Making a comeback: thanks to automation and improved products, personal lines no longer play stepchild to the larger commercial lines.

Many agencies have focused on commercial lines as a growth strategy because commercial accounts generate higher income and are considered more cost effective to sell and service. Personal lines accounts have been sold largely as an accommodation for commercial lines customers or for existing customers making referrals. As a result, many personal lines departments lack management attention and are seen as a stepchild to the larger commercial lines departments.

Even where there is some attention, personal lines departments have struggled with retention against direct writers' advertising campaigns that promise price savings. New business production has been hampered by a slow quoting process and by the need to access multiple Web sites to produce the best quote. Although automation has brought some benefits to personal lines, customer service representatives have actually found themselves doing more work in recent years. As a result, servicing existing customers has had a higher priority than selling new business.

But personal lines is making a comeback. Some carriers have developed the ability to segment customers and better match risks with loss patterns. This approach allows for more sophisticated underwriting and better pricing for a wider range of customers. The new pricing tiers give independent agents the ability to compete on price with direct writers and to exceed the customer's expectations with their strong knowledge and excellent service.

Not only have auto and homeowners products improved, but new automation capabilities have shortened quoting time and policy and endorsement turnaround time. Most carriers have excellent personal lines download which saves customer service representatives countless hours of input. Recent advancements have made it possible to access carrier Web sites through the agency management system. Taking that to the next level, the information can be uploaded now from the agency management system directly into the carrier's system to produce even faster quotes. Agencies now can exchange electronic information with their carriers and retrieve electronic policies which cm be attached to the client file on the agency management system.

Given these changes, the time is right to develop a sales effort for personal lines. Before launching that effort, however, the department should be set up for maximum efficiency so the customer service representatives have rime to spend on new accounts.

The place to start is a review of procedures to make sure the staff is using automation tools appropriately Implementing a completely paperless environment is no longer a dream but a reality for any personal lines department. Customer service representatives may need to be retrained in automation tools and in new procedures, such as handling customer requests while they are on the telephone, rather than taking notes and making changes later. Clearly defining procedures for direct claims reporting and carrier customer centers helps representatives understand that it is all right to delegate those responsibilities.

Once the department has made the transition to a more efficient environment, agency managers need to develop a sales approach. Will the customer service representatives have a clear sales role or will the department add a personal lines producer? If the representatives are to take on a sales role, they will need sales training and new job descriptions which outline their sales responsibilities. New producers will need a sales plan, coaching, and regular meetings to monitor progress. In either case, goals should be set for revenue production and for daily, weekly, and monthly activity, such as calls made, quotes and sold policies.

The department also will need a marketing plan and a budget for marketing activities, such as purchasing lead lists, post cards and postage, setting up a booth at a home show, ordering "giveaways" for real estate agents, and placing advertisements. The lead generation process is equally important and should include referral generation. Producers and customer service representatives should be encouraged to provide leads. Existing customers, as well as centers of influence, should be regularly contacted for leads. The key is to develop a plan with detailed activities and monitor it.

The plan is not complete, however, without addressing compensation. Personal lines producers should have a plan which rewards them for achieving a new business goal and not for servicing customers. Customer service representatives who sell should have a plan which rewards them for growing their books so they are encouraged to retain accounts, as well as sell new policies. And finally, personal lines managers should also have a bonus plan which is tied to growth, productivity, and profitability of the department.

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 al [e-mail].