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!