American International Group Inc. is the top choice of insurance buyers in the 2013 Risk Manager Choice Awards as the best overall commercial-insurance provider.

The race was extremely tight, with AIG gaining 44.4 percent of the vote from hundreds of risk managers surveyed by the Flaspohler Research Group, in partnership with PC360-NU.

Close behind were Chubb, Travelers and Zurich—each the carrier of choice for 43.2 percent of the vote.

Risk managers were provided a selection of more than 60 carriers, from which they were able to select up to 10.

When asked to rank those carriers on 20 lines of business, risk managers ranked AIG high in Construction, Directors' & Officers, Employment Practices, Errors and Omissions, Ocean Marine, Umbrella/Excess Liability and Cyber Liability.

Johnston, R.I.-based FM Global (which received 32.1 percent of the vote for best overall carrier) also gained plenty of recognition in certain categories. Risk managers gave FM Global the top ranking when it comes to Property, Business Interruption, Boiler & Machinery, Terrorism and Excess Flood.

Travelers, meanwhile, received top billing in Commercial Auto, Commercial Multi-peril, General Liability, Inland Marine and Surety Bonds.

Surprisingly, at least in terms of their overall ranking, Chubb was not selected as best overall in any one line—and Zurich was selected only in one: Product Liability. However, each did show up regularly in the rankings of the top 5 carriers per line.

Gauging satisfaction

According to the survey results, risk managers aren't singing “I Can't Get No Satisfaction”: 41.5 percent of respondents say they are “very satisfied” with their commercial insurance providers, while 46.2 percent report they are “somewhat satisfied.” Not one risk manager said they were “very dissatisfied.”

When asked about their relationships with insurers, 36.5 percent of risk managers say they are “improving” and 57.1 percent responded that they are “not really changing.” While that may sound good, however, consider: Just two years ago, 44.6 percent characterized the relationship with their carrier as “improving.” The “not really changing” percentage of respondents was up 4.8 percent from 2011's poll results.

One word repeatedly surfaced when risk managers were asked to tell us why relationships are improving: Communication—before the contract, and when a claim is made.

One respondent says, “Carriers are more open to meeting with clients directly and understand the need to involve risk managers in developing new products and services.”

Another important takeaway: Many survey respondents say they enjoy the site visits they get from carriers. Risk managers say that through such on-site meetings, carriers can develop a clearer understanding of a site's specific risks and the insured's efforts to mitigate those risks.

“Longer relationships allow for a better mutual understanding of risk management processes and corporate philosophies,” says one respondent.

Here are some other reasons risks managers say they are satisfied with their carrier:

“Our insurers are taking into consideration our ideas as to how our claims could be handled more now than ever before. They know insurance, but sometimes they need to take into account our industry in claims decisions. They have been more open to that in recent years.”

— “The underwriters are making an effort to understand our business and not lump us in with others that may look like us on the surface.”

— Insurers are “improving communication directly and engaging in collaborative thought to maximize value and hold premium costs down.”

There is always some room for improvement. Though just 6.3 percent of those surveyed say the relationship with their insurer is declining, these respondents were vocal when asked why.

“Claims handling is poor across the board,” says one respondent. “Insurers are looking for any reason to shift liability to other parties and away from their insurance contracts.”

The level of overall satisfaction may be directly related to the fact nearly 30 percent of risk managers say they are “very unlikely” to replace their primary commercial lines carriers in the next two years. (Another 19.2 percent say it is “somewhat unlikely,” and 22.8 percent categorized this potential as “neither likely nor unlikely.”)

Nevertheless, the 20.8 percent of risk managers who say they are “somewhat likely”—coupled with the 8 percent who say they are “very likely”—to switch carriers in the next two years does create a sizeable marketplace of shoppers.

Insurance buyers were also asked what would make them consider paying a higher premium to use a specific carrier. Nearly 68 percent rank better terms and conditions as the top reason. Superior service, lower retentions and innovative endorsements were also popular answers.

The news for brokers

Of those surveyed, a majority 56.7 percent say they “strongly prefer” to use an insurance broker, while 18.6 percent say they “slightly prefer” one.

On the opposite side of the coin is a total of 11.8 percent of respondents who either “strongly” or “slightly” like working directly with insurers better.

When insureds use brokers, they use Marsh most: According to the survey, 31.6 percent name Marsh as their broker, followed by Aon (27 percent), Willis (21.9 percent), Wells Fargo (10.2 percent), and Arthur J. Gallagher (9.8 percent).

We asked risk managers to offer some feedback. Here's some advice from buyer to broker:

“Know the product so when I ask, you can answer.”

— “Understand the risks of the company, stay in tune to what is happening with the company and don't go silent after traditional insurance renewals.”

— “Listen to our risk management concerns and don't overkill us with selling new products.”

— “More timely delivery of options and an improved landscape as to why the final package is the most cost effective/balanced risk management solution.”

— “Get more aggressive with pushing back on carriers to provide coverage in master policies so there isn't a need for so many individualized policies such as professional liability (E&O).”

Behind the Results
Initiated in 2007, the Flaspohler Research Group Risk Manager Survey is a biennial study of U.S. risk managers' opinions of commercial carriers. This fourth Flaspohler study was conducted in partnership with PC360-NU.

The survey consisted of 40 questions about insurer utilization, perceptions of insurers and related topics. Sixty-two insurers and 20 lines of business were evaluated.

The interviews—all of which were completed in February-March 2013—were conducted via the Web using dynamic adaptive programming techniques. That is, respondents are only asked to rate companies with which they are familiar and only in regard to how those companies perform on factors the respondent considers to be important. By eliminating the “noise” created by asking respondents to answer every question or rate unfamiliar companies on unimportant factors, this technique results in highly accurate and meaningful information.

This survey included interviews by 302 risk managers and related functions. The overall results of this study are accurate to within ±4% at a 90% level of confidence.

Special Reports /

2013 Risk Manager Choice Awards: AIG Gets the Edge

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