Brokers

9 Things Brokers Do That Drive Risk Managers Crazy

They may be well-intended, but brokers sometimes drive risk managers nuts with their behavior.
By: | July 11, 2018 • 7 min read

Your broker can be a lifesaver, but sometimes they may not always be doing what the risk management team needs.

1) Relentlessly pushing ancillary services

In full disclosure, I am happy as punch with my broker.

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With that said, my gripe with the industry generally speaking is their, at times, relentless marketing of potential candidates. If they find you are happy with your broker, that is not enough; you then get inundated with a myriad of outreach calls related to ancillary services they provide. You add that to the W/C service trolls, LMS, data, ERM etc. folks and it is literally like guarding a modest hen-house from a pack of wolves.

— Zachary Gifford, director, system-wide risk management, The California State University

2) Not offering their best advice

I’m very happy with my broker team now. That is because I made the changes to the team quickly when I wasn’t satisfied with a particular team member.

Not offering their best advice and standing by while a client makes a poor decision that they (the broker) know is a bad idea. I consider our broker to be integral to our risk management mission and we will succeed or fail as a team.

When a broker tells me after a mistake has been made that they would have made a different decision but “… that’s what you said you wanted to do,” that is really frustrating. If a broker knows the decision the risk manager is making is a bad one, then they need to have the courage to speak up.

— Jim Cunningham, vice president, enterprise risk management, Pinnacle Entertainment

3) Not looping in the risk manager 

A second frustration stems from brokers who have long-standing personal relationships with our executive management team and will communicate with those executives without including the risk manager.

Professional courtesy dictates that the broker should be including the risk manager in all discussions associated with business operations. Clearly there is value in reliable long-standing relationships between the business and the broker. *This concern was echoed by an award-winning higher education risk manager who wished to remain anonymous, who listed “Brokers overlook my requests thinking I am not that important within my organization,” as one of this top issues with brokers.

Back-channel conversations can create issues — such as who is calling the plays — that are not necessary. The risk manager must be part of every conversation that relates to the business.

— Jim Cunningham, vice president, enterprise risk management, Pinnacle Entertainment

“When a broker tells me after a mistake has been made that they would have made a different decision but, ‘… that’s what you said you wanted to do,’ that is really frustrating.” — Jim Cunningham

 

 4) Poor knowledge of the risk manager’s industry

While I understand and respect the impetus of making a sale, one of the frustrating things from the buyer side that most brokers are not cognizant of, is that most brokers are so intent on selling whatever line(s) they are in charge of that they do not spend the time necessary to listen and understand what the risk manager’s top-of-mind concerns are.

Jean Nkamdon, risk management and compliance manager, The Washington Post

I speak to brokers often, and every time they try to convince me they have the best solution for whatever line my business currently has. However it is seldom they actually tell me or share something relevant to my business/industry.

Risk managers are looking for strong partnerships and strong advisers with brokers. However, this is often lost when brokers cannot demonstrate an understanding of the risk managers’ industry, the business landscape and/or trends in that industry.

As a risk practitioner, my expectation of my broker is not only to place my policies but to also be keeping an ear on the ground, to apprise me of the developments in my industry or the market place in general that I should be aware of, so I can have data points I can draw upon when necessary.

— Jean Nkamdon, risk management and compliance manager, The Washington Post & Companies

*This concern was also echoed by the anonymous higher education risk manager, who listed “Lack of intuition and anticipating my needs” as a failure of some brokers.

5) A disconnect between the producer and the servicer(s) of the account

Another area of frustration is the disconnect between the producer and the servicing of the account. I often remind brokers vying for our business that however great the sale presentation is, the servicing of the account is what makes or breaks a relationship with a broker.

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As you know, most producers can drum up business all over the country and get credit for it, while servicing teams are often local/regional teams that actually do the work and are not often recognized for it.

It seems to me there is an inherent conflict built into the brokerage model where producers are incented to drum up business and drop it on the lap of the servicing teams, often with no coordination. This approach ultimately shoots the brokerage relationship in the foot, because unless there is coordination, the servicing team does not live up to the expectation the producing team has created.

