Advice for risk pros in a changing insurance marketplace
Now is the time for risk managers to shine and show their impact within their organization.
Editor’s Note: Read part one of this article here.
It is imperative for brokers not just to deliver bad news to clients. They need to have a game plan on how to approach the situation.
The timeline for preparing for renewal has changed. Six months before your renewal is not too early to start thinking about how you will approach it. Risk managers need to involve their company leadership to not only help develop messaging for the insurance marketplace but also to manage their expectations in terms of budgets.
Companies need to look at things at a more enterprise-level instead of just line by line of insurance coverage. Should they consider retaining more risk in more predictable insurance lines? Are there potential uninsured or underinsured exposures?
Data and analytics can assist with this analysis. Every company today is different than it was six months ago. All the risk models are based on a risk profile that has likely changed. Companies need to know what has changed and what they expect to further change in the future.
Best-in-class loss control and business operations are now the expectation, not the exception. If you do not have this, it will be challenging to get carriers interested in providing coverage. It is important to highlight all your safety and loss prevention activities and demonstrate how you will operationalize those across your enterprise.
Consider the use of more insurance options, such as captives and facultative reinsurance coverage. Clients need to understand their appetite for risk and their tolerance for volatility.
It is also important for companies to consider the bigger picture of their employee health and wellness and the impact that has on both their health insurance and workers’ compensation costs. As workforces are evolving and workers are pushing off retirement, that aging workforce is impactful to your claims.
The path forward
The theme of the Out Front Ideas virtual conference was “The Path Forward,” so we asked our guests to comment on what they see as the path forward for our industry.
Our guest speakers were:
- Daniel Aronson, U.S. casualty practice leader, Marsh
- John Csik, chief operating officer & chief financial officer, Safety National
- Lori Goltermann, chief executive officer, Aon U.S. Commercial Risk & Health Solutions
- Joseph Peiser, executive vice president, global head of broking, Willis Towers Watson
Video conferencing is a crucial tool to maintain business relationships. You can video conference with underwriters worldwide, making it much easier to maintain these relationships than ever before.
Unless there is meaningful tort reform, the challenges in the insurance marketplace will continue. As long as claims continue to grow exponentially, rates will also continue to grow. Carriers, brokers, and their clients need to partner together to pursue tort reforms across the country.
We have shown we can continue to conduct business without in-person meetings and with many workforces working from home. What will businesses look like in the future? Companies are reconsidering which people will ultimately return to the offices and which will permanently become work from home. This shift will change the way that businesses recruit and retain talent and how they develop their culture.
Relationships are more important than ever before. It is a mistake to sacrifice a long-term business relationship for short-term premium savings. Look at the bigger picture and make sure you partner with carriers that can meet your needs in the short and long term.
Finally, transparency goes a long way to eliminating uncertainty and making your business partners comfortable. Now is the time for risk managers to shine and show the impact they are having within their organization.
Kimberly George (kimberly.george@sedgwick.com) is the senior vice president of corporate development, M&A and health care at Sedgwick. Mark Walls (mark.walls@safetynational.com) is vice president of communications & strategic analysis at Safety National. The opinions expressed here are the authors’ own.
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