IRMI Update—Issue #179
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
March 5, 2008
In This Issue
Colleague,
More and more, wrap-up programs, also known as CCIPs and OCIPs, are being
used for large commercial construction projects as well as much smaller residential
projects (for general liability insurance). Implemented and managed correctly,
wrap-ups can save a great deal of money and facilitate the management of project
risks. On the other hand, when done improperly, a small mistake can lead to
major problems.
We asked our speakers for "Wrap-ups: Beyond the Basics from Concept to Closeout"
to put together a program that would give even knowledgeable risk professionals
new insights into how to do wrap-ups right. Last year's program was highly rated,
and we used participants' suggestions to ramp it up to an even higher level.
If you are a risk manager thinking about implementing an Owner-controlled insurance
program for your company's next project, a general contractor considering a
CCIP, or a developer looking at a GL-only wrap, this seminar is for you. Naturally,
agents, brokers and underwriters working in the field will also benefit from
the learning and networking.
Our expert speakers, Jeff Masters, and Mike O'Neill, have also substantially
rebuilt their popular seminar on insurance for construction defect. They, too,
are moving to a more advanced coverage of the material and invited Pat Wielinski,
author of Insurance for Defective Construction,
to add his expertise to the forum. It will be an extraordinary learning event,
particularly if you attend both seminars together.
These seminars and two brand-new programs on construction contract risk management
will be held in San Diego, Miami, and Dallas in March and April. Get out of
the cold and join us for a great learning opportunity. Find all the details
on our Seminars page.
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
New Day's Kind of Know-How—They say knowledge is power. New Day Underwriting
Managers LLC could not agree more. Knowing where to find the right information
and assistance to help clients manage environmental and construction-related
professional liability risks helps agents and brokers make a powerful statement—they
are committed to finding the best risk management solutions for their clients.
Learn how you can enlist New Day Underwriting's knowledgeable, professional,
and responsive team to enlist their risk management experience, industry knowledge,
and technical underwriting expertise to help your clients.
Our customers—truckers—face constant risk exposures every minute they are
at work. One common problem for fuel carriers is the mixing or misdelivery of
diesel and gas. One carrier decided to overcome the misdelivery problem by implementing
a fairly simple procedure. During deliveries, a green cone must be placed out
near the underground tank hole when diesel is being unloaded. No other hoses
are to be out or tank lids opened until the diesel delivery is complete. The
focus on these mixes has greatly reduced their loss costs, and overall mishap
frequency is down due to the general increased awareness of the misdelivery
problem.
By: Rich Bren, VP & Partner
Southwest Truck Insurance Group
Phoenix, AZ
rich@swtruckins.com
www.swtruckins.com
SUGGEST A RISK TIP: Send us a practical tip (less than 300 words) for identifying
and managing risks, buying insurance, managing claims, or filling gaps in insurance
coverages. Submit your
risk tips. We'll acknowledge your contribution as we did for Rich.
We have recently updated a number of the reference manuals in the IRMI library
and published new issues of
The Risk Report
and
Captive Insurance
Company Reports. To make sure you don't miss any of this new information
take 30 seconds to scan the "What's New" summary page.
For
IRMI Online and Print subscribers
For
SilverPlume Sage subscribers
There are over 1,000 risk management and insurance
articles on IRMI.com. Below you'll find summaries of some recent additions
with links to the articles.
Thousands of Fortune 1000 risk managers and the nation's leading insurance
professionals use
Risk Financing.
This indispensable and easy-to-understand reference explains the traditional
insurance rating plans and alternative funding options for your organization's
risks. See
a detailed list of topics covered and how it can eliminate risk financing
uncertainty.
In IRMI Update 178, readers were asked whether
they conducted "exit interviews" when clients turned elsewhere. Below are some
of their thoughts.
