The Soft Insurance Market is DEAD! Long Live the Soft Market!

Call it collusion, call it conspiracy – or call it a maneuver  to stem a tide of diminishing profits, but Insurance carriers are universally raising Property & Casualty rates.

The days of premium reductions are over. Carriers believe that they must both rebuild their bottom line  and reduce their loss ratios.

No-one is immune and now, more then ever, you need to be advised by your broker of market conditions, coverage changes and program solutions.

Some keys to a successful renewal......

(1) Understand the market conditions and budget accordingly. Anticipate and understand the repercussions of potential coverage and limit changes.

(2) Early commencement of the renewal process - Gathering of underwriting material, loss forecasting, benchmarking, claims reviews, etc

(3) Risk Management and Loss control - Ensure that YOUR risk has a clean and presentable profile.

(4) Tell the story - Your broker should understand your business and have a distinct expertise with companies like your own so as to make the underwriters understand the nature of the risk.

(5) Market leverage - A broker with a large volume of business or capacity in a specific vertical is much more likely to use his/her leverage to get the optimal price.

Simple and Innovative Ways to Control your TCOR (Total Cost of Risk)

Many finance people have trouble figuring out what their Total Cost of Risk is - let alone how to control or reduce it.

Often, your current insurance broker may not have the means nor even understand the means to control and reduce TCOR.

The following are a few simple areas where a broker can in partnership with the finance team effect the TCOR and thus Growth, Cost Containment, Asset Protection and utlimately Business Continuity.

* Coverage and policy audits: To limit the company's exposure to un-covered claims, know what you are covered for and better, what many coverage enhancements are available.

* Benchmarking and CAT Modeling: To ensure that the company is not overinsured OR underinsured - and thus exposed to unpaid claims.

* Claims reviews: Monitoring reserves, safety and back to work initiatives, fraud awareness can go a long way in mitigating loss ratios and thus experience mods.....

* Experience Mod Audits: 90% of mod audits result in return premiums to companies. Don't let the NCCI or other agencies penalize you unjustifiably.

* Classification Reviews: A good broker will dictate to the carrier how his client should be rated - and thus charged. Don't leave it up to the insurance carrier.

* Loss forecasting: A good broker advocate with the right tools, can 'paint' a better loss picture - no matter how detrimental - to the carrier. Again pre-empting the carriers attempts to profit unneccessarily at your expense.

They NEVER Told Me I Needed THAT Coverage!!

5 Coverage’s you never knew you needed – or knew were available:

1.       Product Recall - Withdrawal........Provides expense reimbursement coverage including both rebranding and, if necessary, disposal.

2.       Cyber-liability.......The most volatile exposure out there. Think Citi, Sony and more!

3.       Crisis Insurance.......Reputation recovery; Again a reaction to the world of social network defamation and allegation.

4.       Stock Throughput......All in one coverage for distributors and manufacturers.

5.       Trade Credit.....Insures accounts receivables and enhamces a company's ability to profit and grow!

The Top 5 Reasons why I HIRED my Insurance Broker – Poll Results are IN!

Following up to my recent and very popular post on the 5 Reasons why I FIRED my Insurance Broker….

1.       Understood my business and its unique exposures – has many similar clients in my industry.

2.       Promoted a specialized program which addresses my cost and coverage needs.

3.       Provided innovative ideas and solutions – which my current broker did not – which focus on my priorities as an economic buyer. Illustrated how his/her Risk Management services and solutions could improve my risk profile.

4.       Developed relationship over time and became a trusted business advisor.

5.       Price, price, price!

5 reasons why I fired my Insurance broker – Poll Results are in!

1.       Service  issues......Timeliness and attention to detail are key!

2.       Didn’t understand my business and wasn’t pro-active in providing guidance.......I have to wear many hats; Need  a broker who can see whats down the road for my company.

3.       Didn’t comprehend my priorities.......Cost containment; Asset porotection; Contractual obligations!

4.       Other brokers asked and provided solutions  to my problems.......Under my priorities and in terms understand, show me how your products or services can help me!

