Often a topic for debate, the issue of insurance as a commodity sparked a great discussion on LinkedIn. I’d like you hear what you have your say in own comments section below.
A commodity is defined a good that is the same no matter who supplies it, and can be differentiated based on price.
Is it true that all insurance is the same aside from price? How do most companies decide where to purchase their insurance?
This is the first installment of five blog posts that summarize the 25 quick tips from my eBook, “Insurance Premiums Are Killing My Business”. The risk management ebook is a great start for any small to medium-sized business owners that are curious about starting the risk management planning process.
The tips below have been written with small to medium-sized businesses in mind, although the same principles should be employed by very large businesses. 
1. Budget for Insurance Price Fluctuations. A key goal of any good risk management plan is to be aware that the insurance market is cyclical and that if prices have been flat or dropping for a few years that they will go up again. Plan for it by budgeting at the top end of the market.
Throughout the lifespan of a corporation, stakeholders can be faced with the risk of economic crime. Often, it becomes a reality long after the issue should have been brought to the attention of the board of directors. Entrepreneur that have invested a great deal of time and energy building a company from the ground up, find it hard to imagine that something as intrusive as economic crime can happen to them.
Do you have the processes in place within your company to mitigate this risk? If you don’t have a plan and solutions in place, there is a possibility that you will be blindsided by fraud, worse yet – there’s a chance it could have been prevented.
Time will tell if the Gulf of Mexico oil spill will kill BP or just severely cripple it, but whatever the case I’ll bet they didn’t see it coming! Will you?
It looks like this spill will be (if it isn’t already) the biggest man-made disaster ever. The extent of the spill, the scope of damage and the resulting impacts on the environment, marine life, economies, and people remains to be seen, but catastrophic sums it up. BP and all of the other world’s oil companies plan for spills. They build complex risk models, examine alternative worst case scenarios, look at maximum probable losses, and they are generally very good at measuring and managing risk. But what if the worst case scenario that you imagined turns out to be wrong?
Today ClearRisk Inc is proud to announce the launch of version 2.0 of its ClearRisk Manager application. Version 2.0 is built to improve every user’s experience. The site is faster, it enables easier collaboration and includes functionality that will allow our users who are Insurance Brokers to interact with clients in ways they’ve never been able to before.
ClearRisk Manager Version 2.0 is designed to be lightning fast. “We’ve increased the speed of the site by almost 4x,” said John Downey, Director of Systems for ClearRisk Inc “we’ve created a seamless experience for brokers; almost unnoticeable page loads and large reports take only a few seconds, unlike minutes or hours for some competitive systems.”
Clients of Insurance brokers are demanding risk management options that go beyond insurance coverage. Some brokerages are struggling with how to effectively provide these services to their clients. That’s why we built ClearRisk Manager. We want Insurance brokers to have an affordable way to provide their clients with risk management plans, risk maps and risk management resources – even if they have little to no risk management training.
Using ClearRisk Manager to help identify, prioritize and manage client risks, brokers can offer affordable risk management support to clients; helping clients get the best terms in the insurance market
We’ve built on this concept in Version 2.0, by adding more client and broker collaboration tools, and increasing the speed of the site even more. ClearRisk Manager 2.0 can be used to store, track and share all relevant risk and insurance information such as insurance policies, claims documents, and insurance certificates. It gives Brokers and their clients the ability track progress they make over time.
In addition, ClearRisk Manager 2.0 introduces functionality that allows Brokers to Co-Brand the secure online portal. It’s important for Brokers to have multiple touch points with clients throughout the year. Every time a client logs on to ClearRisk Manager to work on their Risk Management plan, the host Broker’s logo can be prominently displayed. From the client’s perspective, the Broker is providing them with a software solution comparable to those offered by only large multinational brokers. This, in combination with the collaboration tools above, shows the clients firsthand the value the Broker is bringing to their business.
ClearRisk’s focus has been on increasing broker profitability with mid-market Risk Management Solutions. ClearRisk Manager 2.0 provides brokers with even more functionality to help them become the preferred provider of risk management and insurance products and services.
