Insurance renewals can be a stressful time for risk professionals.
For many, it is part of their annual goals and — justly or unjustly — gives leadership a quantitative measure to assess the performance of the organization's risk management function.
On the front lines of renewals are the members of the board of directors of RIMS, the risk management society. Several members of RIMS leadership offered the following tips to help risk professionals make the most of their renewals:
|1. Maintain relationships
Gloria Brosius, Director, Risk Management and Insurance, Pinnacle Agriculture Holdings
I have found that meeting face-to-face with the underwriting team for each carrier produces the best results. Distinguishing yourself from every other account and developing meaningful relationships with your carriers is second to none in obtaining the best renewal. Most carriers truly appreciate the time and effort taken to meet with them to explain your business and renewal information. I typically try to meet with each carrier at the RIMS Annual Conference, and again closer to my renewal date.
Emily Cummins, Managing Director of Tax and Risk Management, National Rifle Association
Many risk professionals will discover that providing context around a data submission adds real value. Certainly, technology in this industry has been transformative, but human relationships are still at the heart of the business. Building long-term relationships of trust strengthens the risk financing process. Underwriters who understand "why" you do what you do may be more willing to stand by your company through the hard times.
Related: Underwriting and big data: 3 myths debunked
|2. Set goals
Gordon Adams, Vice President, Risk Management, SERVCO PACIFIC, ret.
A key portion of achieving a competitive renewal is knowing and identifying what it is you're attempting to achieve. Risk professionals should strategize with their brokers and internal customers to establish what terms, conditions, special coverages or pricing comprise strategic renewal goals. To do so aligns efforts, focuses negotiations, and provides a basis for evaluating outcomes.
Rick Roberts, Director, Risk Management & Employee Benefits, Ensign-Bickford Industries, Inc.
Set goals with senior management. I aim to have renewals come in a point or two better than current market conditions with the worst case scenario being that we come in right at market pricing. When setting those expectations, risk professionals need to clearly explain the implications that multiple losses in the past year will have on the renewal process.
Steve Pottle, Director, Risk Management Services, York University
It is critical that risk professionals set expectations early in the renewal process. The risk professionals should have a target for coverages, pricing, new markets and any other enhancements your program will require in the upcoming year. If you and your insurance broker treat each renewal like it's your first, you'll increase your odds of a successful renewal.
|3. Know your risks
Julie Pemberton, Director, Risk, Administration, Compliance, Columbus Regional Airport Authority
It's your organization so don't depend on someone else to represent your risks. It's critical that risk professionals know their business, know their risk prevention methods and know their underwriter. We have to be advocates for our own organizations and effectively communicate the characteristics that make our organizations excellent risks.
John Phelps, Director of Business Risk Solutions, Blue Cross and Blue Shield of Florida, Inc.
One of the strategies I use is the "next best friend" strategy. Many of our renewals require multiple carriers to build out the requisite capacity of $20 million, $30 million, $50 million or more. Some carriers like to be the primary carrier, some do not. I try to place coverage with carriers at the bottom of the tower that could drop down into the primary if needed at renewal. Sometimes a carrier just wants to exit that particular line of coverage or they feel they aren't getting enough premium to accept the risks in the primary layer and float out a sizable increase. When that happens, we have a "next best friend" at the next layer or two above that wants to be a primary carrier and is already familiar with our account. This provides stability for the portfolio and helps keep pricing reasonable.
Rick Roberts, Director, Risk Management & Employee Benefits, Ensign-Bickford Industries, Inc.
The most important thing I do is research where the specific market is heading and why rates are increasing or decreasing at the time of renewal. I then work to prepare a submission that specifically addresses an underwriter's concerns. With that information, risk professionals can prepare specific reports outlining how the organization is addressing industry-wide concerns or how the concerns have no impact on the business. These submissions shouldn't be "cookie cutter" data. Each one must be tailored to tell the best story possible for our company.
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