5.       I felt I wasn’t valued enough – that I was a small fish........It would be nice to get a call more then once a year from my broker.

5 Keys to reducing Workers Comp Premium Costs

1.       Loss forecasting

Most insureds don't understand that they (with their broker) can control the renewal negotiation process. Loss forecasting - if to the advantage of the insured - can force a carrier to reassess his loss cost factors, loss pick and ultimately premium. In short, if I can show the carrier that my clients claims are not trending as badly as first thought, I can drive down premium.

2.       Experience Mod reviews

A no brainer, annual Experience modification reviews are successful 60% of the time in providing an adjustment and thus return premiums.

3.       Classification reviews

Are your employees classified correctly. Especially in the manufacturing industry, mis-classification can be the difference in tens of thousands of premium. Why should a clerical employee who happens to have to walk across the shop floor to get to her bosses office be classified as a shop floor employee?

4.       Quarterly Claims reviews

Your broker should be conducting quarterly or bi-annual claims reviews to analyze reserves, lag time, reporting prodedure, back to work process and potential fraud.

5.       Marketing

Many companies believe that they are 'stuck' with the State Funds due to their risk profile or because of cost. Standard carriers more and more are competing with the State Funds price wise and providing top notch service, claims handling and coverages.

What do you consider to be your Company’s greatest insurance exposure?

Cost containment, Asset Protection, Business Continuity and GROWTH!

These are the answers CFO's provided in a recent Linkedin survey with over 600 responses.

A simple insuranve program review can show where holes in a program can be that can lead to uncovered claims, inadequate limits or incorrect classification codes.

All can cost a company thousands - even millions - and make the difference between layoffs and profit and hiring!

Want to Grow your business in 2011? Trade Credit insurance offers business security!

Trade credit insurance is a business insurance product that indemnifies a seller against losses from non-payment of a commercial trade debt. With trade credit insurance in place, the seller/policyholder can be certain that non-disputed accounts receivable will be paid by either the debtor or the credit insurer.

Trade credit insurance is a financial tool to hedge against both commercial and political risks that are beyond a company's control. Balance sheet strength is ensured, cash flows are protected, and loan servicing and repayments are enhanced.

A trade credit insurance policy also allows companies to feel secure in extending more credit to current customers, or to pursue new, larger customers that would have otherwise seemed too risky.

The protection it provides allows a company to increase sales to grow their business. Insured companies can sell on open account terms which, for exporters especially, can be a major competitive advantage.

Companies invest in trade credit insurance for a variety of reasons – including:

• Sales expansion: If receivables are insured, a company can safely sell more to existing customers OR go after new customers that may have been too risky without insurance.
• Expansion into new international markets
• Better financing terms – In many cases, a bank will lend more capital against insured receivables, and may also reduce the cost of funds.
• Reduce bad-debt reserves – This frees up cash for the company. Also, trade credit insurance premiums are tax deductible, but bad debt reserves are not.
• Indemnification from customer non-payment.

A wholesaler company’s credit department had granted a credit line of $100,000 to a customer. They then purchased a trade credit insurance policy and the insured approved a limit of $150,000 on that same customer.

With a 15% margin and an average DSO of 45 days, the wholesaler was able to increase their sales to realize an incremental annual gross profit of $60,000 on just that one account.

Whats Important to a CFO?

My clients tell me that growth, cost containment, asset protection and business continuity are their biggest day to day concerns.

All of these issues can be addressed by risk management services from an insurance broker.

Examples, Experience mid and Classification reviews; Loss forecasting; Cat modeling; Collateral reviews; Contract reviews.

Utilization of these concepts allows a company to take control of the insurance process and allows for broader coverages and less premium.

Is your broker providing you solutions or just taking your premium?

The Importance of Cyberliability Insurance Coverage in Response to Hacking

A massive and growing data breach recently engulfed a swath of US corporate titans focused on consumers exposing the names and email addresss of their clientele

In what could be one of the biggest such breaches in US history, computer hackers penetrated the databases of online marketer Epsilon at the end of March.

