Good grades on reports: accurate data input and training are among the solutions for agencies struggling to produce accurate management reports.

When agency computer systems were developed more than 20 years ago, they had the capability to produce management reports, albeit limited at the time. The systems recorded accounting information, carrier premiums, and client policy and coverage information providing basic reports about the agency's financial condition and customer base. As these systems have advanced, they now offer a host of standard reports, and the ability to customize reports and manipulate extracted information.

Now managers can analyze information related to accounts, carriers, books of business, product lines and many other areas of an agency's operations. They can review individual employee productivity and activity to prioritize work or assess training needs. Management information also can provide detail about the cost of accounts, profitability of each line of business, and growth and retention of each segment of the business. New business, retained business and lost business can be analyzed by producer, service person or department, as well as for the overall agency.

Although the reporting capabilities of these systems are robust, we rarely find agencies fully benefiting from them. In some agencies, managers do not have access to run their own management reports. Information technology staffs, believing they are protecting the agency database, limit access and insist on running reports for the managers. As a result, report generation is slow and limited in scope. Today's systems allow the IT department to give access only to certain system data. Therefore, managers can be allowed access to information relevant to their departments, but not to information outside of their departments.

Some agencies do not use system reports because they do not know how to generate them or have found the reports to be inaccurate. Rather they record data in separate Excel spreadsheets, or even worse, keep handwritten lists, which must be entered into spreadsheets. These methods not only waste time but can also provide the opportunity for employees to manufacture data.

The first step in producing accurate reports is to require consistent and accurate data input. This means anyone using the system must update and correct data on an ongoing basis. It also means all stages of the account's life cycle, including submission information, should be in the system. If certain staff members keep information outside of the system, in paper files or other software programs, there will be gaps in the data.

The next step is to provide managers with report generation training, either through the vendor or user group. We have found most managers need at least a refresher course in producing reports. With some systems, report generation is relatively easy. With others, it is a complex process, requiring advanced training. In this situation, the agency may need to designate an employee as an expert in report generation. This person would develop and save reports in a menu so managers could run them as needed. Managers also may need training in Excel. Ideally, reports should not be printed on paper, but downloaded into Excel. In this format, the manager can easily re-sort the data for further analysis.

Even with good data and training, we often find inaccuracies in reports. One common problem is that two seemingly identical reports will show different numbers. One reason may be the data source. Most systems have at least three options for reporting premium and commission: written, booked and annualized. So it is important to know where the data originated.

The application of incorrect commission percentages is another common problem for systems. This problem can be easily rectified by designating an employee to maintain accurate carrier commission tables in the system.

Agencies struggle with two specific reports: new business and lost business. The new business report can be tainted because renewals being re-marketed to a different carrier are coded as new business, rather than as existing accounts. Similarly, policies in jeopardy of cancellation for nonpayment often are prematurely coded as canceled. As a result, they show up on lost business reports. With the extensive number of codes in today's systems, it makes sense to create standards for using them.

The ability to produce good automated management reports is an important agency capability during any market cycle. But it is particularly important in a soft market when good information can provide insight into opportunities to enhance revenue and further increase both sales and service productivity.

Sharon Cunningham, a Best's Review columnist, is president of Business Management Group, a management consulting firm based in Hartford, Conn. She can be reached at [e-mail].