IRMI Update—Issue #194
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
October 22, 2008
In This Issue
Message from the Editor
Colleague,
If, like most risk and insurance professionals, your organization provides
you with a subscription to IRMI reference services in SilverPlume Sage, IRMI
Online, or perhaps in print, you may have access to a vast storehouse of risk
finance information, tactics and strategies. Our flagship reference on this
topic is Risk Financing, and you'll be
pleased to learn that we just released the annual update of some of the most
important information in the manual. This includes the loss development factors,
payout profiles, and U.S. claims cost indexes (often called the "Masterson Indexes").
Be sure to use the latest factors when working on your loss picks and other
risk finance analyses during the first quarter 2009 renewal season. (If you
subscribe in print your supplement, #99, may still be in the mail.)
Other titles in the IRMI risk finance library include:
- Captives and the Management of Risk
- Captive Practices and Procedures
- Captive Insurance Company Reports
If you don't subscribe to these publications, learn more about the
IRMI risk finance library
here.
Will you be at the IRMI Construction Risk Conference in Las Vegas next week?
If so, get ready for some great educational sessions and networking with 1500
of the top construction risk professionals in the world! I look forward to seeing
you there.
All the best,
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
Risk Tip
Get the Most from Your TPA—With high case volumes,
increased responsibilities, and a competitive environment where profits are
razor thin, adjusters are pulled in many different directions. This makes it
a challenge for risk managers to ensure that their files receive the attention
they demand and deserve. The "trick" is making sure your files reach the top
of the stack so that the adjuster handles your cases first! I've seen adjusters
move heaven and earth to help clients they respect and admire, who are easy
to work with, who help the adjusters do their jobs more easily, and who appreciate
the tough role the adjuster plays in bringing all the players into agreement
on claim resolution. As a risk manager, you can stand out by complimenting good
work—to the adjuster's supervisor or higher; by getting to know your adjuster
in such small things as a birthday or an anniversary card; or to get the adjuster
to identify with your company, give the adjuster a logo item from your company.
In my experience, it's not the grand gesture that makes the relationship, but
the everyday little things you can do to make the adjuster want to do things
for, and with, you!
By: Elise M. Farnham, CPCU, ARM
President,
Illumine Consulting
Grantville, GA
*Elise is a new IRMI.com Expert Commentator. Be sure
to check out her new
Personal Lines Claims article.
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 Elise.
What's New in Captive Insurance
Company Reports
The October issue of Captive Insurance Company
Reports features two case studies: "Raffles Epitomizes Group Captive
Evolution," focusing on the largest heterogeneous group captive in the world,
and "Captive for Protecting Bonus Plans" on how Adidas AG has used its captive
to protect its operating businesses from unexpected prize money payouts.
For
IRMI Online subscribers
For
SilverPlume Sage subscribers
New Expert Commentary
There are over 1,100 risk management and insurance
articles on IRMI.com. Below you'll find summaries of some recent additions
with links to the articles.
-
Disclosing Policy Limits in Liability Claims—Tim Ryles asks whether
failure to provide personal policy limits information in the absence of
litigation establish a case for bad faith.
-
Care, Custody, or Control Exclusion in the CGL—Craig Stanovich
describes how small changes in circumstances can result in totally different
outcomes as to whether property is in the care, custody, or control of the
insured.
-
Hurricanes, Tropical Depressions, and Floods: Risk Management and Insurance—William
Austin examines coverage needs and expectations that must be addressed pre-loss,
not after the loss event through litigation.
-
Personal Lines Property Loss Adjusting—The steps involved to
achieve claims closure involve knowing the policy, the contract, textbook
answers, and alternatives. Elise Farnham explains.
-
Taxes
and Insurance Captives—Michael Mead reminds us that captives
should not be formed solely for tax benefits. That said, he relates some
tax code exceptions with cautionary notes.
Do Your Contracts Properly Protect Your Company?
Contractual Risk Transfer from IRMI
is the industry's most thorough explanation of how to allocate risks in all
types of contracts. You'll save hours of drafting time with "boilerplate" insurance
clauses. Use the state-by-state analyses of how the courts interpret hold harmless
and indemnity clauses to bulletproof your clauses. Explains when and how to
require additional insured status. Plus, many more strategies to protect your
company! Learn more about
Contractual
Risk Transfer and subscribe today.
Your View—Insurance Training and Continuing Education
IRMI Update 193 asked whether
the industry's apparent inattention to training and education is an issue of
concern and what individuals can do to assure they continue to develop expertise
even when their employers don't require or provide training assistance. Below
are some of the responses from readers.
-
The dilution of training at the company level has concerned me for some
time. They seem to train by teaching just enough to do a specific job and
little or nothing on a continuing basis. Agency training seems to vary from
none to very good. The agency problem is attracting and retaining teachable
people not lack of willingness to train them. Many young employees have
too much going on to sign up for more than the minimum. We need to find
and promote the available education offerings definitely including online.