I like to joke that I do not want to know how the soup is made, I want the soup. For illustration, each time I have a question, I would like to speak to one person who would coordinate the response to my inquiries from all the lines placed through the particular brokerage relationship.

If I have to chase each person on the service team in charge of a particular line, it is not efficient or helpful, because often situations might have implications that go beyond a particular line that could be lost when there is no coordination.

— Jean Nkamdon, risk management and compliance manager, The Washington Post & Companies

“I speak to brokers often, and every time they try to convince me they have the best solution for whatever line my business currently has. However it is seldom they actually tell me or share something relevant to my business/industry.”  — Jean Nkamdon

6) Speaking out of turn

Brokers often talk about acting as if they were the risk management department or risk manager — which is good — but it is a fine line. I really hate it when I am in a meeting and asked a question or series of questions and the brokers answer before I have a chance to respond.

While they may be acting on our behalf, they are not the risk manager, and I prefer to answer my own questions. They may not know as much as they think they do and sometimes puts the risk manager in awkward positions of having to correct them. It is particularly annoying if I have a senior management person present, because it not only feels like they are more interested in impressing them but it can also make the risk manager look unprepared or uninformed.

Thanks for asking — I feel better already!

—A long time health care industry risk manager

7) Acting like they know it all

It’s important to have an open, honest relationship with your broker/agent. That means being proactive about coverage, claims and changes that may need to be made to your insurance program as a result of your business relationships. Anyone who says “I’ve got this, no worries” each and every time you speak with them does a disservice not only to you, but also to your entity.

“Anyone who says ‘I’ve got this, no worries’ each and every time you speak with them does a disservice not only to you, but your entity.” — Marilyn Rivers

Broker/agent relationships are like any relationships you value. There’s a give and take and discussion as to the dynamic needs of your entity.

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Remember to ask questions, request information and set the parameters of the relationship you have with your broker/agent and your insurer. You are the client. They are your representative as you define your needs.
They’re your needs, not the broker/agent’s. Sometimes folks try and reverse who’s in charge. Remember, the entity within the parameters of the insurance contract they have adhered to is the entity in charge.

Also, it’s important to know your state and local ethics legislation. Risk programming should be transparent and adhere to those ethics regulations. Be wary of expensive dinners and golf games as a representative of your entity.

 — Marilyn Rivers, director of risk and safety, the City of Saratoga Springs

8)  Lack of attention to detail

The broker/client relationship is built on a thick crusty layer of trust. Sometimes, a risk manager wears many hats as a single expert within their organizations and we rely heavily on our broker(s) to be our “team”. Careless mistakes can be sometimes be benign but annoying and other times, they can be costly in terms of dollars AND reputation.

 

9) Inefficiencies

Cumbersome communications, inefficient document delivery, choppy process – all create wasted time for the client and diminishes confidence in the relationship. Things should always be made easier for the client – within reason.

An award winning risk manager in the telecommunications industry

 

What Risk Managers Appreciate

 

1) Forward Thinking

We need our brokers to work with us to stay ahead of the risk curve and during renewals ensure that the coverage we are booking not only covers our business today, but the offerings we invent tomorrow.

2) Understand our Business

Wolters Kluwer is a global company, active in 180 countries in different sectors. It takes time to understand our business. If you don’t, let us know so we can work together to bring you up to speed so you are best able to help our insurance partners better understand the risks we are asking them to underwrite. Once you do know us, grow with us, use your expertise, don’t assume we always want or need the same thing. Good barbers evolve to meet the needs of their client’s changing hairlines. Good brokers should do the same.

3) A Steady, Dedicated Team

We value consistent and seamless teamwork. We invest our time in helping your people get to know us and how we manage risk. When someone is poached, or moves, or is transferred, this disrupts the flow, not to mention our investment.  When these things do happen, which is part of doing business, manage it well. Protect against this risk by building the bench, particularly in high-demand spaces (cyber/privacy). Preparing our NextGen leaders and do-ers to take the helm should start yesterday.

Elizabeth Queen, Vice president risk management, Wolters Kluwer

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]