Trials and Tribulations of Running An Insurance [and Risk] Section

Roy Adams Head of Insurance and RiskLondon Borough of HackneySouth East Alarm November 2007

Background

Who is this talk aimed at?- anyone who is hoping to manage their own insurance function, those who are and want to share their knowledge– in breif everyone!

Why?- the old role of insurance has changed and is changing rapidly. No longer can we offer the old style services and hope for the quiet life..

Ok so what do we do?

We provide the insurance [and sometimes risk] support to our organisations, in effect we are the corporate insurance experts

Our decisions and advice can either protect or expose our authorities [£m’s?]

The way we handle issues such as claims and risk can affect our reputation.[+ & _ve]

Get it right no one notices, get it wrong then..... Members, LGO,CPA, P45

Quick Wins [Don’t reinvent the wheel!]

No matter how good you think you are no one knows everything.[Even me!]

So dont be afraid to ask, network, team, colleagues, peer boroughs, even your boss...

Alarm was formed from a network and is now the biggest collective of knowledge in the UK/World??

So ask, share, benchmark, liase etc, but always say thanks and never forget to acknowledge..

Short Cuts

Don’t waste time with a blank sheet of paper- use a shortcut consider what you need then what could provide a template, or if others have something you could use.. Tenders, Protocols, Highway forms, tow away check lists, excel spreadsheets,

Use benchmarking great source of information and comparators such as?

Research , performance unit, OGC etc

Gershon and other Risks

Everyone thinks they are an expert on insurance, that savings are easily obtained from Insurance and therefore ask!

So know how you compare with your peers, size of section, what you do, what the costs are

Covers, once again it is important to know what insurance ands excesses you have and how this compares

Make sure that you have these figures available and how to use these to your advantage

Useful Data

ALARM comparators, Audit commission reports “learn from the mistakes of

others!” Benchmarking, not just CIPFA, set up your own Business rates so if estates dont know ? Post code searches, GIS Fire reports, Police reports, Health & safety [SLA?] Pension reports

Useful Equipment, Reports and Systems

Claims handling LACHS, and others but must be used effectively, used properly provide good reports and essential unless a few claims

Digital cameras and CCTV records Highways, Housing and Estates computer system if possible

get links some have pics Information e.g. details of claims and why paid and even

better why defended.. Audit report forms DFES teacher net Other WWW sites including solicitors, insurers, brokers, HSE

Why- Knowledge is Power

With the information mentioned you will know if you are offering VFM, how you compare and where you are weakest and strongest

Plan out the desired outcomes and keep it simple, share your ideas with your team

Use this knowledge to make sure that your team and insurers, claims handlers and others know what you want and are working to an effective outcome

Good results and the desired outcome proves that you are effective

How to tender

You should tender every 5 years or less,VFM? Must ensure that you reach the widest market to get the best

response, gone are the days of simply going to a single insurer, the AC and your procurement will criticise

Use a broker, they have access to the market place and experience of tenders, get the broker in at least 6 months before the tender.

Agree a fixed fee and no commission.. Brokers then agree the marketing, involve your procurement And if it goes right you get the credit, if it goes wrong you can

blame them!!!!!!

Tender Options

What to insure, self insure or perhaps not insure -How much risk to retain, use the claims data and get actuarial check to see what provisions needed... Talk to your Director to make sure there are the funds for next few years..[remember forward financial planning so talk early!]

Know your risks, using the data mentioned earlier you have your property lists values, claims experience, risk management measures

You will benefit if the tender is fully detailed and insurers will give better rates and quicker return remember that your tender is not alone....

Useful touches

Photos of key risks better than just words Claims details of any claims over £10k, what happened, the

outcome and whatr you are doing to stop it reoccurring Vehicle lists, driver training details, Risk and H&S management initiaitives, dont forget the obvious,

if you have an efficient and audited system say so.. Provide links to your WWW Claims triangulations & trends [up or down?] Future plans, projects, partnerhsips, outsourcing Policy covers required and not too many options..

Changes or Alternatives

London Mutual and CARIG- check the covers and procurement issues. Long term you must identify and review the exposures, potential liabilities and all the risks + and –ve and ensure these are reported

Self Insurance and buying re insurance, can be done but needs large funds and AC may ask..