I hesitate to say we need to reward it in salary, because there are superstars
here and elsewhere who do not have designations. But a one-time payment
per completed course makes sense. Those who require or encourage continuing
ed should but won't toughen the requirements. Why should a commercial lines
account manager be able to satisfy requirements by attending a homeowners
class? Yes I know it can be relevant, but wouldn't it make more sense to
concentrate on topics that enhance work performance?
—Seeman Waranch, President, Insco Group, Inc., Virginia
Beach, VA
-
Early in my insurance career, I was fortunate enough to work for someone
who became a mentor to me. He encouraged me to pursue an education in insurance.
That was in 1983, and I have never stopped pursuing it. These days, I pack
a lunch and do the majority of my studying during my lunch break. (This
also saves money!). Last year, I became involved in my local CPCU Chapter
and am now serving as a director on the board. It is rewarding to encourage
people to continue their education in insurance and exciting to help people
become the best that they can be. No matter how you are perceived in your
particular workplace, your insurance education is something that no one
can take away from you. The thing I like the most about insurance education
is that it helps me better serve the independent agents that depend on me.
—Patty Black, CIC, CPCU, AU, AIC, AIS, Commercial
Underwriter, Grange Insurance, Columbus, OH
-
One of the ways in which individuals can continue to develop personally
is through self-study courses, networking, and attending any free risk management
and/or insurance seminars offered in their local areas.
—Gertrude M. Branch, Senior Risk Management Analyst,
American Red Cross, Washington DC
-
I think that education is the key in any endeavor, but especially in
the changing world of insurance. I have asked many brokers who want to handle
our account as well as carriers who might want to write our business what
they're doing for educating, training, recruiting and retaining a new generation
of insurance and risk management professionals. The response that I've gotten
varies—one national broker told me that it was difficult to hire those just
out of college because they were supposed to be productive to the bottom
line within a quarter of being hired. This seems quite short sighted to
me. Another one has an in-house "school" that requires 2 years of attendance,
I think.
I don't know how anyone could be in this business and not feel the need
for continual education. I've been in this business for 35 years and work
diligently at keeping abreast of current events and current trends in the
industry. I don't think that anyone—broker, risk manager, underwriter, loss
control, or claims person—can exist very long in a vacuum.
—Becky Walker, Risk Manager, D E Harvey Builders,
Houston
-
Absolutely, education must be a focus in this day. All one has to do
is to look across the aisle at the mortgage banking industry to see what
a lack of knowledge in one's product can do to the company, much less the
economy. Add to that our efforts to be taken more seriously as an industry,
especially from the agency side, to be viewed truly as professional experts
in the field of risk management. Well guess what? Our efforts at elevating
our image have been successful to a large extent, and with that come the
responsibility to be able to perform to the level we have advertised. Education
and skills development are the only ways to meet the new expectation in
the marketplace.
—Eric Pike, Sr. Underwriter, Personal Lines, Penn
National Insurance, Greensboro, NC
-
One thing that has always struck me as odd is the lack of education direct
from companies. I would like to see companies offer more direct training
for their agents. General online training is good to advance certain knowledge,
but it lacks a further in-depth guide to what agents (especially those newer
to the industry) need and what companies are looking for.
—Robbie Ryan, ACSR (P/C), CISR, Principle/Producer,
The Ryan Insurance Agency, Rowlett, TX
-
Being an "experienced" insurance industry professional, the failure to
train and support continued educational growth within the industry is simply
astounding. When I entered the industry with Aetna C&S, we spent one year
in our local office learning how every department functioned and interacted.
During that one year, we had to pass home study courses on personal and
commercial insurance. After successfully completing the one year AND the
two courses, you went to Hartford for your 4-6 week intensive education
in your specialty (agents went for 8 weeks to learn the business). Then,
you were an associate underwriter in your office for a year, under the supervision
of a seasoned underwriter. Aetna always encouraged you to get your CPCU,
AU, etc., and rewarded those who were successful. Two people at Aetna who
really influenced me were Pete Raymond, my Underwriting Manager, and Al
Reese, my Branch Manager. I learned a lot about the business and professionalism
from them, and, unfortunately, this is what is missing from the industry
today.
It is amazing to talk to underwriters in many companies who are Senior
Underwriters with 1 to 2 years' experience who barely know how to spell
insurance. The only influence they have is cash-flow. Profitability is a
bad word, and all they want to know is "What price do you need?" They have
no idea of loss picks, loss analysis, underwriting for profit or impact
studies. Without education (there have only been roughly 62,000 CPCU designations
attained by the tens of millions of employees in the industry since the
designation was introduced), this industry is doomed to continue to its
mistakes. Poor underwriting, little underwriting profit (you have to underwrite
for a profit, not count on your investment income), and huge market swings
will continue.
—Jim Kahn, CPCU, ARM, Risk Manager, Lackawanna Insurance
Group, Wilkes-Barre, PA
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