Rating Insurance Partners

Report Examines Risk Manager Satisfaction

Risk professionals with ERM responsibility were less satisfied with their insurance partners than those without such responsibilities.
By: | January 21, 2015 • 3 min read

Risk professionals who focus on enterprise risk management (ERM) are less satisfied with their insurance partners than non-ERM risk professionals, according to new research.

The 2014 Commercial Insurance Report — Special Report Snapshot is the first annual customer satisfaction survey conducted by the Risk and Insurance Management Society (RIMS) and J.D. Power. The full report is due to be released in February.

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Overall, risk professionals at large businesses were most satisfied with their brokers (854 on a 1,000-point scale), followed by satisfaction with property insurers at 821, auto at 811, and workers’ compensation at 746.

Risk professionals at small businesses ranked satisfaction with insurance at 783.

As for ERM versus non-ERM professionals, the survey found that risk professionals with ERM responsibility scored workers’ compensation the weakest at 541 on a 1,000-point scale. That was 238 points lower than their counterparts without ERM responsibility.

Risk professionals with ERM responsibilities also ranked brokers (at 828 points) 56 points lower than their counterparts without ERM responsibility.

Of the nearly 1,000 risk professionals who participated in the study, 40 percent have at least some ERM responsibilities.

That’s an unexpectedly high number, said Carol Fox, RIMS director of strategic and enterprise risk and the report’s co-author.

More Than Transactions

As senior leadership begins to accept the benefits of enterprise risk management, the relationship between the risk professional and the company’s brokers and insurers assumes more than a simple transactional role, she said.

“ERMs are charged with coming up with ideas and solutions for risks that may not be insurable,” she said. “This is where insurers and brokers can help.”

For example, she said, the World Economic Forum recognizes water shortage as a global risk. The insurance partner of a business that depends on a plentiful water supply, such as a pharmaceutical or beverage company, could provide scenarios and analytics to help risk professionals and their organizations understand the risks.

“If a water shortage is anticipated within the strategic horizon, maybe 10 to 15 years, the broker or an engineer on the insurer’s team could help the company’s risk professional make plans.”

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In one case, she said, a pharmaceutical company located on a body of salt water built a desalination plant. “The broker can provide those analytics and make recommendations.”

The different findings from survey findings from risk professionals with and without ERM responsibilities suggest that insurers and brokers are not meeting the more strategic and complex responsibilities of ERM professionals, said Timothy Bebout, commercial insurance practice leader at J.D. Power, who also co-wrote the report.

“If the brokers or insurers aren’t involved in the strategic discussions about, say, new locations or staffing, they won’t have a holistic view of their customers’ needs,” he said.

Fox also noted that there was a “significant delta” in customer satisfaction between broker-only relationships and triangular relationships that also includes the insurer.

Client Interaction

The survey found that overall satisfaction fell by 100 points when a property insurance representative, such as an engineer or underwriter, was not involved during both a service interaction or claims process.

“Large commercial buyers really want to get in front of the underwriter to build a trusting relationship,” Fox said. “They want to work directly with the insurer’s engineers and claims adjusters — and that takes face-to-face meetings.

Clients also want direct meetings with brokers, she said. Overall satisfaction declined by 73 points among clients that didn’t have at least two in-person interactions, the report found.

Bebout said that interaction between the risk professional and insurer was the second-rated factor driving overall customer satisfaction across coverage lines.

The highest rated factor driving satisfaction in property lines was program offerings, while claims drove satisfaction in the workers’ comp line. For auto, it was price that satisfied the most risk professionals.

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The study measured separate satisfaction scores for insurers and brokers, which were then weighted by importance and aggregated into composite scores, said Colleen Cairns, manager, insurance industry analytics, J.D. Power.

Insurers were scored on five factors: interaction; program offerings; price; billing and payment; and claims.

Brokers were scored on four factors: ease of contacting; reasonableness of fees; advice and guidance in selecting program offerings; and timeliness of resolving contact.

Respondents were employed by companies with $100 million or more in annual revenue that purchased a commercial property, workers’ compensation, or auto policy with a profiled insurer or broker.

Susannah Levine writes about health care, education and technology. She 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]