Organization and Management of the Field Force

Owing to the weekly collection of premiums at the homes of the insured, it is necessary to organize the agency system in industrial insurance with special reference to the needs of the business. To facilitate the efficient handling of the enormous volume of details necessarily connected with weekly collections, the company's territory is divided into districts which are usually made to coincide with the leading cities, although in the very large cities like New York, Philadelphia, etc., several districts exist. Each district is supervised by a superintendent who has a number of assistant superintendents and numerous agents under him. The agents are expected to collect all outstanding premiums, and, according to the system, each has assigned to him a "weekly debit" which represents the difference between "the premiums of the total number of policies issued to a particular agency and the premiums of the total number of policies lapsed by reason of death, transfer or other causes".

Generally speaking an agent is expected to collect each week about $60 or $70, although in many instances the amount is considerably larger. In addition to this collection service, he is also required to solicit new business on both the industrial and ordinary plans. It is therefore essential, if agents are to be given sufficient time for the solicitation of new business, to restrict the amount that an agent is required to collect as well as to concentrate such collections as much as possible within a limited area. We are informed that "the collection system has been so completely developed that in the case of well managed industrial companies the average collection percentage runs almost 100".

All weekly collections are entered by the agents in a so-called "collection books", these entries corresponding to those made in the policyholder's receipt book. Once each week the agent must also render an account to the company which furnishes a complete statement of all payments and arrears. Moreover, to discourage lapses as much as possible through the efforts of agents, commissions on new business are allowed only on the net increases, i.e. if the new business obtained in any week should represent a weekly premium of $1.00 and the terminations of old policies for reasons other than death or transfer should represent a weekly premium of 25 cents, a commission will only be allowed on the difference, or 75 cents. It is also customary for the companies to require their agents to write a certain amount of new business.