A -  General considerations for risk management

Auto insurance?

Transfer to an insurance company of frequent claim (low cost and predictable) is only interesting for broker’s commission and for the claim department of the big insurance company. That’s why frequency must be always auto assure, and only random frequency with a relevant cost should be transfer to a captive auto insurance. However not all the companies can accede to this kind of re-insurance –but we are working on it! Source: ABK

Where are we going?

Even if 10 years ago it was normal to auction off insurances and to try to put the pressure on the brokers, nowadays the market requires a system based on “talent”. Today, but mainly in the next coming future, risk managers in charge of insurances will be as important as the insurance company is. The fact is that is not important to have an international brokerage that has growth in an American way. Furthermore we do think the insurance concentration is probably the answer to the frenetic concentration into the insurance intermediation…as a proof, recently the New York Estate prosecutor has accused the main worldwide broker of increasing prices.

Insurers reward with a more interesting cost the direct contact with the Company, and with professional mediators high talented. Is important to avoid the concentration in the distribution.

So, a key factor is to bring nearer your Company to the insurer because when risk is managed in a long term basis and with ability this allows to have a better approach and cost. In some Nordic countries, the mega brokers have almost disappear because there isn’t too many insurance companies, and the deal company-insurance company without brokers is normal. Source: ABK

Should your broker have an international net?

No.

Today the international networks belong to the insurance companies. Your interest is that your risk manager knows how to deal within the insurance company net. This may be done with internet, and speaking languages. If the own brokerage insurance has to transfer the information inside the group this is going to increase the cost and agility is lost. Source: ABK

Don’t you know that the most efficient way to manage and implement and international insurance program is from a local site?

After few years developing international programs with the first international insurance company, AIG EUROPE, we have learnt that because of the internationalisation of the companies, having internet and languages skills it becomes easier to do policies and manage claims from any point in the world than from our own country.

A worldwide program only requires from a director managing the different persons, speaking languages, with internet, and with a deep knowledge and understanding of the insurances market and risks. Is the easiest, most efficient, and the less expensive option for your company. Source: ABK

Currently the best way to increase the premium insurance is to auction the risk amongst the insurance companies?

One of the most powerful manager in Spain told us: Insurance company XYZ invite me to a commercial trip in a promotion. Finishing the trip I asked how I was going to be quoted and they answered that I wouldn’t be quoted, because the Manager, following the “auction style” had terrible troubles to find someone to sell the risk, Because he used to sell those risks every year less expensive. Obviously, cost has multiply per 2 in three years. Source: ABK

What is really important when we are trying to expose an insurance program to an insurance company?

What is important today:

1- Understanding the claims:

Detail of the statistics, evaluation of the consequences of the new measures against the claim.

2- Technical aspects in the risk transfer:

Determine the PML, first level risk, claim franchises, aggregated franchises, Alternative Risk Transfer…

3- And even more important than the technical aspects:

The perception of the subjective aspects of risk that may interest the insurance company for the coverage and depends directly on the talent of the account manager (our Associated Director). Source: ABK

I am afraid of having a claim an having to cope with the insurance company

When there is a claim, we have to analyse the contract. Every time there is less margin to the doubts. Claim are in the contract or aren’t. For instance, 15 years ago, material damages were assured only in case of explosion or beam, currently, policies are “all risk” and they cover any kind of accident.

In defence of your companies we can confirm that in case of the insurance company having a severe payment policy, they would have to face some inspections of the “dirección general de seguros”, they would have troubles with “consumer defence association”, unuseful trials, and they will have to cope with the professionalism of the risk manager that may know much more about insurances than the loss adjuster. Source: ABK

The Insurance companies power

Insurance companies have the power to assume risks: the best mediums and the strongest finances. ABK Riesgos y Seguros is the link that must explain and plan the risks to the insurance companies. Relations with insurance companies is a key factor to develop the correct insurances. ¿Who is going to be more helpful in the relation between your company and the potent and international insurance company? A big and sophisticated international broker or a local company, with the right contacts, where the director is in charge of relations in both senses? Source: ABK