The old saying goes, that the only things inevitable in life are Death and Taxes. If you are in business, your Insurance Renewal can be added to the list and the one thing the three have in common is, nobody looks forward to them.
Why does insurance fall into this unfortunate trio when it is designed to protect balance sheet against loss of your property or claims arising from your legal liability to others? You pay a premium and your Insurer pays the losses – nothing could be more equitable. Your CFO can sleep easy at night knowing that the Balance sheet is protected, at least from these risks.
So…, where does it all go wrong? Claims.
You are happy transferring risk to the Insurer, but when a claim occurs you get stressed. If it is loss or damage to your property, the claim is not being settled quickly enough or at a value you consider accurate.
Real stress usually creeps in when a claim is made by a Third party or employee, especially when the Insurer plans to settle the claim or holds a substantial reserve on the claim, when you are adamant that you are not a fault. The first knowledge you have of this is when Renewal comes around and claims experience is produced by the Insurer.
This all leads to conflict. When Renewal comes around, the Parties are at war. Usually caught in between, is your Insurance Broker who tries to bring the parties together. They are torn between the desire to satisfy the client’s needs and recognition of the wording in the Insurance Policy.
Some time ago, BT had an advert running in which that great actor Bob Hoskins says, “it`s good to talk”.
Talk to your Insurer on a regular basis during the year – quarterly is good for low claims frequency. Have them produce a claims review with planned action and rationale. Get to know each other better. Insurers would much prefer to build a long lasting relationship with a policyholder – it gives them a chance to know and understand your business and work together with you, to reduce risks going forward.
Insurers are more than happy to engage with their Policyholders, after all, there are only two names on the contract: You and Your Insurer.
It`s good to talk, but better to understand.
End the war today.
Jack McIlduff
MD
Europa General Underwriters (NI) Ltd
(An RSA Group Company)
Contact telephone number: 028 90320190
The content of this article is provided for information purposes only and does not constitute professional or other advice.
Tuesday, January 19th, 2010
