How to Professionally End a Client Relationship
Have you found yourself questioning whether it’s possible to "part ways" with a client? Perhaps there are clients whose calls you dread or who consistently present challenges in communication or behavior. You may wonder if it's appropriate to suggest they find another agent.
The Short Answer
Yes, it is acceptable to end a client relationship. However, this should be handled professionally, considering timing, communication, and potential impacts on your reputation.
Reasons to Consider Ending a Client Relationship
There are several valid reasons for an agency to request nonrenewal of a policy, independent of company underwriting guidelines:
- Market Focus: Targeting specific market segments with defined standards for account size, liability limits, or optional coverages.
- Profitability: Maintaining a profitable book of business and adhering to stringent underwriting guidelines.
- Personal Factors: In smaller communities, awareness of personal factors (e.g., excessive alcohol consumption) increases risk.
- Behavioral Issues: Clients who display disruptive or abusive behavior toward staff.
Best Practices for Ending a Client Relationship
- Timing:
- Provide notice well before the policy renewal date, giving clients ample time to transition.
- Clear Communication:
- Clearly state the reasons for ending the relationship, suggesting that another agent may better meet their needs.
- Supportive Resources:
- Offer assistance by suggesting they obtain an agent of record letter and provide necessary documents like loss runs and policy schedules.
Internal Business Considerations
- Criteria Development:
- Develop internal criteria to identify which clients align with your agency’s goals and which might be better served elsewhere.
- Standard Communication Templates:
- Use templates for communicating with clients who don’t meet your agency’s criteria.
- Reputational Risk Management:
- Assess potential reputational risks posed by dissatisfied clients who could influence others.
- Profitability Analysis:
- Evaluate the client’s profitability and explore improvements before deciding to end the relationship.
Ending a client relationship should be a thoughtful decision to maintain a profitable and harmonious business. If legal concerns arise, especially related to past Errors and Omissions (E&O) claims, seek advice from legal counsel prior to notifying your client.
Mallory Cornell, MBA
Vice President, Virtual Agency Solutions at the IIAW
www.virtualagencysolutions.com