The following video is a popular resource for insurance brokers who are evaluating the use of risk management as a value added service.
Top 10 ways to use Risk Management to Increase Brokerage Revenue
Come view the new functionality with a 30-day free-trial
or let one of our associates walk you through ClearRisk Manager 2.0 with a 20 min tutorial
I have always been a firm believer that good risk management doesn’t have to be resource intensive, difficult for SMBs to undertake or insurance brokers to provide to their clients. With a little formalization, structure and a strong understanding of your organization, risk management planning can be rewarding.
Risk management does require some investment of time and money but it does not need to be substantial to be effective. In fact it will be more likely to be employed and maintained if it is implemented gradually over time. The key is to have a basic understanding of the process and to move towards its implementation. That is exactly why ClearRisk has developed its newest whitepaper: The Risk Management Process
There are many different risk management models available. Often times these models are unnecessarily complicated or written for an academic audience. We’ve developed this whitepaper from industry best practices and experience and in a way to which business people can relate.
In summary, the five steps in the risk management process are:
1. Identify Potential Risks:
What can possibly go wrong?
The Risk Management Process
2. Measure Frequency and Severity:
What is the likelihood of the risk occurring and if so what is the impact?
3. Examine Alternative Solutions:
What are the potential ways to treat the risk and of these, which strikes the best balance between being affordable and effective?
4. Decide Which Solution to Use and Implement it:
Find the needed resources, get the necessary buy-in and pull the trigger.
5. Monitor Results:
Is your plan working? Are changes or updates required?
The whitepaper explains each of these steps in detail so you can move towards implementing a risk management plan. Click to view the free whitepaper on the Risk Management Process.
The economic downturn has presented its share of challenges for business around the world. Adjusting to the “new economic normal” hasn’t been an easy task as the broad scope of operational changes, closures and bailouts have shown. It’s been a trying time for business, but positive signs of change are beginning to emerge; strategies are being aimed at making the most of the upturn, investments are leading economic activity and strategists are identifying early increases in consumer confidence.
Edging out of the recession and seeing better economic conditions around the corner, it’s important that businesses be aware of the downside of the upside of risk!
It’s common to view risk negatively, but every entrepreneur knows that there is no reward without risk. Risk brings opportunity and is the balance between the upside and the downside. There are many changes that will come with a global economy that is on the upswing; credit will become more widely available, businesses will begin to prosper and begin hiring, business spending restrictions will ease, investments will be made in infrastructure and companies will look for ambitious growth.
As discussed in one of our blog posts from last year, the downturn has been a time for improving operations, strengthening relationships with customers and preparing to make the most of the recovery. Now that the upswing is upon us, bringing positive change and room for growth, it’s important to plan for the risks that will no doubt accompany the opportunities presented. In the upturn of the economic recession, make sure you don’t become your own worst enemy.
We’ve written on the benefits of risk management and on its application by brokers in blog entries like Using Risk Management to Win in the Mid-Market and An Ounce of Prevention: Does Risk Management Really Work? So expanding on that, today The ClearRisk Blog brings you some of the ways that risk management can increase brokerage revenue.
These are just four of the many benefits that the provision of risk management services brings to brokerages and brokers. On Thursday, April 22nd, 2010 at 2:00pm EDT, I will be conducting a free webinar on the Top Ten Ways to Use Risk Management to Increase Brokerage Revenue.
UPDATE: You can view a recording of the live webinar here: Risk Management for Insurance Brokers
Most organizations look to financial risk transfer through insurance as their first response to managing risks. Out of all the risk management tools available, insurance can often be the most expensive option. 
There are a number of simple things that can be done to minimize your insurance-related costs and to get better terms in the insurance market through your broker.
Insurance brokers are thought of as trusted advisors. Being an important point of contact between businesses and the insurance industry, brokers look out for the best interest of their clients and are depended on to ensure that their client’s businesses are protected. 
But what does it really mean to be a trusted advisor? This role, as suggested by Maister, Green and Galford in their book, The Trusted Advisor, is first about gaining the confidence of clients. For brokers, there’s no better way to do so than to provide something of value.
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