Your Custom Made Product
Meticulous product design is key to optimising premium spend, but is rarely done by Insurance Buyers. Many clients simply accept the policies offered by insurers, which have the typical following implications:
XS & AGGs have limited impact on premiums
Many clients expect large premium reductions if they increase their excesses
When we read the policy coverage, we see that insurers are right not to reduce the premiums by much
We have extensive experience of educating clients on how to achieve premium reductions, safely and strategically
Cover limits are often excessive
We often see EL/PL cover limits of as much as £100m per occurrence in the public sector
Since 99.999% of occurrences only give rise to a single claim (eg a slip/trip claim), you have £100m coverage x 100s of potential claims. You only need this level of cover for perhaps 1 or 2 individual claims
It is the cover limits which drive the premiums, not the XS/AGGS
We have years of experience of designing bespoke “split limit” policies, whilst remaining ELCI/RTA compliant, if needed
Your Best Provider
If you have a bespoke product design, optimal to you, it is often assumed that, the larger the broker (and insurer), the more experience they have in that bespoke product. However, the key points which are often missed are:
Where does your money go?
Many clients are asked to pay premiums to a third party (ie neither the broker nor the insurer)
- The receiver is usually a wholesale broker, for whom the client has not carried out any AML (anti-money laundering) checks
- You should never pay money (especially public money) to a third party you have not carried out AML checks for
- We have identified these AML issues regularly for public sector insurance placement
How do you know that you made the right decision?
- At the next renewal, many clients simply ask for policy to be renewed “as existing”
- We have educated clients extensively on what MI is needed to review the previous year’s decision
Do you have substantial sources of data?
We assess all of the above as standard in our Full Heathcheck, which covers an overview of your current state, and implications for the insurance premiums you are paying and consequent implementation recommendations, in the following areas.
- Your CustomMade Product: Optimal XS/AGGS/cover limits; premium range before broking, robust LTA wordings, compensation scheme access, Solvency-II friendly risk marketing, sales taxes
- Your Best Provider: insurer profit margin analysis, solvency II capital coverage, freebies, premium negotiation evidence
- Your Money: AML checks, contract certainty, claimant security
- Your Review Process: Decision review, emerging solvency II strains, new products, premium rates and trends
Note that a Healthcheck covers an overview of your current state. Any Implementation recommendations for improvements are covered in an Implementation Plan.