The incident comes three years after hackers penetrated Heartland Payment Systems, a credit and debit card processor.

A hacking ring stole more then 40 MM payment cards – the leader of the ring was sentenced to 20 years in prison.

http://www.usi.biz/

Gender bias claims not slowing down

Gender discrimination claims persist as a risk for employers despite widespread implementation of company policies on the issue and greater employer sophistication in this area.

According to the EEOC, gender discrimination charges accounted for 29.1% of all charges in fiscal 2010. Since 2000, they have registered in a relatively narrow range between 29.1% and the 31.5% reported in 2000.

The total number of charges filed with the EEOC has increased 25.1% since 2000, to 999,992 in 2010, which many attribute at least in part to the economy.

- Business Insurance 2011.

They key in these matters is to coordinate with your insurance carrier for defense and settlement.

Most carriers have an approved listing of counsel – but will often approve outside counsel depending on the case. Defense costs cannot be reimbursed if outside counsel is not approved.

Regardless, settlement amounts – when applicable - should never be agreed upon unless the carrier approves. Upon selection of counsel, An ‘Indication Coverage Letter’ details the ‘rate’, as it were, at which defense costs and applicable settlements are to be settled. Carriers will not pay beyond these rates unless there are extraordinary circumstances.  

The Soft Insurance Market - 5 Things to Be Aware Of!

The SOFT Insurance Market – 5 Things to Be Aware Of

• The ‘soft’ Property & Casualty insurance market is allowing companies to take advantage of significant premium reductions but now more then ever – with the economy and companies struggling alike - its coverage protection that counts.

-         As people suffer from job losses and lower incomes, the rate of claims and lawsuits against companies increases drastically.

-         Make sure you have the right coverages and adequate limits to protect your companies assets. Don’t risk being ‘bare’ in the event of a claim – don’t let others make money off of you!

-     Work force cuts mean lower productivity, less quality and potentially more lawsuits; Are you covered effectively for your products or professional liability?

• Yes, your premiums are at all time lows, but did you also lose your coverage depth?

• At what cost to your broker or carrier are lower premiums? Are they cutting coverage corners to maintain their profit margins?

• What is your broker holding back? Do you have all of the services available?

-         In a ‘soft’ market you should be getting MORE not LESS – there is no reason NOT to have enhanced service and broader coverages.

• If you ask your broker if you have the right coverages, does he/she really know?

When you have a specialized need you bring in an expert with the specific knowledge and experience of your business that you need.

USI’s Specialty Insurance programs provide significant premium reductions AND enhanced coverages and services unique to your business.

Let the SPECIALISTS work for you.

For more information, please contact:

Richard Hyder-Slater, SVP, 212 842 3765

Richard.hyder-slater@usi.biz

Settlement Reached in Firing Over Facebook Post!

And this is why company's nowadays block their employees ability to use Facebook at the workplace......What then when they post during non-working hours?

This was the crux of the case and raises the question of free speech.

Can one express oneself in this day of social networking - without being sued for slander and libel?

Or is that to come?

The Repeal of ObamaCare?

Contrary to what you are hearing or reading , it will NOT cost billions and billions to repeal the Healthcare reform bill. This is unfortunately mis-information meant to undermine the Republican controlled congress' efforts. However, the greatest failure of the bill is that it will add to Healthcare costs.

Healthcare needed to be reformed and made more available however what the people of this nation are upset about is not the reform itself but the idea that it literally comes with a 'bill' that they will have to pay for.

The Presidents great task is now to reduce the impact of these costs and thus paint the reform in a brighter light......stay tuned folks!

J-E-T-S!!!! Jets, Jets, Jets!

What a joy to behold in watching my beloved NY Jets beat our hated rivals the Patriots!!!

Not the Same-Old-Jets anymore!

The Soft Insurance Market - and how to make it work for you even MORE!

With P & C rates at historical lows, rather then beat your broker up for even lower premiums, take advantage of current costs and purchase higher limits and broader coverage forms - now is the time!