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Insurers and brokers must adapt to risk managers' evolving needs: Report

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Insurers and brokers must adapt to risk managers' evolving needs: Report

Insurers and brokers need to adapt to help meet the evolving needs of risk managers, according to a report released Wednesday by J.D. Power and Associates and the Risk & Insurance Management Society Inc.

The J.D. Power and RIMS 2014 Large Commercial Insurance Report is based on responses from nearly 1,000 risk professionals or employees of organizations with at least $100 million in annual revenue.

Because risk managers are increasingly being tasked with broader duties as enterprise risk management becomes more prevalent, there is an opportunity for insurers and brokers to provide greater support, Timothy Bebout, Hartford, Connecticut-based director in the commercial insurance practice at J.D. Power, said.

“Brokers and insurers need to understand how a risk manager's needs change over the course of a policy period or several years,” Mr. Bebout said. “You can no longer write an account and wait until renewal of the policy to take into consideration any new needs.”

Mr. Bebout said an additional insight from the survey was that while risk managers at large firms have specialized needs for both the broker and insurer, they expect all parties in the transaction to work in concert and communicate effectively.

“One thing that came through loud and clear in the results was how important the joint interaction with brokers and insurers was,” he said. “It needs to be well-orchestrated, and risk managers want more interaction rather than less.”

Another insight from the survey is the degree to which risk managers' needs and preferences vary according to the types of insurance they are purchasing. For example when asked why they chose a certain insurer for property coverage, only 16% of respondents picked price as the leading reason. Conversely, when asked the same question about workers compensation coverage, 47% of respondents said it was the most important reason.

“Pricing has a big impact on the retention of an account, but if you look at what was important to risk managers in the study, they really want more coverage options and flexibility from the insurers for property coverage,” Mr. Bebout said.

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