How outsourcing risk control surveys can add value to all parties in the insurance purchasing process
With changes in insurance company structures over the last decade and the resultant downsizing in risk control teams, together with a move to more online trading, the number and scope of risk control surveys has been significantly reduced. Therefore, the benefits of undertaking a risk control survey are being lost over a great swathe of the commercial small and medium-sized enterprises (SME) sector.
The primary reason for undertaking a survey is for the insurance company to obtain a more detailed view of the risk that is being presented, especially in terms of the client's management capabilities, systems and controls and which can only be obtained via a site visit. However, it also provides an opportunity to improve the risk as well as develop a closer relationship with the customer.
Whilst some insurers understand these positive customer relationship dynamics and offer pre-cover surveys, their ability to undertake a significant number is extremely limited due to the reduced resources. For the smaller insurers and MGAs there may be no resources available.
Fortunately, the insurance industry has seen a migration, rather than an elimination of technical skills (including risk control surveying), to outsourced services. Through these, the number of surveys can be increased or decreased at relatively short notice and the cost burden of ensuring appropriate training and competence is also transferred.
This not only allows for flexibility on the number of surveys undertaken but also their focus (for example, on food manufacturing risks or where there is a high risk of flooding), thus benefiting from the local knowledge that the outsourced risk control surveyor brings, having seen similar types of risk from a number of insurers and MGAs.
With the variety and range of businesses in the UK ever-growing, there is also an increasing requirement for both generalists and specialists, with the generalists picking up the volume SME type surveys and the specialists dealing with the more challenging risks. Again, outsourced risk control resources can provide this flexibility.
Insurers and legislation have pushed considerably more responsibility for relevant risk information back to the broker. A risk control survey commissioned by the broker not only provides the detailed risk information the insurer is seeking but makes the broker presentation stand out from the crowd when competing to get a quote.
If a buildings valuation is also included within the risk management advice the broker provides, the customer feels they are getting some value from their insurance purchase, as well as appreciating the advice of the broker.
In the world of increasing online trading, the benefits a risk survey can bring can be easily overlooked and while there is a cost to undertaking a survey, the benefits (both tangible and non-tangible) often outweigh the cost. Fortunately, risk control expertise is still available in an out-sourced environment and can add significant value to all parties in the insurance purchasing process.
To find out more, visit: www.agb-risk.co.uk
Don Oakley is commercial director of AGB Risk Control Services Ltd
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