Insurance News

Buyers Want Insurers To Stick With Them

Posted on: October 20, 2009

Commercial insurers wondering what they need to do to attract and hang on to their customers got an earful from the 411 buyers responding to open-ended questions about what they want from their carriers, as part of the first Risk Manager Choice Awards survey, conducted by the Flaspöhler Research Group in partnership with National Underwriter.

Forty-five percent of risk managers surveyed said their relationships with insurers are ?improving,? but many had a lot to say when asked: ?In what way, specifically, are relationships improving, and why??

Sticking with a client long-term, through good and bad times, was a key attribute mentioned by many of the risk managers responding to the survey.

?Most insurers bail off large risks after a significant loss,? wrote one buyer, echoing the complaints of many respondents. ?They need to be able to underwrite someone who has gone through a difficult situation. The mentality is they could lose their job, but after all, why are they in business??

?I continue to try to encourage long-term strategic partnerships,? one respondent noted. ?The market?s response has been somewhat cyclical to this. At the moment, we have great and improving relationships with the major players in our coverage portfolio.?

?Carriers have been willing to give us pricing concessions and to assist more in loss control,? according to one buyer. ?They remain loyal in spite of occasional losses. They appreciate our desire for a long-term relationship.?

?They have stood by our company during difficult economic times, and the relationships have been strengthened by that fact,? added another risk manager.

?Relationships are improving due to focused communications and more transparency,? observed one respondent. ?This is happening because our broker is lining us up with underwriters whose approach and philosophy matches ours. We improve our relationships because we focus on it and put much energy and effort into communications and face-to-face meetings on a regular, periodic basis.?

?With the economic downturn and resulting changes to premium, I have seen more loyalty from carriers than anticipated,? according to one risk manager. ?For the most part, communication has strengthened and they appear to be motivated to help us ride out the recession. It has been difficult to attract interest from new carriers.?

When asked what, in their view, is the best indicator of quality in a commercial insurance provider, many respondents listed strong balance sheets, competitive pricing and flexible coverage options.

Overall, though, one risk manager summed up their favorite quality in a carrier by insisting on a ?partnership mentality.? Another cited ?the ability to listen rather than just tell.? A third said they wanted a carrier that is ?willing to evaluate us on our own merits (and demerits) rather than pigeon-holing us into pre-set categories.?

Poor claims-handling was a particular sore point for many buyers. One risk manager emphasized the importance of having a carrier that ?doesn’t panic in the face of a significant claim.?

?When an insured has a loss, the carrier should treat the insured as a long-term partner rather than an adversary,? suggested one risk manager.

?We need acceptance of claims for things that are truly covered, versus some insurers who question and beat you up even when it’s obvious the loss is covered,? complained another respondent.

?The only reason anyone buys insurance is so that valid claims and losses are paid,? reported one buyer. ?It has been so disappointing to see claims adjusted in a vacuum without underwriting being involved. Items that were clearly intended to be covered by the underwriters and client are continually second-guessed by claim adjusters angling to avoid paying anything.?

This same risk manager warned that ?if this continues, customers will continue to use alternative risk-transfer mechanisms versus traditional insurance.?

Loss control advice and support is also greatly appreciated by buyers, the survey found. One cited as critical a carrier?s ?interest in and ability to help you prevent losses.?

That same risk manager emphasized the importance of fraud prevention in keeping an account?s loss history and premiums under control. ?We need a back office that follows up on the insured’s evidence that a particular claim is fraudulent, or gravely in error as to the facts. We have seen our premiums increase dramatically because of a claim that was completely fraudulent, that the insurer decided not to pursue, despite all our evidence.?

When asked to talk about their greatest risk management challenges, and what commercial insurers can do to help them overcome such hurdles, risk managers responding to the survey offered a plethora of suggestions.

With this year?s financial meltdown, many risk managers expressed concern about whether their insurer will be able to pay claims. ?Given the current times, it is imperative that insurers keep us up-to-date on financial decisions and back those decisions with legitimate reasoning,? said one buyer. ?This will help risk management sleep better at night.?

Another buyer just wants insurers to live up to their obligations. ?Ensure that the coverage we have purchased will actually be available when the time is needed,? this respondent wrote. ?A good partnership and years of building relationships do not seem to be enough of a driving factor when a large claim comes along.?

