The tough economic climate has put tremendous pressure on most businesses. Unfortunately, in a bid to cut costs many business owners make the potentially fatal decision of reducing their insurance cover without fully understanding their new potential exposure.
It is imperative that in this unfortunate environment we as an industry help our customers understand and insure against the risks which could adversely affect their businesses. In many instances this relates to insuring against small financial losses, such as damage to company vehicles. However, it is even more important to ensure that potentially crippling or catastrophic risks are mitigated.
In general, our customers know that improving their risk exposure has benefits for them. However, it becomes difficult when these improvements require significant capital outlays, such as when an insurer requests sprinklers to be installed. Due to businesses being under financial pressure, many push back on these requirements, resulting in substantial losses. Where possible we need to look for alternative, more cost effective solutions. However, if there is no alternative and we believe that the requirement is necessary to mitigate a serious exposure and ultimately benefit our customers, we need to clearly explain this and stand by our requirements.
We also need to continue encouraging our customers to use qualified and skilled insurance brokers. They will take the time to understand a business and its value chain and have the required knowledge and experience to provide the best solution to adequately mitigate the risks businesses do not want to self-insure.
At Mutual & Federal, we really make it our business to understand what is important to our customers. We believe that, if we as insurers really care about our customers’ business, we can evaluate their losses efficiently and fairly, making it easier to provide customer service excellence as we protect what’s important.
Commercial brokers have an important responsibility to provide business owners with sound advice, dependent on their level of expertise. Unfortunately all areas of our industry are finding that commercial underwriting skills are deteriorating and the broking market shares this issue. Mutual & Federal therefore continues to empower and train our broker partners on our various products and keeps communication channels open at all times. We believe that, if we work with our brokers, we can formulate an appropriate solution that satisfies all parties.
As an industry, we need to work together to find more creative and impactful solutions to address our underwriting skills shortages, to ensure that our industry continues to provide our mutual customers with the advice and risk management solutions they have come to expect.
Nirven Maharaj, Mutual & Federal Head of Underwriting & Actuarial Pricing