Study 5 Communication and Service Skills - LO

Question 1

Explain how time management and file management assists agents and brokers.

Answer 1

• Time management, file management systems, and cyber security allow agents and brokers to be more
successful in their business dealings with clients and insurers

• Effective time management includes
  o Research
  o Organization
  o Identifying tasks and goals
  o Prioritizing effectively
  o Minimizing duplication and interruptions

• File management systems help with documenting dealings with clients and insurers
• Abeyance systems remind agents and brokers of tasks that must be completed or followed up on
• PIPEDA governs intermediaries’ protection of clients’ personal information
• Follow company procedure for computer and data protection to minimize the risk of a cyber attack that could leave clients vulnerable

Question 2

Describe effective communication including techniques for telephone, written, and in-person discussions, and the use of social media.

Answer 2

• Always use professional, courteous, and informative communication with clients
• Effective communication involves active listening skills—do not just impart information

• Intermediaries deal with different communication styles and tools, including
o Formal letters
o Quick concise emails
o Phone or face-to-face conversations
o Unconventional methods of communication with clients who have disabilities or challenges
communicating

Question 3

Outline communication techniques for handling difficult situations.

Answer 3

• When a client is dissatisfied with a situation, communicate with them in a courteous and empathetic
manner
o Acknowledge the insured’s emotions without becoming emotionally involved
o Apologize sincerely and promptly when required
o Avoid laying blame
o Gain the client’s aid in finding a solution
o Document all interactions

• Advise the client and confirm when information will be available if the resolution requires input from
others

• Brokers and agents should
o Show what they can do for the customer (rather than saying what they cannot do)
o Manage any unreasonable expectations that could lead to further client dissatisfaction

Question 4

Describe the renewal process from initial identification of an expiring policy until final binding, including all relevant documentation required.

Answer 4

• Effectively communicate with clients to make the renewal process smoother—they are an important
part of an intermediary’s business

• Renewal documents
o Produced by either the intermediary or the insurer o Can be sent to the client or to the broker/agent and then to the client

• Renewal or expiry lists assist intermediaries in prioritizing their renewal efforts
o Review the client’s needs through both files and client discussion o Look for any changes in client insurance requirements due to changes in lifestyle or business o Approach the client with any new coverages that have been introduced o Assist in filling out any new application required

• Some policies are automatically renewed; others are manually renewed with new information
• Non-renewal (insurer’s option) o Can be an opportunity to assist client with other insurers
• Non-renewal (client’s option) o Intermediary must determine why and see if account and relationship can be salvaged

Question 5

Compare and contrast the need for and process of various payment plans.

Answer 5

• Agents and brokers have fiduciary responsibility to insurers and insureds
• Intermediaries collect premiums for the insurers and confirm that the monies are placed into trust accounts for the insurers to be paid

• Terms of premium transfer are set out in contract—insureds can pay in a number of ways:
o Whole premium up front at beginning of term
o Monthly payment plan set up directly through insurer or a finance company
o Broker’s payment plan (including payment by credit card)

Question 6

Outline typical coverage and document-handling procedures and the information included in a typical cover letter.

Answer 6

• Policy documents are the evidence of the contract of insurance
o Intermediaries should review them when they are issued to confirm their contents are what has
been requested
o Discrepancies must be resolved or the insured advised of the difference

• Handle coverage request with care
o Change requests can uncover other needs of the insured

• Deliver documents with a cover letter and an invoice (if necessary)
• Only appropriately licensed persons can sign policy documents or cover letters

• Encourage insureds to look over the issued documents, even if the intermediary has reviewed the
documents with them

Question 7

Describe how insurance contracts are terminated, including the difference between pro rata, short rate, and flat cancellation.

Answer 7

• An insured can request cancellation at any time
• Insurer may cancel in accordance with the statutory/general conditions setting out the rules they must follow when cancelling

• Methods of cancelling
o Pro rata (the insurer must reimburse the return premium [unexpired policy term])
o Short rate (the insured receives a return premium that includes a penalty for early cancellation)
o Flat (insurer or insured do not renew a policy; any pre-paid premium is totally refunded without
penalty)

• If insured requests cancellations, get a signature from all named insureds
• If insured decides to cancel policy within a very short time from policy start date, they may face a minimum retained premium