I recently spoke at a real estate risk management conference to an audience of 60-70, hosted by Lockton – a leading broker. Part of my presentation discussed the “insurer carrot” and the “insurer stick” approaches to risk management. I was shocked that when I explained the concept of the “carrot”, very, very few people (under 5%) had heard of an insurance risk management bursary.
Insurers don’t want claims… and nor do you
This may come as a surprise to some of you reading this, but insurers don’t like claims and they would really prefer to fight claims rather than settle them. Remember, your premium is calculated based on the perceived likelihood of claims arising, so if you have zero claims the insurer makes a handsome profit.
But claims hurt you too:
- You almost certainly have an excess on your policy too, so you end up paying the first, say £5-25k of any claim directly from your bottom line in any event.
- Were you to have no claims, your premium would also fall the next time you sought to buy insurance
- No claims = no “hidden” costs of claims such as time spent on the investigation, legal fees etc.
- And, importantly (if speaking about personal injury claims), no one would be hurt working for you or visiting one of your buildings.
As QBE says about its risk solutions team: “Our Risk Solutions team can help you save time, money and lives, as well as protecting your company’s reputation.”
Reduced risk is therefore an obvious win-win!
Insurers have risk management functions to help reduce your risks
To help clients reduce their risk, hence see fewer accidents and of course therefore fewer claims, insurers and indeed brokers typically have risk management teams. From casualty (accidents to people) to fleet (accidents involving vehicles) to cyber, risk management professionals are employed to help clients to better understand risk as well as to encourage reduced risk through help and advice. They may conduct surveys of your sites, they may make recommendations, they may be able to help with workshops on topics such as claims defensibility.
They also often have specialist partners (like us!)
These internal teams tend to be supported by specialist service or product suppliers. So we at Slip Safety Services, for example, work with insurers like AXA, RSA and QBE to name a few. The partners are, naturally, vetted and enable insurers and their clients to dive into more depth on specific topics with greater insight and experience plus proven solutions.
Mile-wide, inch -deep… or inch-wide, mile-deep?
A GP can diagnose an issue but may involve a specialist consultant to understand more and treat…
A risk management professional in an insurance company acts in the same way…
Indeed, a risk or safety professional within a business is the same too…
Think of it this way: to be a risk of safety manager you must have a huge breadth of understanding – you need to have knowledge about every single type of risk to your business. But if your knowledge is a mile-wide, it can inherently only ever be – on average – an inch -deep.
What I do, conversely, is only an inch-wide… but a mile-deep.
So specialist companies such as ours can provide valuable assistance for end users but also insurers. And there is a great mechanism for doing this when partnering with your insurer…
How insurers will typically fund risk management work
There are a few mechanisms for insurers to fund risk management work:
- Their own teams will undertake certain activities – this can be done at no cost to the client
- There may be premium rebates available – so if you have less than X claims this year you get Y% of your premium repaid to you
- Use of a risk management bursary
I mentioned a risk management bursary in the opening paragraph. So what is this? Essentially it is funding by the insurance company towards risk management initiatives. So you can get work either fully paid-for or part-funded, meaning you can start the journey of understanding your risk better and seeking to reduce it without it costing you the full commercial rates.
In our world of slip safety – a bit like the GP analogy above – most people know a little bit… but they will often jump to a flawed conclusion on how to manage their risks because they don’t have all the information they need to make a fully-informed decision.
We therefore see a huge appetite from insurers to fund our kind of work, particularly the exploratory stages of conducting slip safety surveys. This process allows the client to get valuable data and expert insights and enables them to make informed decisions about how to better manage their slip safety risks.
How do you access this funding?
Quite simply, you should ask your insurer (or broker if you have one of these) if any risk management bursary funding is built into your current policy or not.
If it is, you then start to have a dialogue about how best to spend it. Typically the insurer will be looking at where you have a high frequency of claims (such as slips which tends to be the largest cause of claims in most sectors).
If it isn’t, you can nonetheless talk to your insurer about this because they may be willing to fund some money for you in any event.
Remember, insurers don’t like claims! So if you can together identify an area of potential risk improvement, there may be some cash available from them to help you to reduce this risk and therefore reduce the probability of claims, making their underwriting decision more profitable.
How can we help you?
We support many of the leading insurers and can, therefore, help to open dialogues with the right people within the insurers’ risk management teams. You’ll probably find – particularly if you don’t have a specific bursary built into your policy – that approaching your insurer in partnership with a known, liked and trusted risk management specialist such as our business will see your chances of receiving funding increase.
Let’s do this!
I recommend you grab the bull by the horns and start a dialogue now. Look at the risks in your business and think about where you are getting either high costs and/or high volumes of issues. Talk to your insurer and ask them whether they would be willing and able to fund you to seek to understand these areas of risk better and to take some proactive steps to reduce the risk.
I’m sure they will be delighted to work with you!
Finally, if you’d like to chat this through with me personally, you can always arrange a 15-minute call via www.slipsafety.co.uk/call/
So, what are you waiting for?