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Addressing the Pain Points of Third-Party Insurance Collections

Addressing the Pain Points of Third-Party Insurance Collections | Brown & Joseph, LLC

Navigating the complexities of insurance collections, Brown & Joseph has identified a trend — carriers are experiencing a lot of issues working with third-party collection agencies.

Instead of acting as an extension of their business, these third-party agencies are causing more of a headache for insurance carriers, which is leaving a bad taste in their mouth about the collection industry.

Chris Gellings, Manager of Market Development for Brown & Joseph, keeps his finger on the pulse of the insurance market.

He speaks with collection and credit managers from insurance carriers about the latest trends and ask questions about what they are seeing with their business and strategic plans for 2019 – here’s what he is hearing in the insurance marketplace.

It all starts with trust.

“I’ve spoken to people who have told me they don’t trust collection agencies because they’ve had a terrible experience with them in the past,” Chris says.

“One man told me he’d worked with an agency once and there was so much distrust. He noticed the agency hadn’t provided any reports or remitted payments for a long time, so he went directly to the insured and found out the agency had been withholding funds!”

You should be able to trust that your collection agency is going to represent you well and operate within the law.

Otherwise, your brand, reputation and bottom line could suffer.

Knowledge and experience are key.

“Another huge issue I run into a lot is that other agencies don’t have the industry knowledge Brown & Joseph has,” says Chris.

Instead of being segregated into specialized teams, it’s basically a free-for-all.

Most of the time, other collectors aren’t even able to explain to the consumer WHY they owe money in the first place, which understandably sets off alarms for consumers that they’re being scammed.

If someone called you out of the blue demanding money, you’d want to know why – you’re not just going to pay up with no background information whatsoever.

“Instead of a kid in a hoodie working on a robo-dialer all day every day, our recovery professionals are just that – professionals!” Chris says.

They know the ins and outs of insurance collections and not only understand how the debt was incurred but can make sure the debtor understands, too.

As Wayne Vidzicki once said, “Their job is to resolve the debt, not just collect it.”

Good communication leads to good debt collection.

“One credit manager at a major insurance company told me he hasn’t even heard from his current collection agency in months. They had no idea how the agency was performing or how much money they were gaining or losing,” says Chris.

Naturally, you shouldn’t have to chase down a collection agency just to get an update on your account.

Good communication is the key to successful debt recovery. | Addressing the Pain Points of Third-Party Insurance Collections | Brown & Joseph, LLC

Your collection agency should be in contact with you on a regular basis, providing you with updates on your accounts.

Furthermore, your collection agency should be able to provide you with valuable insights and business intelligence on your accounts.

Up-to-date licensure and compliance are a must — especially for insurance collections.

Another huge issue within the collection industry is the use of illegal tactics like threats and harassment.

At the very least, your agency should be 100% compliant with the Fair Debt Collection Practices Act (FDCPA), which is a federal law that limits the behavior and actions of third-party debt collectors.

Additionally, not all collection agencies are licensed to operate in every state!

In fact, almost half of the U.S. collection agencies are NOT licensed to operate in all states, yet they do anyway.

This is a one-way ticket to a lawsuit and lots of trouble you don’t need.

You get what you pay for.

If your collection agency’s website looks like it’s from the 90s, how up-to-date do you think their technology will be?

We continuously invest in new technology like predictive dialing, virtual audits, and more.

“Some people I talk to just want to shop around for a collection agency to see which one has the lowest fee, because that’s all they care about – they’d rather pay a lower fee and risk not getting any money back at all,” says Chris.

“It’s all about getting a return on your investment.”

But remember – you get what you pay for.

Companies that charge more for their services can invest more money into improving their training, technology, service offerings, etc.

Never underestimate the importance of brand protection.

“I just spoke to someone who said they don’t work with an agency right now and are very reluctant to work with a third party agency because they’re very concerned about how their brand will be represented,” says Chris.

This is a huge issue – your brand is everything, and it should be protected at all costs.

“There’s a cultural difference between a collection agency with debt collectors and an insurance premium recovery agency with recovery professionals.”

“Our recovery professionals aren’t sitting on a robo-dialer going after debts from 17 different industries. That’s just a pushy debt collector with no industry experience or background knowledge. They don’t understand the files they’re working,” he adds.

All of Brown & Joseph’s accounts are assigned based on industry and approach, not just balance size.

“There’s much more ownership. You’re held accountable for your cases and you learn quickly what works and what doesn’t.”

A little competition is healthy.

Recovering balances that would have been written off as uncollectible is the cherry on top.

Even 1% or 2% more makes a huge difference in your bottom line, but most people I talk to just don’t seem to care – they’ve come to expect a certain percentage from their current agency, and they’re content with that.

There are some people out there who will sit on an invoice until they get a collection call. They want to keep the money in their account for as long as possible to collect interest, so if you never call, they’ll never pay.

And people will begin to realize that they can take advantage of your business without consequence.

Other agencies will try to steal you away from your current agency.

At Brown & Joseph, we know it’s normal to use several different agencies at once.

If you’re already using a collection agency, fantastic! You should be maximizing your chances of successful collections.

Our second placement program allows you to “test drive” our capabilities without interrupting any process your group currently has in place.

Just give us the accounts returned by your previous agency as uncollectible and we’ll work our magic on them!

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