IRMI Update—Issue #198
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
January 21, 2009
In This Issue
Colleague,
Three out of four large companies around the world say that they are dissatisfied
with one of their provider relationships and are considering changing their
brokers or insurers. That finding is one of the key results of Greenwich Associates'
2008 Global Large Corporate Insurance Research Study, which was based on interviews
with more than 1,500 corporate risk managers worldwide last summer.
The study reveals that corporate insurance relationships are under unprecedented
scrutiny as companies cope with the global economic downturn. In particular,
insurance brokerage relationships are coming under close review. Increasingly,
brokers are expected to be partners that work in the client's interest by providing
the best possible advice, service, and pricing over the long term. The results
of the study show that many brokers are falling short on that mark, and companies
are becoming much more willing to hold their brokers accountable for recommendations
they championed in the past.
The good news is that Greenwich Associates' research suggests that even insureds
who are dissatisfied with their current providers are open to making efforts
to improve their relationships. This means that providers have a real opportunity
to retain troubled relationships by quickly identifying and remedying the source
of client dissatisfaction.
Do you agree that many agents and brokers are falling short with respect
to the service they provide? If so, what are the most common deficiencies? How
should risk managers evaluate their brokers' performance? What should brokers
do to identify where they are falling short in meeting client expectations?
How can a souring relationship be saved? [See
reader
responses].
Thank you for subscribing to IRMI Update. Please recommend it to your colleagues.
Have a great day.
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
International Risk Management Institute, Inc.
Be Proactive in a Tough Economy—In light of
the current economy and its effects, the following are some things to consider.
-
With layoffs and less work, do you have vehicles that are out of service?
See if you can adjust the premium or get credit.
-
If your actual payroll and revenue are less than your "expected premium"
on your policy, then try to get your audit as soon as possible. Schedule
it now to take place right after policy expiration.
-
Consider that lower payrolls throughout the industry will have an effect
on modifier calculations in your state and in your particular class codes.
And don't forget that lower worked hours can affect your OSHA Incident rates.
Plan for changes as it might take a year or so for things to equal out in
the "numbers" at the NCCI and Department of Labor.
-
With less work, there will be fewer total workers compensation claims.
This is already occurring in the area of medical-only type claims. Attorneys
for injured employees are getting more aggressive and working harder on
smaller claims as their caseload has decreased. Additionally, with less
work, there could be an eventual increase in fraudulent claims.
-
Insurers have to understand that there is less work for employers to
put injured employees "back to work" or on light duty.
-
Watch for changes in the coverage from your independent contractors,
subcontractors, and other business partners. They may change insurers and
coverages to lower their own costs. Be diligent on securing insurance certificates
and additional insured endorsements from them. Find out what changes, if
any, need your attention and action.
-
Watch for cutbacks on safety. Already, in tight times, safety and risk
management personnel may be some of the first to go.
There will be many cause and effect realities caused by the state of the
economy. Consider these changes, prepare, and react as quickly as possible.
By: Frank Keres, President
Construction Risk Associates, Inc.
Lake Bluff, IL
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
IRMI Update risk tips. We'll acknowledge your contribution as we did for
Frank.
The January issue of
The Risk Report,
"Managing Corporate Risks from Cell Phone Perils" by Kevin Quinley, outlines
the importance of addressing the intelligent use of cell phones by risk management
programs.
For IRMI Online subscribers
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recent additions with links to the articles.
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