Risk managers give their verdict

UK risk managers have delivered their verdict on the service they receive from their brokers and insurers in the results of this year's StrategicRISK UK Corporate Insurance Buyer Survey.

Last year’s leader, Heath Lambert, retained the overall top slot amongst the brokers joined by FM Global for the insurers. But many other players improved their rankings on individual service dimensions resulting in significant movement in the overall rankings, including some new entrants to what has now become the Insurer Top 15. (Please see table below for the full rankings).

The following is a summary of the research findings, the full report will be released at the Airmic conference in June.

Methodology

The survey asked eighty Uk risk managers to rate the service that they receive from their brokers and insurers and to provide as much comment, both supportive and critical, as they felt able. Brokers were rated on four service dimensions; responsiveness, ability to understand changing business needs, practical leverage with insurers, and level of risk expertise – and the insurers on five; ease of access to decision makers, timely and accurate documentation, value for money given quality of cover, speed of claims settlement and fairness of claims settlement. The overall rankings were computed by totalling the scores for each service dimension.

Respondents from both the private and public sectors responded to the survey and although slightly less in number than last year, provided a significantly higher number of individual ratings for a wider range of insurance companies and a similar number of ratings for the brokers. Additional survey questions probed issues such as the transparency of brokers’ remuneration by insurers, how brokers had managed their customers’ changing risk profiles in these economically challenging times and which aspects of claims management service are most valued by risk managers.

“Broker remuneration was less than fully transparent for around 44% of respondents

Leaders’ performance

Between the insurers, FM Global’s ratings for all service dimensions measured, except claims, completely outranked the rest of the field. However the rating sample for the company was small indicating that it has only a minor market presence amongst this group of respondents. Nevertheless, those who used FM Global’s services gave excellent ratings and very positive feedback. “Proactive, excellent resources and works closely with the insured” was a typical comment. The only cloud on FM Global’s horizon was that it did not lead in either of the claims service categories; Chubb was the clear leader in both leaving FM Global placed 2nd for speed of settlement and 6th for fairness of settlement.

Heath Lambert retained its grip on the top broker slot by performing especially well on level of risk expertise where it outranked all of its competitors apart from Jardine Lloyd Thompson (JLT) who achieved a close second place. “Heath Lambert has provided a tailored approach to our needs” and “Much more professional” are typical of the comments made about the broker. However Heath Lambert cannot afford to rest on its laurels. Comparisons with 2009 service scores showed other brokers were perceived to have made more progress in terms of improving their service. Heath Lambert lost ground in all categories except level of risk expertise.

Comparisons

One of the more significant survey findings showed that 45% of respondents used only one broker indicating that many risk managers are unable to actually compare and contrast service levels between brokers. Aon appears to benefit most from this level of inertia; the company was placed in one of the bottom three places across all service dimensions and received the highest number of negative comments yet still seems able to retain the strongest market presence based on the number of ratings. The company is no doubt helped by some strong advocates who highly praised specific parts of Aon’s business such as its ERM offerings.

Broker remuneration

“Last year's leader, Heath Lambert, retained the overall top slot amongst the brokers joined by FM Global for the insurers

Transparency of broker remuneration by insurers remains an issue for some risk managers. Broker remuneration was less than fully transparent for around 44% of respondents. No broker is able to claim that its remuneration by insurers is fully transparent to its entire customer base. “Be clearer on transparency of contingent revenues and help identify real costs of service provision” was a comment made by one risk manager.

Claims

When it comes to claims management service, most risk managers saw help with the actual loss as the most important service that the insurer could deliver whilst pre-loss services were deemed to be of secondary importance. Although ranked in third place, it is nevertheless interesting to note that one third of respondents saw value in post claims services ranking it of first or secondary importance.

Fully 75% of risk managers claim they have had discussions with their broker(s) about how their risk profiles have changed as a result of the prevailing economic conditions. Many of the comments indicated that any changes were seen and accounted for as a normal part of business. However, a minority of respondents saw the situation in more dramatic terms perhaps best summed up by one risk manager who stated “ I think this is the biggest challenge facing the tripartite (client, broker, insurer) but it is being driven by me, not the broker and nor, just as worrying, the insurer”. This issue was seen in a different light by public sector respondents. As one public sector risk manager commented, “As a public sector body, changes to our risk profile for insurance purposes have not been significant”.

Respondents to the survey will shortly be receiving their full copy of the survey results. For more information or to order a copy of the report contact Tom Sinclair (tom.sinclair@strategicrisk.eu).