I am often asked: How does loss control make a valuable contribution to the company? That depends on how the organization utilizes loss control and the characteristics of professionals who are part of the team.
If loss control is used primarily as an inspection service that raises objections which are seen as roadblocks to writing new business, then the ultimate financial results will reflect that attitude. Loss control will be ignored as much as the organization will allow, and many poor risks will be placed on the books.
In turn, if loss control is used as a marketing tool, mainly focused on pushing services to promote the sale of insurance, but not focused on addressing loss exposure issues, the same thing will ultimately happen.
Instead, organizations should seek an integrated model that considers loss control an internal partner, a vital part of the insurance decision process, and an important value-added service to the client. Loss control should be at the table as a part of the underwriting and account management process; an equal partner with claims and underwriting in determining client insurability, acquisition and retention.
This integrated model offers a way to measure the contributions loss control is making to the bottom line. First, we can gather feedback from internal and external customers who can speak specifically about how loss control brought value to the business relationship, which is tied to income generated or expenses saved.
We can also track client performance based on their time with us. For instance, we may be able to show that the loss performance of longer-term clients is several points better than newer clients, indicating the impact of services provided.
Finally (and this is an evolving process at Chubb), we have developed better tools to track the clients we interact with versus the clients we do not. Our initial observations are that the clients we interact with more have better long-term performance than those with whom we interact less.
However, bottom-line success loss control professionals to be solution developers and problem solvers. They should be a reason a client cites for either selecting an insurance provider or staying with that provider when it’s time to renew.
Loss control professionals should be open to robust debate and conversation around new ideas and potential solutions. In fact, the best loss control professionals and the most successful are those who embrace change and find ways to be a part of it. Loss control professionals who embody these qualities are the ones that can delight the customer and make a measurable and positive contribution to the company.
What’s your company’s approach to loss control?
—Contributed by Steve Hernandez, senior vice president and worldwide loss control manager for the Chubb Group of Insurance Companies