In this edition from the AAIS Webinar Series, titled: The Value of Risk Control: Moving Beyond the Basics, Bryon Snethen, Vice President Risk Improvement at EMC Insurance and Jacob Pereira, a Solutions Engineer at Risk Control Technologies identified the purpose and value of risk control to a variety of stakeholders, including agents, insurance companies, policyholders, and society.

The Values of Risk Control:

According to Mr. Snethen, “the purpose of risk control is to identify, evaluate, assess and analyze risk. Once we do this, we communicate the risk to essential parties.” He added that, “an important part of the risk control process is advising, recommending, and consulting parties as to how to avoid or reduce risk”.

So where is the value of risk control in its relationships stakeholders? Mr. Snethen outlined the following:

The Value of Risk Control

Policyholders: 

• Reduce of cost risk- deductibles, premiums terms & conditions, availability of insurance
• Reduce uninsured (indirect costs)
• Protect image, brand, reputation
• Hire and retain employees
• Maintain service levels to their customers or even stay in business

Agents:

• Access to markets, write more business increase revenue
• More trust from underwriters
• Profit share compensation
• Happier clients lead to better retention

Insurance Companies:

• Avoid unacceptable risk- unprofitable business
• Better policyholder specificities pricing for risk presented
• Attract and retain business that is risk management focused
• Reduce risk of loss
• Provide differentiation for attracting agents and policyholders.

Society:

• Prevent injuries to employees, customers and public.
• Protect jobs by helping keep employers in business
• Communities’ reliance on policyholder organization
• Cost of occupational injuries and death to society
• Reduce stress on health and legal systems

COVID-19 and the Future of the Industry

Mr. Periera believes COVID-19 was a risk no one saw coming. However, it is the “perfect” example of the value of risk control to policyholders. “Even if a risk is unforeseen, risk control is able to provide value to all organizations, regardless of size.” Policyholders rely on the insurance industry to manage risk. And while the pandemic was unforeseen, and may prove beneficial to risk technologies, society as a whole may struggle to view the insurance industry in a positive light in the aftermath.

So, “what is it that insurance carriers can do to promote its positive impact on society? “Mr. Snethen believes it all comes down to company philosophy. Companies can need to show that they’re professional, honest, and have integrity, while exemplifying tangible benefits to consumers. On top of reputational characteristics, organizations can donate money and time to their communities, showing that they care.