The traditional business insurance bidding process is the method business owners commonly use to lower insurance costs. Several brokers are invited into your company to pick up copies of your current policies and loss runs, they then go out to the marketplace to solicit quotes and will return, usually days before your expiration to pitch their deal.
You’re presented with three or four proposals that are filled with insurance-geek-speak that you don’t really understand, and you’re forced to make a decision. So, typically, you choose the one with the lowest price; or you give your current broker a “peek in the box” to see if he or she can match or beat the best price if they weren’t the lowest price. More than eighty percent of the time, you stay with your current broker, which if fine…… But, at the end of the day, few issues are actually ever addressed. In most cases no risk assessment has been conducted so there’s been no identification or analysis of the risks your company faces beyond those addressed in your current policies. If your current policies have uninsured or under-insured exposures, than the renewal program will have those same errors. Worse yet, no solutions have been developed to address controlling risk, or mitigating risk, which by-passes significant savings opportunities.
The worst part of this age old process is that you are actually cheated out of getting the best price on your insurance program because you’re playing by the brokers rules and not your rules. This process is not only dangerous and inefficient, but is totally unnecessary.
In order to maximize results to lower your company’s Total Cost of Risk you need a strategy. That strategy begins with Risk Identification, which is followed by building solutions to your risk issues and improving your Risk Profile. It is then, with a strategy to improving your Risk Profile that you can effectively go to the marketplace to strategically identify underwriters who can maximize your insurance purchase and help you reduce premiums.
Without this strategic Risk Management / Risk Profile process your account looks like every other account on an underwriter’s desk and gets the pricing they think you deserve based on the limited information your brokers are communicating to them. It really doesn’t matter how big your competing brokers are or how much clout they claim they have with the insurance companies, without a clearly documented strategy on how they will manage, reduce, and prioritize risk for you, your account gets the same level of attention and pricing flexibility as every other account on the insurance company underwriter’s desk.
Our process focuses on identifying, measuring, prioritizing, and mitigating risk to achieve ultimate balance sheet protection, and significant long term reductions in your firm’s Total Cost of Risk.
For more information on how we can help you create this process for your New York organization, please contact us!