Page 125 - The UnCaptive Agent

98 THE UNCAPTIVE AGENT

your region. They attend meetings, share information
with each other, and talk about agents. When you act
unprofessionally, you can be sure of two things: it will
get around, and it will hurt you.

Managing Your Book of Business

While it isn’t something you have to do before you start
your agency, you must actively manage the book of busi-
ness you write with each company. By book management,
I mean that you’ll want to monitor every book of business
that you have. You’ll need to do this for each company at
least quarterly: review the premium volume you’re writing,
both earned and written. Review the flow of business
you’re giving each carrier and your loss ratios. You’ll want
to look at your loss ratios quarterly and work with the
carrier to minimize ultimate loss expense because that
will affect your profit-sharing payout.
Part of the agency owner’s book management
responsibility is to be a good financial partner with
her insurance companies. This means looking out for
their interests as well as your own. Often insurance
companies will give trusted agents some degree of pric-
ing flexibility when quoting new or renewal business.
This is particularly true in commercial lines, but it also
happens in personal lines.
Some agents reflexively pass all available discounts on
to the client even when they aren’t necessary to produce
a good value for that client, and sometimes when they
aren’t necessary from a competitive viewpoint. Not only
does this reduce the insurance company’s income, thus
hurting it unnecessarily, but it also violates the agent’s
duty of loyalty to the carrier.
If you are an agent you have a principal, and the first
legal (as well as ethical) responsibility an agent has to