Are you maximising the value of it in the Cost of Risk?
Insurance is one mechanism to TRANSFER the risk you aren't comfortable to RETAIN as a business or can't MANAGE to an acceptable level.
The challenge for Insurance Companies has always been to find the best risks that have the smallest amount and value of losses.
The reason for this is that they deliver a product where they don't know what "costs" will be for between 1 and 10 years - what I mean by this is what they will finally end up paying out in claims. And the most challenging are those that involve bodily injury, i.e. motor insurance, Employers Liability and Public Liability.
With the development of telematics we have seen Motor Insurers introduce "black box" technology allowing young drivers to benefit with reduced premiums if they drive well or don't drive after a certain time or those who "Drive Like a Girl" to benefit from the fact that women are safer drivers.
In Commercial Insurance the Insurance Broker is frequently the conduit to the Insurance Market and they will go to differing lengths to understand the business, its risks and how it manages them, to then be able to present it in the best light to the insurance market to obtain the optimum pricing/cover/security options.
The new factor in this equation is "risk data" which the business may be producing as a bi-product of its risk management systems and processes. Not only does this data allow businesses to understand how the business and its business units are performing, to Insurance Companies, this information can be gold-dust when it comes to risk selection and pricing, particularly if a business has previously suffered increased insurance costs due to poor claims experience.
So where is this data, here are three examples.
Any business using HS(G) 65 to benchmark their Health and Safety will be able to provide performance scores across different elements of their H&S arrangements
E Learning systems produce considerable amounts of information on training and competency and some also identify risk exposures - important data in terms of Claims Defensibility
System based H&S management systems (such as BCARM) produce quantitative risk data on a daily basis about how the business is managing its risk
And this data won't just help influence Risk Transfer; we have seen client's use it to drive business unit KPI performance and safety culture, in supply chain management and even as part of Due Diligence.