IRMI Update—Issue #141
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
July 26, 2006
In This Issue
Colleague,
When I started out as a risk management consultant in the late 1970s, captive
insurers were the sexy, new risk management tools. I'll never forget my mentor
saying that they "are like oil wells; everybody needs one." (Yes, he is a Texan.)
The captive industry has certainly matured since those days, but it is still
the most innovative arena in risk management. That's why IRMI has strived to
become the premier provider of information on this vital topic.
Kate Westover's two books provide the foundational knowledge that all risk
professionals working with large commercial accounts must possess. Our reference
manual,
Risk Financing,
summarizes the laws of all the captive domiciles, and this material is updated
annually. In addition,
Captive Insurance Company
Reports (CICR) gives you monthly briefings on how to make the best
use of your captive. For example, I don't think you can find more information
on insuring employee benefits in captives than in the CICR archives (included with an IRMI Online
or Sage subscription).
If you aren't armed with the information in these publications, why not consider
adding them to your arsenal? You can learn more here:
We are accepting registrations for the 26th IRMI Construction Risk Conference,
which will take place in San Diego this October. Register now to secure a room
at the primary hotel and reserve your workshop preferences. See the agenda, speaker biographies,
and online registration information.
All the best,
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
Allow Adequate Lead Time for Competitive Quotes—If
you are a commercial property and casualty insurance buyer, you have no doubt
been frustrated that your renewal proposals are often presented 1 or 2 days
prior to the effective date of coverage. This leaves little time for analysis,
questions, and negotiation. The sad fact is that, with an eye on expense ratios,
insurance companies have stretched their underwriting staffs to the limit. Underwriters
with growing workloads struggle to deliver program quotes by the deadlines that
agents and customers establish. The best way to combat this trend is to start
the quote process as early as possible. Working 90 days in advance of your program
renewal is advisable. This allows for the extra time needed for underwriting
questions (which are not always asked immediately), loss control inspections,
and negotiation by your agent. An underwriter is more likely to meet a requested
deadline if a company's specifications and information are presented with more
than minimum lead time. So, next time an agent calls you in August to quote
your November renewal, remember: That's a good thing!
By: Joseph L. Pilato, CPCU
Maran Corporate Risk Associates
Marlton, NJ
www.mcrainsurance.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 tips. We'll
acknowledge your contribution as we did for Joseph.
There are now over 800 risk management and insurance articles on IRMI.com.
Below you'll find summaries of some recent additions with links to the articles.
Register online before August 18 and save $125 for the IRMI Construction Risk Conference in
San Diego, October 9-12. Last year's Conference sold out, so now is the time
to secure your spot. See the agenda, workshop descriptions and speaker bios here.
In the July 12 issue of IRMI Update, Editor
Jack Gibson asked if we overemphasize avoiding repeating the same mistake instead
of engaging in proactive risk management. Does this backward-looking thinking
have its basis in the executive suite? Readers express their views below.
-
Great question, Jack. The answer is brutally simple, so my response will
be short and sweet.
First, the problem is ALWAYS in the executive suite. Either they are
not demanding proactive risk management, or they are not listening when
they get it.
Second, risk managers will do what management demands or they will be
replaced. Those RMs who are proactive will go the extra mile and provide
management with what it needs, but may not have demanded. If management
does not listen, competent and progressive RMs will move on to better managed
companies.
Oversimplified, perhaps, but that's the view from here. Regards, and
keep up the good work.
—Rick Moscicki, Managing Principal, The Risk Consulting
Group, Jacksonville, TX
-
The problem is two-fold:
1) In most organizations, risk management does not report directly to
senior management, and therefore lacks the power they would otherwise have.
2) It's always been human nature to invest in loss control ONLY after
a devastating event, despite risk managers' warnings of "not if, but when."
Implementation of enterprise risk management is the answer, i.e., training
all decision makers to incorporate risk assessment/mitigation in every business
decision they make.
—Jim Hamilton, Director State League Pooling, National
League of Cities, Washington, DC
-
When you correctly observe the gross institutional difference between
prevention (foresight) and crisis response (hindsight), you have hit upon
the central organizing principle of all institutions, including IRMI.
The context supporting the ideology of business as usual is incompatible
with the requisite context for engineering design (forward looking). Pragmatic
foresight (prevention) can only be performed by masterless men.
—William Livingston, PE, Compliance Consultant, FES,
Ltd., Jensen Beach, FL
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