How many times over the last couple of years has your agency found it necessary to move a personal lines or commercial account to a new carrier? Due to the soft market, it has probably happened fairly frequently. In most of these situations, the premiums were probably lower, resulting in a happy customer and the retention of the account.

The next question is: How confident are you that the coverage with the new carrier was at least equal to the expiring policy—or if it wasn't, was the customer aware of the fact and did he or she sign off on the differences? If you didn't identify the differences and a loss occurs that would have been covered by Carrier A but was not covered by Carrier B, your customer will not be happy and may consider bringing an E&O claim against you and your agency.

This process, referred to in the industry as the “mirror test,” is critical to avoid future problems down the road. Actually, although many carriers are reporting claims frequency as being down compared with a couple of years ago, agencies failing to perform the mirror test is an area that by itself could cause claim frequency to rise. As carriers look to differentiate themselves from their competitors, it is likely that if your agency remarketed an account to three additional carriers, there is definitely the potential for differences between the incumbent carrier and these additional markets. When looking to move an account to a new carrier from one carrier to another, the key is to identify any coverage differences, bring them to the customer's attention and seek their direction.