Echoing that sentiment was another risk manager, who cited as critical the ?reliability of the coverage we purchase (i.e., the risk that what we think is covered is different than what the insurer intends to cover). Underwriters can be more clear in discussing their coverage intent and more exact in the way their coverage forms and endorsements are written.?

Another was more blunt: ?Many of my non-insurance colleagues assume from the start that carriers won’t pay claims and will do anything, ethical or otherwise, to avoid meeting their obligations.?

This risk manager said ?carriers need to make a stronger case with the general public about why they do what they do, and they need to spend more time with their claimants explaining why some items in a claim are not covered, or what the claimant can do (without being overly burdensome) to document and receive payment on a claim.?

One respondent said that carriers should help their clients ?see out over the horizon and determine what threats are looming. We need the insurance industry to continue feeding us information on risks they anticipate being hot spots in the future, and delivering products designed to meet those challenges.?

That sentiment was seconded by another buyer. ?Our biggest challenge is meeting new and emerging risks (whether from new threats or from changes to known and existing threats). Insurers can help with that by investing in sound, creative thinkers at all levels of the organization; by providing frequent, topical and timely seminars/webinars and articles on those topics; and by providing us with access to the visionary employees that are already within their organizations.?

Many buyers would just welcome an end to the boom-and-bust commercial pricing cycle. ?We need consistency [from carriers],? wrote one respondent. ?Having premiums up 25 percent one year and down 25 percent the next is difficult to explain and even harder to justify. Rationality would be a refreshing change.?

?Better communications? was cited repeatedly by the risk managers surveyed.

?Communications are improving and are not limited to the broker interacting on our behalf,? said one risk manager. ?As the client/insured, I want insurers to know we’re not just pieces of paper with underwriting information. We’re a business working to improve our financial viability, reduce our losses, etc. I like them to put a face with a name, and I’m better able to do that now.?

?Insurers appear to further recognize the need to have continuous dialogue with clients in our ever-changing world,? noted another respondent. ?Insurers realize that over the years we have seen dramatic shifts in catastrophes, technology, regulations and other areas that exceed anything envisioned in previous years.?

?The insurance carriers appear to be taking on an educator or disseminator-of-information role by offering very informative and qualitative newsletters and bulletins,? according to one responder.

Commercial insurers wondering what they need to do to attract and hang on to their customers got an earful from the 411 buyers responding to open-ended questions about what they want from their carriers, as part of the first Risk Manager Choice Awards survey, conducted by the Flaspöhler Research Group in partnership with National Underwriter.
Forty-five percent of risk managers surveyed said their relationships with insurers are ?improving,? but many had a lot to say when asked: ?In what way, specifically, are relationships improving, and why??

Sticking with a client long-term, through good and bad times, was a key attribute mentioned by many of the risk managers responding to the survey.

?Most insurers bail off large risks after a significant loss,? wrote one buyer, echoing the complaints of many respondents. ?They need to be able to underwrite someone who has gone through a difficult situation. The mentality is they could lose their job, but after all, why are they in business??

?I continue to try to encourage long-term strategic partnerships,? one respondent noted. ?The market?s response has been somewhat cyclical to this. At the moment, we have great and improving relationships with the major players in our coverage portfolio.?

?Carriers have been willing to give us pricing concessions and to assist more in loss control,? according to one buyer. ?They remain loyal in spite of occasional losses. They appreciate our desire for a long-term relationship.?

?They have stood by our company during difficult economic times, and the relationships have been strengthened by that fact,? added another risk manager.

?Relationships are improving due to focused communications and more transparency,? observed one respondent. ?This is happening because our broker is lining us up with underwriters whose approach and philosophy matches ours. We improve our relationships because we focus on it and put much energy and effort into communications and face-to-face meetings on a regular, periodic basis.?

?With the economic downturn and resulting changes to premium, I have seen more loyalty from carriers than anticipated,? according to one risk manager. ?For the most part, communication has strengthened and they appear to be motivated to help us ride out the recession. It has been difficult to attract interest from new carriers.?

When asked what, in their view, is the best indicator of quality in a commercial insurance provider, many respondents listed strong balance sheets, competitive pricing and flexible coverage options.

Overall, though, one risk manager summed up their favorite quality in a carrier by insisting on a ?partnership mentality.? Another cited ?the ability to listen rather than just tell.? A third said they wanted a carrier that is ?willing to evaluate us on our own merits (and demerits) rather than pigeon-holing us into pre-set categories.?

