Corporate risk managers are generally dissatisfied with the level of service they get from both brokers and insurers, and very few of these insurance providers distinguish themselves in the marketplace, a consulting service survey found.
Stamford, Conn.-based consulting firm Greenwich Associates released its 2010 Large Corporate Insurance Study survey of 683 corporate risk managers earlier this year, finding that the most notable names on the insurance brokerage and carrier side of the business are doing little to differentiate themselves from the competition.
The survey, conducted by telephone from October to December of 2009, interviewed risk managers at companies with annual revenue of $500 million or more in the United States.
Among its findings, of the 10 major insurance brokers in this niche business, only two–Beecher Carlson Insurance Services and BB&T insurance services–were rated excellent, Greenwich Associates said.
On the carrier side, FM Global and Chubb Corp. received excellent favorability ratings, the firm said.
The three major insurance brokers–Aon Corp., Marsh & McLennan and Willis Group–were rated below the median favorability rating, while Integro Insurance Broker and Lockton Companies Inc. were at the median, receiving excellent ratings from 30 percent of respondents.
Wells Fargo Insurance, Arthur J. Gallagher & Co. and Willis Group fell at or below 20 percent.
For insurers, ACE and Travelers Insurance Co. were scored in the median range at 25 percent of risk managers giving the companies an excellent rating, while XL, The Hartford Insurance Co., Liberty Mutual, Zurich Financial Services, The Chartis Group and American International Group were at or below 20 percent.
David Fox, managing director for Greenwich Associates, explained that the survey is an examination of who really stands out in the minds of risk managers in terms of branding and service.
There are certain tangible and intangible elements that risk managers find important when evaluating whom they do business with, noted Mr. Fox.
Among the important intangibles are ease to work with, ethics, flexibility, financial strength, innovation, and transparency in pricing and compensation.
Mr. Fox noted that for risk managers, if any of these elements are missing from the equation, the relationship won't last.
“If you didn't rate well on one of these items, you didn't get used,” observed Mr. Fox. “In other words, if they gave [a broker or insurer] a low rating in ethicality, they either disengaged or intended to disengage.”
The fact that risk managers are dissatisfied with their brokers and carriers underscores that there is a new breed of professionals looking for partners that can distinguish themselves, Mr. Fox said.
“Most have the product capability,” he said of insurance brokers, but risk managers are seeking brokers who can provide more depth to the relationship.
“There is a new world out there, and risk managers are under a great deal of pressure from boards and the C-suite, and brokers and carriers have to do what's necessary to really distinguish themselves,” observed Robert Mata, corporate relationship manager for Greenwich.
“I think what we are showing here is that they are not doing that right now and there are certain things that they can do to distinguish themselves and take that extra step forward in the eyes of the risk manager,” he added.
The report is available from Greenwich Associates by e-mail at [email protected].
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