Only through a thorough risk assessment process can coverage be matched to true exposures to loss. In identifying and measuring risks of loss, we help buyers of insurance achieve appropriate levels of coverage generally at a significant savings.
We have helped hundreds of organizations reduce their insurance costs while improving their protection from accidental loss. Our services enable large and middle-market enterprises to achieve “best practices” risk management status.
No matter what your needs, ARS will work with you initially on our nickel in responding to your immediate and specific questions and concerns. If a study is needed to determine the appropriate solutions we will provide only those actions that will benefit you and that are agreed to by you. When you work with us, you’ll always have the peace-of-mind knowing that we saved you money first on our fees by working closely with you in the beginning and throughout the process in developing the risk management and alternative risk financing strategy that meets your needs. Although we consult on risk management improvement, our primary services include:
Who designed your insurance coverage and what was their process? Did you know coverage design is your responsibility? More and more agents and brokers are disclaiming responsibility for coverage design. ARS corrects the gaps and overlaps in coverage stemming from coverage checklist program design.
Rather than moving down an inventory of coverage and requesting your feedback on the need for each coverage, we discern how important each coverage area is for your organization by reviewing their cost and benefit.
More specifically stated, we determine the appropriateness of coverage based on an understanding of your concerns, the terms and conditions promised you by your agent, and our knowledge of your industry, and form a written opinion following our review of coverage as to general appropriateness. Our insurance and exposure analysis services provide a more in-depth analysis, our cost is higher, but our value is greater.
Policy Audits/Opinions assist insurance buyers with securing or maintaining bank financing, meeting the requirements of HOA governing documents, help ensure broker compliance with promised coverage and afford the opportunity for improvement in cost and coverage through a critical set of eyes.
Exposure and Insurance Program Analysis
Without an exposure based coverage design, you are most likely spending more money than necessary, not properly covered, and dealing primarily with a transaction-based brokerage firm. At ARS and in the performance of this service, we determine the appropriateness of coverage and pricing after we identify and measure your exposures to loss, evaluate your risk management philosophy and tolerance for risk, and review insurance policies.
Here we also compare viable alternatives involving varying degrees of risk transfer and cash flow benefits, including insurance plans(e.g. guaranteed cost, deductible, and retrospectively rated plans) and self-insurance programs (e.g. captives, risk retention groups and qualified self-insurance). Our process involves:
- Conduct interviews to identify, analyze, and quantify property and casualty exposures, both operational and contractual. Interviews will include visits with staff, including but not limited to the Director of Finance, Human Resources Director and HR personnel, Property Management and Facilities/Maintenance.
- Inspect the physical premises of key facilities and operations for further exposure identification.
- Review loss prevention and safety initiatives to determine how best to achieve greater levels of safety balanced with underwriting approval within the organization.
- Review claims loss experience and in-house procedures for claims handling to determine any process augmentation and cost and coverage effectiveness of the current program and its design.
- Review sample contracts such as leases on real and personal property, agreements for hazardous and non-hazardous waste disposal, security services agreements, professional services agreements, concessionaire agreements, construction agreements, etc. Our review will focus on insurance requirements and risk transfer clauses.
What can a buyer do to avoid undesirable consequences at renewal? For one, keep in mind that insurers are in the business to make a profit for their shareholders. Further, despite any relationships that are involved, what commercial insurers do is not personal. It is just business. Recognizing this allows for you to avoid disappointment. This said the next step is to consider the services of Applied Risk Solutions.
The nature of the insurance marketplace now more than ever requires for many buyers an advocate at renewal to ensure that improvement opportunities are assessed and capitalized on based on market capacity, risk profitability, best practices buying methods free of carrier influence.
Effective negotiation requires:
- Be Proactive
- Order current loss runs, challenge reserves, explain in favorable terms large losses and the actions taken to prevent them
- Highlight all quality risk control and organizational safety programs and initiatives
- Explain the rationale behind the program coverage features
- Be a discriminating buyer
- Establish yourself as the preferred risk within your industry group
- Obsess over insurer partnering, fairness, and relationship
As indicated above, importance is on packaging yourself as a good risk, ARS helps with this and then applies the necessary leverage though starting early, our knowledge and experience from past efforts and in the current marketplace to get you your due. Insurance coverage and overall program design is an evolving effort, tuning up your “risk financing” program and its effectiveness is part of our services. Comparatively, this involves more than securing updated exposure /rating data with is generally the focus of insurance sales based entities.
Working successfully with insurance companies, brokers, claims administrators, and loss control providers on the technical aspects of service and in monitoring these efforts through audits well equip ARS to assist you in assessing the performance of existing vendors or in your search for alternatives. From our hands-on knowledge of the varied product and service delivery methods utilized by brokers, carriers, third-party claims administrators, actuaries, and reinsurance intermediaries, etc. combined with our collaboration with our client’s purchasing personnel and risk managers, we maintain systems and tools reestablished each time we perform services to well educate your organization on the different structures and flexibility applicable in meeting company goals. We are a value-based partner in this regard – ask those that have used us in this capacity.
A well-constructed Request for Proposals (RFP) should specifically delineate the services desired and any special arrangements that should apply. It should also provide potential service providers with pertinent information about the organization’s operations (e.g., type of business, annual payroll, demographic dispersion of operations) and its risk management program (e.g., claims volume, risk management personnel, and areas of responsibility).