Poor claims-handling was a particular sore point for many buyers. One risk manager emphasized the importance of having a carrier that ?doesn’t panic in the face of a significant claim.?

?When an insured has a loss, the carrier should treat the insured as a long-term partner rather than an adversary,? suggested one risk manager.

?We need acceptance of claims for things that are truly covered, versus some insurers who question and beat you up even when it’s obvious the loss is covered,? complained another respondent.

?The only reason anyone buys insurance is so that valid claims and losses are paid,? reported one buyer. ?It has been so disappointing to see claims adjusted in a vacuum without underwriting being involved. Items that were clearly intended to be covered by the underwriters and client are continually second-guessed by claim adjusters angling to avoid paying anything.?

This same risk manager warned that ?if this continues, customers will continue to use alternative risk-transfer mechanisms versus traditional insurance.?

Loss control advice and support is also greatly appreciated by buyers, the survey found. One cited as critical a carrier?s ?interest in and ability to help you prevent losses.?

That same risk manager emphasized the importance of fraud prevention in keeping an account?s loss history and premiums under control. ?We need a back office that follows up on the insured’s evidence that a particular claim is fraudulent, or gravely in error as to the facts. We have seen our premiums increase dramatically because of a claim that was completely fraudulent, that the insurer decided not to pursue, despite all our evidence.?

When asked to talk about their greatest risk management challenges, and what commercial insurers can do to help them overcome such hurdles, risk managers responding to the survey offered a plethora of suggestions.

With this year?s financial meltdown, many risk managers expressed concern about whether their insurer will be able to pay claims. ?Given the current times, it is imperative that insurers keep us up-to-date on financial decisions and back those decisions with legitimate reasoning,? said one buyer. ?This will help risk management sleep better at night.?

Another buyer just wants insurers to live up to their obligations. ?Ensure that the coverage we have purchased will actually be available when the time is needed,? this respondent wrote. ?A good partnership and years of building relationships do not seem to be enough of a driving factor when a large claim comes along.?

Echoing that sentiment was another risk manager, who cited as critical the ?reliability of the coverage we purchase (i.e., the risk that what we think is covered is different than what the insurer intends to cover). Underwriters can be more clear in discussing their coverage intent and more exact in the way their coverage forms and endorsements are written.?

Another was more blunt: ?Many of my non-insurance colleagues assume from the start that carriers won’t pay claims and will do anything, ethical or otherwise, to avoid meeting their obligations.?

This risk manager said ?carriers need to make a stronger case with the general public about why they do what they do, and they need to spend more time with their claimants explaining why some items in a claim are not covered, or what the claimant can do (without being overly burdensome) to document and receive payment on a claim.?

One respondent said that carriers should help their clients ?see out over the horizon and determine what threats are looming. We need the insurance industry to continue feeding us information on risks they anticipate being hot spots in the future, and delivering products designed to meet those challenges.?

That sentiment was seconded by another buyer. ?Our biggest challenge is meeting new and emerging risks (whether from new threats or from changes to known and existing threats). Insurers can help with that by investing in sound, creative thinkers at all levels of the organization; by providing frequent, topical and timely seminars/webinars and articles on those topics; and by providing us with access to the visionary employees that are already within their organizations.?

Many buyers would just welcome an end to the boom-and-bust commercial pricing cycle. ?We need consistency [from carriers],? wrote one respondent. ?Having premiums up 25 percent one year and down 25 percent the next is difficult to explain and even harder to justify. Rationality would be a refreshing change.?

?Better communications? was cited repeatedly by the risk managers surveyed.

?Communications are improving and are not limited to the broker interacting on our behalf,? said one risk manager. ?As the client/insured, I want insurers to know we’re not just pieces of paper with underwriting information. We’re a business working to improve our financial viability, reduce our losses, etc. I like them to put a face with a name, and I’m better able to do that now.?

?Insurers appear to further recognize the need to have continuous dialogue with clients in our ever-changing world,? noted another respondent. ?Insurers realize that over the years we have seen dramatic shifts in catastrophes, technology, regulations and other areas that exceed anything envisioned in previous years.?

?The insurance carriers appear to be taking on an educator or disseminator-of-information role by offering very informative and qualitative newsletters and bulletins,? according to one responder.

© Copyright 2009 National Underwriter Property & Casualty. A Summit Business Media publication. All Rights Reserved.

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