Insurers, Agents Partner To Manage Client Risks
If all a company, agent or broker does is sell insurance policies, it will likely not be able to compete effectively with firms that take a broader risk management approach to client needs. The more enlightened firms know that insurance is one method to manage risk, but by no means the only method.
"We see risk management advice and services as an important value-add that agents can offer clients," said Rick Newell, vice president of product development and marketing for small commercial accounts at The Hartford Financial Services Group in Hartford, Conn.
"Most small- and medium-size business clients don't have a risk manager on staff, so someone else has to wear that hat," added Mr. Newell.
For clients insured by The Hartford, the risk manager "hat" is often worn by the "client management teams," consisting of agency and insurer employees handling the account, Mr. Newell noted.
"The Hartford looks for agents that can effectively and efficiently make clients understand and minimize their exposure to loss," continued Mr. Newell. The insurer has several programs to assist agents in achieving that valuable skill.
"For instance, we have online tools to help agents analyze client needs and reduce risk," Mr. Newell said.
The Hartford provides a free risk management guide, including information on premises and personal security, fire protection and prevention, employee safety, and many other topics. If a business has any of these risks, the guide provides suggested ways to control them.
The insurer offers a free course on cyber risks to agents and brokers through its Hartford School of Insurance. The school may offer other subjects in the future.
One of the most important risk management needs is the development of a post-loss recovery plan, explained Mr. Newell.
"Studies have shown that almost half of businesses that have no recovery plan never re-open after a major loss," he pointed out, adding that while coverage is important to recovery, "a solid contingency plan is also necessary."
Chubb Group, based in Warren, N.J., also stresses the importance of having a plan in place to continue operations after a major loss. The company is developing a CD-ROM for agents and clients on creating a business contingency plan, noted spokesperson Jodi Dorman.
Some of Chubb's other risk-management-related offerings are described on its Web site under "eBusiness Solutions." These include the ability to mine data to reveal critical risk management trends, produce cost-of-risk allocation and analysis reports, and prepare loss development and forecasting triangles.
The St. Paul Companies, based in St. Paul, Minn., is partnering with its agency force to bring risk management to clients, according to spokesperson Pat Hirigoyen.
The company, he said, conducts free seminars at client locations on different industries and holds classes for agents through its St. Paul Academy. The company has a leadership forum for its top 140 agents promoting the seminar on risk management.
Mr. Hirigoyen stressed that there is an effort underway at St. Paul to be more assertive about these programs.
"This [risk management] is what we know and what we do," he said. "We are going to spend more time contacting agents and letting them know about the risk management services we offer."
Another insurer that strives to make sure agents and brokers remain on the cutting edge of risk management developments is New York City-based American International Group.
"We maintain a small business underwriting center [on the Web] to assist agents and brokers with risk management issues," noted AIG spokesperson Joe Norton.
The underwriting center contains product categories and information on specific industries. The industry section contains newsletters alerting agents and brokers to the various kinds of risks businesses in that industry face and what can be done to treat those risks. The risks include sometimes-overlooked ones such as employee fidelity, accidents while traveling and pension-plan-related liabilities.
AIG's small business center recently added a new risk management enhancement, Product Recommender, a risk profiling tool that assists agents and brokers in identifying industry-specific client risks. The agent or broker enters a client's profile into the system, which creates a customized report of the client's risks.
Vince Tizzio, president of AIG's small business underwriting center, explained that this new tool "helps manage business risks beyond the realm of traditional business operation protection or package policies."
In addition, AIG has a public Web site with risk-related news and other data for various industries and countries, as well as a password-accessible site for agents and brokers that describes AIG products and the businesses and operations that may require such products.
Brokers that have registered with AIG receive regular mailings on various risk management and insurance topics. There are also kits providing risk management alternatives for specific loss exposures, such as environmental liability and employment practices.
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.
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