-
The concept works. I have used it over the past 10 years and have obtained
great results. Most of the time, it is bottom-line dollars that are involved,
though a lot of times, I am not dealing with the decision makers when I
lose an account, and by sitting down with them, I have gotten the negative
reasons why they have gone and was given the opportunity to point out why
they should of stayed. Once I have evaluated the reasons they pointed out
for leaving, I follow up with a letter to the account that we have corrected
our deficiencies and, in most cases, have been able to return to the proposal
table the following year.
—Joseph A. Staniewicz, Partner, Huckleberry, Sibley
& Harvey Insurance & Bonds, Vero Beach, FL
-
I completely agree with this, and it is a great concept. The problem
I face is with our CSRs and their ability to ask the appropriate questions.
Usually they ask why they are leaving and the basic answers are: found a
lower price, have sold our home, type answers. On the commercial side, we
do find out as we try very hard to keep the client. But unfortunately, during
the current market, price is looked upon as the primary decision factor,
even though there may be a world of difference in coverage. And if we can
speak with the insured and explain the differences, we usually retain the
account.
—William H. Clark, Agency Manager, Ayer Insurance,
Plymouth, NH
-
The exit interview for departing clients is fine in principle. In practice,
losing an account can be a traumatic event. The most frequent causes are
poor service or inability to deliver competitive premiums. This then leads
to reprimands, prejudice, or dismissals. Many times this will involve not
only the line personnel, but also senior management, who may not want to
confront their shortcomings. I spent over 20 years with national brokerage
firms and rarely saw an exit interview. When it did take place, it quickly
turned into a witch hunt.
The idea of doing exit interviews is a good one in concept. From a practical
standpoint, in a small brokerage, the reason for the loss of a customer
or a major policy is usually quite obvious. In my firm we don't have a formal
process but share the news by collective e-mail. We acknowledge the loss
and explain the reasons. If the reason is a market that we don't represent
or have access to, we'll talk about that by an exchange of e-mails. Depending
on the specifics of the loss, this discussion can get lengthy and is often
productive.
I suppose the concept could be useful if it is done without fear of retribution,
and the information gained is used to make all involved wiser and more effective
in their jobs, then it makes sense.
—Bob Menninger, President, Commercial Insurance Research
LLC, Manchester, NJ
-
Never thought of doing this type of thing with a lost policy or insured,
but think it has a lot of merit. It would have to be short, something that
could be completed in a few minutes with a self-addressed stamped envelope...or
e-mail return!
—Anne Youngberg, Accounting/Admin., United Agencies
La Verne, La Verne, CA
-
Often, clients leave because they think they have found a better deal
someplace else. Once the dust has settled, the policies have been issued,
and the service begins, they often find that is not the case, and the grass
isn't always greener on the other side. However, many clients are too embarrassed
at that point to come back and admit to you they made a mistake. I believe
it is incumbent on the former agent to reach out with periodic letters to
their lost valued clients, and let them know that they were an important
and valued client to the agency, the agency was sorry they felt it necessary
to leave, and most importantly, if things do not work out as planned—we
would welcome you back! Inviting people to come back after making a decision
to leave removes the burden from the customer of admitting having made a
mistake, and reinforces the valued relationship between the old agency and
the client. Unfortunately, sour grapes often gets in the way of this process
with producers who becomes upset over losing an account, rather than wishing
the insured well, and leaving the door open should the insured wish to come
back.
—Steven D. Lyon, CPCU, CIC, CRM, AAI, ARM, CRIS,
Principal, Lyon Consulting Services, LLC, Pequannock, NJ
-
Your comment on exit interviews triggered my recall of an event that
occurred many years ago when I was a Risk Manager. The incumbent broker's
performance had been getting more and more lax, but the fee had been steadily
going up. I finally told the Account Exec. that I had made a decision to
move to another broker. The next day the head of the office called and asked
if I would meet him for breakfast to share the details of my decision. Over
breakfast, I detailed the negatives that had led to my decision. He finally
said, "We deserved to get fired." On the way to our cars following our meeting,
he shook my hand, looked me in the eye, and said, "Well, now that you're
a prospect, let's play golf next week." True story!
—Barney Mercer, Principal, Mercer & Associates, Dallas,
TX
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