Not insuring.. Can be done but there are risks ask Hampshire!!!

Consortium purchase- good option meets several goverment agendas [Police and Fire]

Other Trials??

LGO, frequently used by claimants disatisfied with the outcome of a claim.

The legal issue is not the remit of the LGO, as there is recourse to law, however you need to watch for delays...

Members- remember your job is worth one vote! But around election times public use complaints to their advantage..

Therefore always useful to have independent claims handlers, and ensure that you check any decision is right... Sometimes errors arise..

New Management New ideas?

New management always wants to make a mark, restructure etc or even more radical like outscourcing.

Make sure that your section and its activities and benefits are well known beyond the finance areas [Friends in High places Good reputation]

Simple wins, Insurance booklet with cover, regular reports on claims and costs, organise training [Get known good PR pays dividends]

Know your CEO..... And key directors it’s networking again.....and again

Relationships

Sadly many insurance sections management reports concentrate on the negative issues such as number of claims outstanding costs etc.

Turn it round use the computers or data to your benefit, these are not your claims they are the directorates, you are trying to defend them. Report on claims costs per directorate , if they are not repsonding to requests etc never be afraid to say the claims cost will be recharged.. Hence the link with the insurance booklet

Back to the Hidden Agenda- What Does Your Insurer want?

Profit, sorry that’s the main reason for being in business.

To minimise their own exposure and costs but get the best [maximum] premium in for the risk, hence excesses, self insurance etc.

Market share the larger the number of risks the better the portfolio and of course reduce the competion

Like the recent case for sprinklers there are differing opinions and views from the Authorities and it is important to understand these when negotiating

What do you want?

Everthing for nothing.. Ok we all do but some things to consider

Independent claims management, reduces the risk of “desk clearance” and pre renewal reserve adjustments

Insurers not keen, and worry about claims audits but then do they audit their own departments?

Keeps costs down and correctly negotiated can keep insurers happy.

No complaints!!!

What else do you want?

Electronic information exchange Regular meetings to identify deterioation of claims or

other issues Good risk management services Good relationships with underwriters Flexibility on cover Knowledge of the LA market Consistent underwriting and claims approach Willingness to pay...... And No complaints [again!!]

Consider

Accidental damage on leaseholders and commercial covers– less complaints over cover/not covered

Stop losses Selling off old claims – release funds SLA with insurers Best portfiolio mix and match – best fit options Limits of indemnity – how do you compare? Approach to waive of subrogation – don’t!! BSF EGOV etc etc Annual fund reviews

What does your Director want?

To know what has been arranged covers the risks that cannot be budgeted for

To have financial stability with managed risks and no audit exposures

To ensure that claims etc are handled and funded VFM Comparison and benchmarked to others Good accessible data

Remember

You are not alone, never make changes for the sake of change, change to make it better...

Use your team , brokers and insurers explain your desired outcome and seek their solutioins sometimes you will be surprised

Speak to other directorates if training members ask member training what works, use communications to assit with marketing

Speak to other insurance and risk managers Use knowledge of Health and Safety, EPOS,procurement,

projects, Audit and others in the risk family, for example LBH have risk surgeries

Keep it simple, make it work, and use the outcomes

Errors and Problems

If its going wrong its easier to sort out than when its gone wrong, always encourage early reporting

If its already gone wrong then sort out a solution and deal with it Never ever try to hide it, the results can be worse than the error Always keep everyone advised, if it was a policy error then it can

be sorted, if it was a knowledge error training can prevent re-occurrence, if it was a system change it.

If it was someone else’s liaise and get them to deal and confirm Always have a solution when you report an error say what you

intend doing and then do it Errors can be managed and lessons learned..

Finale

ALARM has over 1000 years joint experience in risk and insurance issues

There is not a lot of things that are totally new, after all MMI was a mutual

Never be afraid to ask or to challenge, a constructive criticism is always welcome

A good idea is even more welcome!!!! Everybody learns something new every day, the day

you don’t is the day to worry about..

Thanks for Listening

Today’s lesson learnt

“Most people learn from their mistakes, personally I prefer to learn from the mistakes

of others”

Otto Von Bismark