An RPF process for insurance-related vendors is highly technical, please allow ARS to demonstrate for you where our fully developed system can empower you at relatively little expensive considering the fees paid to the organizations that you are selecting.
Professional marketing of your insurance provides for the up-most buyer’s leverage in receiving these benefits: coverage and service uniformity, lowest cost, broadest coverage available for the cost, a comprehensively displayed analysis of the all programs, and a broader field of alternatives received. ARS’s proven systems and involvement brings underwriting, insurance, and exposure assessment skills together to achieve “best practices” coverage standards to your program while overcoming underwriting objections and concerns. The measurable benefits received and expressed by our clients include: created alternatives to the expiring program; strengthened the organization’s underwriting database, reduced costs or controlled increases by facilitating increased levels of competitiveness, improved the levels of protection by focusing in on the specific exposures of the organization. In our process, all participants are provided the same risk management data, historical program information, coverage specifications and limit structures to work on submitting their proposals. We also furnish analysis worksheets to help facilitate a thorough analysis of proposals secured from the various providers.
Claims Audits and Oversight
Self-insured claims represent the greatest program expense and as a variable cost offer the greatest savings opportunity in controlling the “total cost of risk” of your program. We perform program audits every three years or as part of a fee negotiation process. A large part of ARS’ consulting time is spent analyzing losses in our claims management services and in our auditing practice. In the performance of both of these services, we review the claims handlers philosophy, organizational structure, staffing perimeters, claims flow, and handling standards. Our combined quantitative and qualitative approach to claims oversight is truly unique.
Claims audits need to be done by an independent eye and review claims procedures, reserve adequacy, claim payment accuracy, etc. Many professional risk managers feel that their organization as a self-insured has not made adequate use of periodic claims audits. The reason for this is inadequate budgeting. ARS through our counseling of self-insureds on the value achieved through our efforts is helping increase the already growing trend toward such audits. Our claims audit or specific claims oversight activities are used by organizations that have purchased retrospective rating programs to assure that the claims are fairly represented in the retrospective rating (and also experience rating) calculations. Normally, claims audits are intended to evaluate the accuracy of loss reserves, determine if there are any fidelity problems, and evaluate the quality and costs of the claims administrator’s services.
Group/Association Program Reviews
Looking to develop, maintain, or join a group/association program, but wish to make sure your desires are its purpose? There are so many different programs offering similar features, but their structures and benefits vary based on immediate needs and long-term goals. A professionally performed feasibility study, operational review or bench-marketing study in the context of forming, maintaining, or joining a group program is critical to meeting your needs not only in the short-term but in the long-run. Under the right circumstance, these programs are the right solution. ARS has the experienced team to help you make well-informed decisions. For group insurance, there is indeed a discernable program evolution that is apparent. Some groups may be looking at the complete gamut of program options, our analysis can focus on the specific program in question but allows you and us to consider the alternatives. You may be an evolutionary step away or be ready to fully control your destiny with other quality members.
Self-Insurance Feasibility & Risk Financing Studies
Looking to develop, maintain, or join a group/association program, but wish to make sure your desires are its purpose? There are so many different programs offering similar features, but their structures and benefits vary based on immediate needs and long-term goals. A professionally performed feasibility study, operational review or bench-marketing study in the context of forming, maintaining, or joining a group program is critical to meeting your needs not only in the short-term but in the long-run. Under the right circumstance, these programs are the right solution. ARS has the experienced team to help you make well-informed decisions. For group insurance, there is indeed a discernible program evolution that is apparent. Some groups may be looking at the complete gamut of program options, our analysis can focus on the specific program in question but allows you and us to consider the alternatives. You may be an evolutionary step away or be ready to fully control your destiny with other quality members.
Merger and Acquisitions Due Diligence
Mergers and acquisition activities and their completion have significant implications for the risk financing process. Unfortunately, decisions are often made without consulting insurance brokers because secrecy is usually considered to be an important part of the negotiation process.
Depending on upper management’s awareness of risk financing issues, professional assistance may not become involved until after the decision to acquire has been made. Much of our consulting in this area has taken place under these circumstances. As a result, the risk financing effects of a proposed acquisition aren’t considered until negotiations are well underway, or even until after the acquisition has been completed.
Although early is better, ARS is a proven asset in the “due diligence” investigation, which allows the purchasing company to examine the target business prior to final purchase, Through an opportunity to evaluate the seller’s loss exposures, ARS can assess risk financing implications, and determine how these factors impact the transaction, the price for the acquisition and whether it should be concluded at all.
Risk Management Program Reviews
Since every organization has someone or a committee to perform the functions of a risk manager in helping the organization develop and evolve risk management awareness and effectiveness throughout the organization, Applied Risk Solutions is retained regularly to formalize, augment or administer this critical function. Many organization know their undeveloped strengths and contact us directly to assist in specific areas. With others, we are fortunate to be asked to validate best practices as they are occurring, make recommendations in key areas warranting significant improvement, and outline in practical terms the prioritizing of the actions to be taken. Although this effort can and generally does involve a risk financing program assessment, it is not to be confused with being limited to only this one important area of risk management. Our assessment involves significant data review, thorough and often scripted out interviews with key operations staff. All of our efforts are geared towards the assessment of the fourteen commonly established functions of a risk manager and how these efforts are either performed and assisted by and embraced by each critical operational component of the organization and emphasized by executive management.