How Does Your Risk Management Program Stack Up to Competitors?
When you look around the real estate industry you notice that in many ways it is a relationship business. Owners and Property Managers seem to work with vendors who they feel they have a strong relationship with. But how do owners/managers know they are working with the best? Aside from basic brokering of business what additional services are the owner/ operator receiving? More importantly, how do the owners/managers know the product they are being sold is the same product best in class (BIC) companies are purchasing?
In the risk management arena most owners/managers dont know how their risk management program stacks up to other competitors and BIC companies in their respective space. Benchmarking and accountability seems to be a missing link in the risk management and insurance brokerage industry. Below is a list of top 3 benchmarking items companies should look for from their agent/broker and the services they provide:
1. Pricing BIC companies dont compare pricing from one year to another and from one broker to the next. BIC companies are looking to compare their pricing to competitors their size with a similar if not exact insurance program design. This gives them the data they need to make sure they are paying fairly in comparison to other companies with the same size and program design.
2. Program Structure Owners/Managers typically trust their agents to provide them with competitive pricing, while making sure their deductibles are kept at a minimum and their coverages will cover insurable assets for full replacement cost. BIC companies review program structure every 3-5 years depending on growth and risk management goals. BIC companies are continuously informed and reminded as to how they can assume more risk or protect their insurance investment through self-insurance, which enables them to reinvest tax protected dollars back into their business.
3. Service Platform and Delivery For most owners/managers every insurance renewal goes the same way - gather up info for brokers, brokers send to market, brokers provide quotes with updated pricing and coverages. BIC companies NEVER renew insurance this way. BIC companies are looking for how they are going to free up top line cost to increase a better bottom line. To achieve this goal, BIC companies are looking to engage agents/brokers who will make their companies more profitable and a better overall operation. Here are some key service items that BIC companies consider when engaging their brokers:
- Commitment and Delivery A broker who has a strategy on how they will take the company from point A to point Z is favored by BIC companies. A simple quote and bind isnt what BIC companies are looking for. They want to see safety goals, risk management, metrics, pricing decrease strategies, culture improvements, education and information on changes happening in the insurance industry that will affect their business.
- Safety/Claims Management Typically when a claim happens the broker is called by the insured and they begin the process of filing a claim and keeping the insured informed on when the claim will be accepted or denied. BIC companies are looking for pre-loss strategies and post-loss claims management to ensure the best result. A good claims management team is key to help companies understand the goal for a claim and the future impact that claim will have on their overall program.
- Carrier Engagement BIC companies work with brokers who engage and partner with the carriers they represent. Many owner/managers think sending out the risk to many agents will ensure them the best result. Wrong! This method cheapens a risk and dirties the appetite of the carrier. This is because underwriters will see the risk year in and year out and wont want to take the time to bid on a risk that gets marketed heavily every year. An engaged broker is a huge factor for BIC companies to consider. BIC companies want to know why a specific broker wants a specific carrier, what the marketing strategy is and why that broker can deliver the best result.
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