By Paul Schreir
From AA&B June 1935
If local agents are to keep themselves "out of the red" they must be in good collectors. Too many agents pay too little attention to collections - a branch of our business which is very important.
We have found in our agency that personal attention, plus persistency, is productive of the best results. When an account is slow, some one from our office calls on the first of the month following that in which the policy is written. If no payment is made, the calls are repeated at intervals of from ten days to two weeks until either some payment is made on account, or the policy cancelled.
We try to make these calls in a friendly manner, frequently selling now business when making the collection. By friendly, we do not mean "boot licking." We are selling the client a service for which he must pay, and the sooner this idea gets across, the less trouble there is in getting the money.
We have used all of the well known methods of collecting-such as form letters, personal letters, stickers on bills, a personal message in red ink across the bill, and telephone calls. With all of them you will get a small percentage of results, the telephone probably ranking next to personal calls in results.
An invoice accompanies every policy that is mailed or delivered by our office. A large number of people understand that the purchase of insurance is a cash transaction and about 25 per cent of all policies we write are paid for within thirty days. We have found by experimenting, that the best results are obtained in mailing or presenting statements between the fifth and tenth of each month, instead of on the first. Since most insurance is sold to business people, it is well to give them an opportunity to make their own collections. The "early bird" frequently misses the worm and has to return for a second visit.
Many of our collections are made when the insurance is sold, either in cash, notes or by a definite promise to pay on a certain date.
For the ten years prior to 1930, our losses from bad accounts averaged about one-half of 1 percent of our total premium volume per year. In 1933, the year of the bank failures, we suffered our greatest "bad debt" loss, which figured a little more than 3 per cent.
One of the essential requirements for an agent to be oa good collector in his home town, is for him to be a good paymaster. Unless in his personal transactions with the local merchants and others he establishes a reputation for himself as being a person who pays promptly, he cannot demand this quality from his customers.
