, grammar checked and proofed for correctness? This may all seem like a no-brainer to you. However, I have read numerous completed proposals that have inconsistencies in formatting, spelling and grammar errors or sentences that just do not make sense.

A proposal should tell pertinent information about your agency and what you do. There should be several disclaimers or statements that are in every proposal produced by your agency. Consider some of this:

  • Wording about your state’s Admitted/Non-Admitted/Guaranty Fund information, a statement explaining that this information.
  • Indicate the Coverages Proposed is Derived From Information the Prospect/Insured Furnished.
  • Use a general, “not-the-actual-coverage” disclaimer.
  • Indicate that policy specimens are available
  • Include Best’s Rating for each carrier presented in the proposal and their authorized(admitted) or unauthorized(non-admitted) status.
  • In addition, other such statements as are appropriate for your agency. Consult with your E&O insurance carrier for their requirements or suggestions.

The proposal should contain the correct data about the client. Data, data and more data. I seem to discuss data in almost every article I write or presentation I give. Nevertheless, I am going to discuss it and its importance again. This is huge. Consider that the proposal contains the various schedules of coverages that the client has insured through your agency. Examples would include the list of vehicles, drivers, equipment, properties, etc. If the data in any of these schedules is inaccurate what is the client or prospect going to think? The current client is thinking, should I continue to do business with this agency? The prospect is thinking, these people do not seem to know what they are doing so I should not consider them. Neither of these is good. So where and how do you get the correct data for the proposal. The short answer is your agency management system. The longer answer is a bit more involved. The agency must set standards for the data that is retained in the agency management system. Those standards must be implemented and audited to ensure that the expected results are maintained. When an agency initially receives the data on a prospect, all of the data is entered into the agency management system. Once the prospect’s coverage is written, the data is verified to be correct at the time of the proposal. Each time the client makes a change to a policy, the proper endorsement process is used to update the agency management system and request the endorsement from the insurance carrier. In doing this the data in the agency management system will be the correct data. I find that the biggest problem with data is that the system’s endorsement process is bypassed. Endorsements are requested via email or online and the agency management system is not updated. Often there is an excel spreadsheet maintained with the schedules and this may or may not be updated as the policy period goes on. If the data in the agency management system is correct, the data merged into the proposal produced using the agency management system will be correct.

For those with an agency management system that does not produce a merged proposal there are additional challenges in this process. However, you can still have a standard proposal in a Word template and secure the correct data from the agency management system by using it correctly. Proposals will always require a certain amount of editing once terms and conditions are received from the insurance carrier(s). However, the more thought out and defined the standard proposal and the better the data, the less editing needed.
The bottom line here is that each agency should have a standard proposal. Everyone should use the proposal as it is defined. Each agency should have defined data standards. Everyone should be required to maintain data in accordance with these standards. If you are not using your agency management system to its fullest ability to produce your proposals, take steps to correct this as soon as possible. If your agency management system will not produce a proposal including policy coverages and schedules, and your agency produces proposals on all accounts, maybe it is time that you look at other systems.

What are your agency’s challenges with producing the perfect proposal?

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