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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