DW&P Takes Clients To School

For its efforts, DW&P is the only agency receiving an "Honorable Mention" in National Underwriter's "Commercial Insurance Agency of the Year" award program for both years that the award has been in existence.

Gregory D. Davidian, DW&P's chairman, president and chief executive officer, noted that the firm's "employer school" has been extremely popular with clients.

"We have tri-annual offsite programs, available only to our clients, which are usually attended by 125-to-170 people," Mr. Davidian said. "We have judges, lawyers, and insurance and health care industry people speaking about legislation and trends, and have even conducted mock trials."

The programs are an effective way for clients to network, as well as learn about risk management issues affecting their businesses, Mr. Davidian pointed out.

A recent program, held at a local steak house, featured sessions on Health Insurance Portability and Accountability Act privacy compliance, 401(k) fiduciary responsibilities of directors and officers, and how to recognize employee alcohol and substance abuse.

As DW&P also believes that it is difficult to learn on an empty stomach, the all-day program included breakfast and lunch buffets.

In addition to its school, DW&P provides one-on-one client training on safety and loss control. For example, the agency helps clients develop in-house claims management programs, emphasizing modified work programs, timely reporting of injuries, communication with injured workers and selection of medical providers.

The training has bottom-line payoffs for the client, as claims costs and experience modifications are reduced, and premiums are ultimately lowered, Mr. Davidian pointed out.

On-site safety training is also a staple at DW&P, with Vice President Nick Donovan having been known to arrive at worksites as early as 4 a.m. to accommodate busy client schedules. "We provide service to our clients based on what they need–when they need it–regardless of the time of day," Mr. Donovan noted.

DW&P also has a human resources service center and hotline to answer clients' employment-related questions. The center performs human resources compliance audits, reviews employee handbooks and conducts employment practices training. It provides answers to client inquiries on medical leave, hiring and termination, job descriptions, and related topics.

As most of the agency's clients are located in California, they face many unique risk management challenges created by the state's current political and financial problems.

For instance, Mr. Davidian said that many clients, who in the past would never consider anything other than first-dollar coverage, are seeking alternative risk-transfer mechanisms because of the high cost of workers' compensation coverage. "More clients are buying and more insurers are offering alternatives to first- dollar coverage, such as deductibles and self-insured retentions," he noted.

DW&P is currently considering an agency-owned captive as another solution for its clients' risk-related needs.

Mr. Davidian advocates giving clients what they really need, and not necessarily what they might think they need.

"People come in wanting self-insurance, but what they are really looking for is to take on some of their own risk and pay some of their own losses. Those clients would benefit from an insurance policy with a large SIR [self-insured retention] or deductible," Mr. Davidian explained. "They would get the advantages of 'self-insurance,' but easier and with less start-up costs. It's a win for everyone if done right."

For a client mulling a retrospective rating program for workers' comp, DW&P used cost analyses to illustrate that the program would not reduce premiums. The following year, after losses were brought under control, a retro made good financial sense and was implemented. DW&P's recommendations in both years resulted in substantial savings for the client.

DW&P employees are always on the lookout for ways to manage client risks, both through insurance and non-insurance techniques.

"DW&P uses a 'watchdog' approach to help clients reduce their total cost of risk, said Mr. Donovan. One of the items the firm "watches" is clients' contracts.

"We look at clients' vendor agreements and transfer risks to vendors whenever possible," Mr. Davidian noted. In addition, he pointed out that risk can sometimes be managed through loss control, and his firm often makes suggestions to clients about how facilities and work processes can be made safer.

"One way of discovering safety-related problems is to check the losses and see which types are recurring," said Mr. Davidian. "Safety programs should be linked to the loss history."

Mr. Davidian related how one client–a public school district with 27 locations–suffered a serious boiler and machinery loss. Three classrooms were destroyed, threatening closure of the entire school. DW&P put its own loss control team onsite within hours, and the school reopened a few days later.

But that was not the end of it. DW&P wanted to make sure the school's other locations were not also exposed to this kind of potential loss.

"Along with the carrier, we brought in an outside expert from Mexico City," Mr. Davidian noted. "Using sophisticated thermo-graphic testing equipment, he completed inspections of similar installations in all the district's other schools. Recommendations were made and implemented, reducing the district's risk potential considerably."

DW&P loss control advice also helped clients with Hong Kong operations get through the Severe Acute Respiratory Syndrome scare by using teleconferencing and before-and-after medical exams for business travelers.

The risk management needs of DWP's smaller clients are the responsibility of Dennis Kristan, senior vice president for small commercial and personal lines.

"Small commercial clients don't need the sophisticated risk management solutions that larger businesses require. But they may have leases or other contracts that have to be reviewed for general liability and other exposures," said Mr. Kristan.

"We talk with and educate the smaller clients about their risk exposures and offer them options for treating those risks," added Mr. Kristan. "If a coverage is not included in an insurance policy they are buying, we let them know about other coverages out there. We also send them pre-renewal letters asking about any changes in their exposures."

Mr. Kristan also noted that the growth of the smaller commercial accounts is closely monitored, and they are transferred to the middle-market department if they require any of the "more interesting" coverages, such as directors and officers liability or pollution liability insurance.

Personal lines clients also need risk advice, in addition to the usual homeowners and automobile policies. Mr. Kristan offered as an example a client who employs household staff. "That client may need an extension under its homeowners policy, providing workers' compensation coverage for live-in help," he explained.

Individuals might also own high-valued homes in the brush requiring fire loss control, or fine arts requiring anti-theft measures, added Mr. Kristan.

Vice President Vicki Sternfeld pointed out that "sometimes placing insurance is not as important as just being able to work with the client. After all, some risks–like antique documents or original client art–may be uninsurable, and that requires that we focus on loss prevention."

Reducing clients' employee benefits costs is another of DW&P's strengths.

Sheila Fenster, benefits vice president, and her staff focus on reducing costs and improving benefits by carving costly options such as prescription cards, dental, and long-term disability out of traditional packaged plans. These items are then replaced with outsourced suppliers, resulting in a richer benefit dollar and lower overall costs, she said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 19, 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.