What You Can Do If Your Company Has Had Poor Loss Experience

Posted in: Commercial Insurance, Risk Management Consulting

Changing Insurance Market Hits Some Companies Hard

The “soft” commercial insurance market that persisted from 2005 through 2011 lulled many Property and Casualty insurance buyers into believing that insurance was inexpensive and always available.  The market has turned in the last year or so, and now many buyers are finding that they are facing premium increases and, for accounts with poor loss experience, they may even have trouble finding insurers willing to cover them.

You Can Do Something About Poor Loss Experience

Insurance pricing cycles may be frustrating to you as an insurance buyer who feels you are at the mercy of a market over which you have no control.

But it is important to focus on what you can control.  Safety and loss prevention can have a significant impact on your loss experience, which will result in more affordable premiums and most likely give you more options during “hard” markets.  Over the long-run, your insurance costs are driven up or down depending on your loss history, so the best way to reduce your cost of risk is to avoid preventable losses.

Is Your Insurance Broker Helping You Prevent Claims Before They Happen?

Key Statistics

Frequent losses are costing you more than you think. According to the American Society of Safety Engineers, indirect costs may be 20 times the direct costs. Indirect costs include: accident investigation, training and compensating replacement workers, scheduling delays and lost productivity, administrative expense, low employee morale and increased absenteeism and poor customer and community relations. *

Risk and Safety Management Steps to Help Companies Turn Around Poor Loss Experience

There are steps you can take to help turn your company around after having poor loss experience. At PSA, we partner with a private firm of experienced safety professionals who apply a proven safety management system. They are adept at solving loss problems and getting safety to frontline people – one of the hardest challenges of making safety actually work in your favor. These experts have an excellent track record of achieving results and have helped troubled companies cut their losses by up to 80%. For our clients, we contribute a base amount toward the fees to engage their services.  Many clients have chosen to increase the scope, at their own expense, once they have experienced the value of the safety management services.

In the short-term, we often find that just the act of launching an organized safety approach shows insurance carriers that you are serious about loss prevention. It also has the positive effect of reducing employee risk-taking and engaging employees in their own safety. Furthermore, you should work with your insurance agent to make sure your current carrier – or potential new carriers — know of, and give you due credit for, your safety efforts. In the longer-term, your improved loss profile will really work to your advantage and will likely result in significant insurance premium savings.

If you are interested in learning more about safety systems and their impact on loss control, please contact me at craig@psafinancial.com.

* source  – The American Society of Safety Engineers