Teaming Up For Service: Agents, Insurers Offering Risk Control For Customers

Imagine youre the owner of a mid-sized manufacturing company and you get a call from your insurance agent telling you your insurance carriers risk control consultant would like to make a visit to your facilities.

If you havent experienced such a visit, you may be apprehensive.

However, it is a visit the owner should look forward to because it can be a valuable service provided by the agent and insurance company.

Manufacturing firms face many risks in their operations. When agents team up with their carriers risk control consultant, the combination can mitigate many of these risks and create a culture of safety in the workplace.

Agents and insurance company risk control experts often play the role of “risk manager” for their customers. But sometimes, customers dont fully understand this role or how a partnership between the client, agent and insurance risk control consultant can have a positive influence on the companys bottom line.

Typically, the risk managers role is to know the “ins” and “outs” of his or her organization, determine potential hazards, and ensure that the plan for addressing these hazards aligns with the organizations overall business strategy. But many mid-size companies cant afford the luxury of having a risk manager on staff. If they do have a designated risk manager, this person often serves a variety of functions within the organization. Mitigating risk is not his or her primary function.

In these situations, the agent often serves as the common link between the customer and the carrier. So it is imperative that agents and brokers know how to work effectively with the insurers risk control experts and customers to make the risk assessment process as productive and beneficial as possible.

Most agents understand that partnering with insurance carriers to provide risk assessment services is an important way to attract and retain clients. These agents know their self-interests are best served when their clients needs are met. Thats good customer service.

Good customer service will go a long way toward establishing trust and strengthening existing relationships with clients. After all, the market will eventually soften, and both agents and insurance carriers have vested interests in establishing long-lasting relationships with their customers by providing exceptional service across the board.

The best way agents can provide this service is to establish a spirit of teamwork between the agency, carriers and customers in order to develop working partnerships among all the different parties.

In any partnership, the key to success is good communication. Clearly establishing the common objective–to minimize loss exposure–and then staying focused on the end goal, will not only make the risk management process beneficial for the client, but will also help get everyone to buy in to the process. Once everyone is invested, its time to develop a plan for mitigating risk together.

In essence, everyone has a specific role. Independent agents and brokers are not expected to serve as a substitute for a risk manager. But in the absence of one, agents and brokers can help their clients identify, minimize and cover their risks.

Risk control experts work closely with both the agent and the client as a team to identify the greatest property and general liability risks, as well as other risks for major disruptions to the clients business. Together the team can analyze potential risks and ensure the benefits of any recommendation will outweigh the costs.

For example, a risk control team reviewed the losses in a manufacturing companys fleet of delivery trucks. The review revealed that nearly 40 percent of accidents involving this clients delivery trucks happened at one location.

An examination of this accident site turned up some interesting information. The location had a particular turn that had significantly poor visibility for drivers. This turn seemed to be the root of the companys mishaps.

The solution was to reroute the delivery trucks to make the turn a mile down the road, where there was not a visibility issue. The number of accidents decreased substantially, providing savings to both the carrier and the customer.

This is a great example of how analyzing a risk revealed a simple solution that would not only save the client money in the future, but, more important, would improve safety and could even save lives.

Another case involved a food manufacturer. The client was facing big increases in premiums because one phase of the manufacturing process was exposed to high flames. By investing in a fire suppression system over the limited area of the exposure, the manufacturer was able to get a reduction in its property insurance rates.

The decrease in the property insurance premium paid for the cost of the fire suppression system in less than two years. A major fire would have cost the company more than twice the cost of the suppression system in lost income.

Which brings up another issue. A major business disruption can often have dire financial consequences for mid-size companies. Some may never be able to recover from the loss of income.

A way to guard against such losses is to instill accountability for safety issues throughout the entire organization.

The agent and risk control expert can play important roles in helping their clients create cultures of safety. Clients who do an excellent job of managing risk will include safety as part of the job performance and foster environments where safety and efficiency go hand-in-hand.

Mitigating risk can be a beneficial experience for customers, agents and insurance carriers if some basic guidelines are followed:

Develop a partnership among the agent, customer and carriers risk control expert.

Communicate clearly and establish the common goal from the beginning. If everyone is invested, the likelihood for success is much greater.

Jointly devise a plan and stay focused on the big picture: to mitigate risks and improve safety.

Clearly determine everyones role and then execute the plan.

By staying focused on the big picture, risk control and independent agents can team up to deliver great customer service that will go a long way toward building customer loyalty and long-lasting relationships.

Jeff Fancher is assistant vice president of Commercial Risk Control at The St. Paul Companies, St. Paul, Minn., and Eric Turner is vice president of Marketing at Molton, Allen & Williams, an independent insurance agency in Birmingham, Ala.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, June 30, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Special Reports /

Teaming Up For Service: Agents, Insurers Offering Risk Control For Customers

Related Stories

Recommended For You