Provided by George S. May International Company 

 HUMAN RESOURCES GUIDELINES

Home > Control Insurance Costs

In the past five years, businesses have experienced double-digit rate increases for both property and casualty (p&c) and health insurance. Unfortunately, experts don't expect the rising cost of premiums to level off any time soon. "Risk management" can help to control - and in some cases reduce - runaway insurance costs.

A well-run risk management program that includes employee safety and wellness education, along with regular p&c risk audits can identify issues that directly affect insurance costs by reducing or eliminating claims. For example, an insurance audit may reveal such problem areas as unsafe facilities or employees who don't understand how to use the benefit programs provided for their welfare.

A risk management program can have an even more direct affect on the bottom line. Many insurance underwriters will consider offering competitive pricing if businesses can prove they are actively controlling claims with a well-run program.

In most companies, the chief financial officer leads risk management teams with members from human resources and operations management. The team must establish short- and long-term goals with all team members held accountable for the program's success. An effective program also requires the full commitment of senior management. After all, managers have to know where their risks are before they can create meaningful solutions.

To help implement risk management services, many businesses are choosing their insurance brokers based on the risk management services they offer. The key is to find a broker large enough to provide adequate risk management value-added services. On the other hand, you'll want to be sure that the broker isn't so large that your premium will be ignored.

Finally, keep in mind that there is no cookie-cutter approach to risk management. Each business will have its own unique requirements for a plan to help control insurance costs. Following is a sampling of some of the issues that many successful risk management plans are addressing:

• Internal risk audit procedures for property/casualty/health insurance
• Safety management procedures
• Claim management procedures
• Employee education programs on health and wellness and benefit plan usage
• Internet communication services between brokers, insurance companies and employees
• Formal disaster recovery plan
• Workers' compensation experience modification management
• Health insurance claim analysis and benefit design plan
• Asset protection analysis
• Executive risk analysis
• Employment practices liability prevention
• Directors and officers liability prevention
• Employee dishonesty prevention

Thomas Filippini is a senior partner of Thilman& Filippini, located in Chicago, and a respected author and speaker on Risk Management topics. Thilman & Filippini's risk management practices are in almost every industry throughout the world.

This information is compiled and provided by George S. May International Company.
Visit the George S. May International Company Web site to learn more about our services.