By Scott Patterson, Senior Vice President, Business Development, Alexander & Schmidt
This past fall at Loss Control Forum 2016—a gathering of Loss Control professionals from national and super-regional carriers hosted by Alexander & Schmidt—industry execs discussed key issues shaping the strategic direction of Loss Control. One theme that ran throughout many sessions might best be summarized this way: Loss Control is not an expense, it’s a key part of a value proposition to help attract and retain customers, and to help improve loss ratios.
Engaging directly with clients, to fully understand the risks being covered, but also to provide specialized expertise to help control those risks and reduce losses, is where carriers can really make a difference. Having access to technical experts and highly experienced Loss Control professionals with specialized knowledge of emerging hazards, helps create value for both the insured and the insurer.
The strategic role of the Loss Control department inside carriers is understood by Underwriting and senior leadership. “Contributing to the management of the client relationship is one of the most important things Risk Control can do for our company. Risk Control is where we can make the difference for the insured,” said the managing director of the middle-market division of one of the nation’s largest P&C companies.
When insurance companies use comprehensive systems to monitor and analyze industry sectors and regularly evaluate losses relative to premiums earned, they see Loss Control as a value, rather than an expense. “Our systems allow us to run a lot of different reports and managing scorecards so we can effectively run our operations,” said a Vice President of Loss Control at a leading national carrier. “We run quarterly reports and these go to home office management, as well as field management. We look at accounts with certain loss ratios and premiums and ask, has there been a survey done, are they on service and what is the likelihood we will renew the account?” he added.
Evaluating, and learning are keys to improving loss ratios. “Every claim you have is a chance to learn,” said the Vice President of a global P&C company. “We need to take advantage of this and ask, is this a location we rated? Are people delivering where they should be?” he continued.
There are many other ways that Loss Control contributes to the achievement of major business objectives at insurance companies. Clearly, the strategic role of the Loss Control department is key to Underwriting decision-making and the achievement of improved loss ratios. It can also add significant value to business development and retention, and support profitable growth in specialized markets while helping to avoid unnecessary risks.