News
Risk managers looking to cut costs and change service providers
A survey conducted by Captive Review of a broad range of risk managers has indicated that more than half have considered changing services providers and over two-thirds are looking to cut costs in a variety of areas.
The survey, which drew respondents from a broad geographical spectrum and range of industries and which included both captive owners and non-captive owners found that 53% of those surveyed had considered changing service providers in the past two years.
In addition, 67% of respondents are actively looking at ways of cutting the cost of their risk financing.
Of those respondents who were considering, or had recently considered, changing service providers, 46% said they wanted to put their broking contracts out to tender. Another 17% had considered changing their captive manager and 13% their primary insurance carrier.
Reasons for a change in service provider varied. Many cited regular tender reviews as the driver while others listed value for money and creativity as key factors. The importance of personal relationships was highlighted by more than one respondent who listed personnel changes at the service provider in question as a reason for moving business.
Over a fifth of those surveyed are considering self management of their risk transfer program as a route to cutting the overall cost of risk, although 16% said an increased focus on risk mitigation and loss reduction would help to achieve savings.
A reduction in brokerage fees and reinsurance rates also featured high on the list of cost-saving exercises, as did adjustment of premium levels.
Despite this, brokers generally scored well on cost and efficiency, although some respondents described their responsiveness and availability to clients as ‘below average' and even ‘poor'.
Managers fared similarly, scoring best on availability and worst on cost.
Investment managers did surprisingly well, indicating that the strategies they advised clients on had stood them in good stead through the economic downturn.
Audit firms received the highest percentage of respondents voting ‘below average' or ‘poor' for actuarial services, with 10% citing poor costs, 6% poor efficiency, 6% below average responsiveness and 5% poor availability.
For some clear thinking on these and other insurance matters please contact Paul O'Connor or Nigel Wallis on 0151 906 1000.
