I have several rules that help me with this process. In this article, I'll share them with you.
Rule No. 1: Never rely on prospects to supply you with loss runs or count on obtaining them easily from their incumbent agents. Just think: If you were the broker of record, would you politely help another agent steal your client? A request for loss runs waves a huge red flag in front of the incumbent, signaling that it's time to start blocking markets.
Rule No. 2: When submitting requests for loss runs, never sit back and patiently wait for them to arrive. They won't. Send that second and third request right away.
Rule No. 3: Don't rely on the carrier fax numbers you acquired from A.M. Best, Kirschner's or other directories. Most of these numbers are for corporate headquarters, and if you use them, your request will end up in a black hole. Instead, call the carrier and ask for the fax number for the specific line of coverage and state for which you need loss runs.
Rule No. 4: If the prospect is sending the loss run request, invoke Rule 2 and don't count on timely delivery. Continually follow up with the prospect. The sooner you know the loss runs haven't arrived, the sooner you can send the carrier second and third requests.
When you have no choice but to obtain loss runs from the prospects themselves, be prepared for additional obstacles. Have you ever had this happen? A prospect tells you they've had no claims since opening their business. They hand you last year's loss runs as proof. The following exchange ensues:
Prospect: "Why can't you just use last year's loss runs?"
Agent: "The insurance industry requires that current loss runs be ordered every year, even if you've had no losses, because carriers worry that a claim was opened retroactively."
A good tactic for explaining to clients why you need fresh loss runs is to draw a correlation with their personal auto policy. Explain that when quoting personal auto insurance, you always have to order a fresh motor vehicle report. You can't use last year's report, because things are always changing. Commercial insurance is the same way: We have to order fresh loss runs every year, even if there were no claims.
(Incidentally, who came up with the "90-day stale rule" on loss runs?) This is the unwritten rule among underwriters that any loss run printed 91 days before policy expiration is invalid. I once got a call from an underwriter asking for updated loss runs because the ones I'd provided were printed 93 days before expiration. Talk about frustrating--especially since it was like pulling teeth to get them in the first place!)
Even experienced agents can learn to make obtaining loss runs easier on themselves. They can do so by taking the process out of the prospect's hands and placing it their own. Here's how: Bring the insured loss-run request letters with space provided for copying the client's letterhead. Have the insured sign each letter and fax them while you wait. Very important: Put your agency fax number in the letter so the loss runs come directly to you, and not via the insured. Sometimes, however, carrier loss-run departments will fax only to the insured's number on file. In this case, see Rule 4.
Another method is to have the insured provide you with their letterhead, along with permission to sign and fax loss-run requests on their behalf. When I use this option, I always fax the insured copies of what I've sent for their records.
Many of the steps outlined in this article can be automated. A software product that I use for this purpose is called LossRunner (www.lossrunner.com), which is published by Appulate. (Full disclosure: My brother, who runs Curry Computer Technology, has referred a number of his clients to Appulate. Therefore, his firm is listed as a "technology partner" on its Web site. Listed as "industry partners" are the Insurance Agents & Brokers of the West, The Alliance of Insurance Agents and Brokers, the Western Insurance Agents Association and the Independent Insurance Agents of Texas.) Regardless of how you go about the task, however, obtaining loss runs is going to be increasingly important during the soft market. I hope this article has given you some ideas for improving how you carry out this task. Scott Curry is the sales manager of ISU Curry Insurance in Pasadena, Calif. Scott's father, Michael Curry, founded the agency, which primarily handles workers comp coverages, in 1973. Scott can be reached at Scott@isucurry.com.