The risk manager and the insurance broker are like Batman and Robin when it comes to protecting organizations in the changing risk landscape. Their relationship is central to any effective risk strategy and it extends far beyond simply discussing different insurance premiums. It’s a true partnership.
As the risk landscape evolves and the insurance market twists and turns in tandem, that partnership is being put to the test. Risk managers and their insurance brokers are under significant pressure to come up with innovative risk transfer solutions, or at least preparatory measures, to protect against emerging risks like technological and environmental exposures, whose potential for harm or loss is not fully known.
“There has been a shift away from sole policy placement because this service is very interchangeable between brokers. What can help a broker stand out for a risk manager is bringing solutions to the table,” said Kristen Peed, director, corporate risk management, CBIZ, and board director at the Risk and Insurance Management Society (RIMS). “Many risk managers, like myself, operate as a department of one and they look to their brokers as an extension of their own department.
“For myself, I leverage my brokers for their expertise in particular areas, their access to technology which makes my jobs easier, and how responsive they are to my needs and issues. As an example, the US Occupational Safety and Health Administration (OSHA) updated new regulatory requirements in 2019. While corporate safety is under my area of responsibility, it would be hard for me to follow all of the new standards without the help and guidance of the loss control contracts that I have with my broker.”
To explore the relationship between risk managers and insurance brokers in more detail, Corporate Risk and Insurance is running a Risk Managers on Brokers survey, where risk managers are asked to rate their insurance brokers/brokerages, based on how they perform in 11 key areas.
The key performance areas include: knowledge of risks and insurance coverages; relationships and access to markets; claims foresight and management; problem solving; and cost guidance. Results will be published in an upcoming report and should provide valuable feedback on how insurance providers can better serve risk managers and their organizations.
“The most important thing for me in the end is about the relationships,” Peed told Corporate Risk and Insurance. “A good broker will make you feel like you’re their most important client. They can be key to the success of a risk manager, and open communication, dialogue and trust are integral to this relationship. Brokers may be privy to sensitive information regarding claims, acquisitions or financial matters, and risk managers need to know that the information will remain confidential.
“Furthermore, we expect that the broker can help us strategize to mitigate risk from our company, whether through insurance or not. Risk managers are having to evolve outside their traditional roles of insurance procurement and it’s essential that brokers are on the journey with us. Their skillset will need to continue to expand to match the growing needs of risk managers and our companies.”