In a world of increasing risks, it is crucial to protect your employees, assets and business. Companies are being forced to improve their coverage to meet the risks inherent in their business sector, satisfy the obligations imposed by their board of directors or partners, or anticipate new risks. What if this requirement to be ever more and (most of all) better insured were to become an opportunity?
Faced with a constantly evolving economic, social and regulatory environment, the insurance market has had to adapt and offer new types of coverage. For example, cyber insurance was created to cover harm related to network intrusion, or data theft or blocking. There is a multitude of non-mandatory insurance policies available today. Identifying those that would be necessary and suitable for your business requires thorough awareness of the risks and how they can be prevented before insuring against them. “Every manager must keep in mind 3 questions: what are the risks related to my business? What preventive measures should be put in place? How should I use insurance? Should I transfer all or part of the risk to an insurer?”, explained Etienne Verret, Client Manager and special risks expert at Qualibroker-Swiss Risk & Care. He added: “it is not systematically necessary to take out an insurance policy. The role of prevention is essential in the management of an insurance portfolio. This may involve improving fire safety by installing sprinklers and fire extinguishers, setting up a continuity plan, etc.” There is also the question of risk acceptance. It may be more economical not to take out insurance if, for example, the risk is limited. On the other hand, if the measures and the cost of the preventive actions are disproportionate to the risk, the risk may be transferred, i.e. insured. This assessment and evaluation of your requirements is carried out by the insurance broker. The role of the insurance broker is to place insurers in competition with one another, guide you in the choice of coverage, and the guarantee and excess amounts, and also to monitor your insurance portfolio. It must be continuously adapted to the evolution of the company, its new activities, its new markets, its acquisitions or investments, etc. “Thanks to their in-depth knowledge of the market, the broker is able to provide you with expert advice throughout the life of your policy... Their motto is simple: to find for you the best solution with the best coverage/ premium ratio” recalled Sabino Cella, Client Manager at Qualibroker-Swiss Risk & Care.
There are three main advantages to actively managing an insurance portfolio. First, it guarantees the company’s sustainability. Having the right coverage for your risks protects your company’s balance sheet... and thereby ensures its survival. Second, such management contributes to better control the company’s budget. Risks are financed through premiums which do increase by very much as long as the claims and number of staff remain constant. Lastly, by reducing the impact of risks as far as possible, an efficient insurance portfolio helps to avoid cash flow needs and thereby secure a long-term investment plan. All resources are applied to the operation and development of the business. Such “intelligent” management also optimises human resources. Consequently, a Loss of Earnings due to Illness policy makes it possible to finance the replacement of absent employees while guaranteeing them an extension of statutory compensation. The management of employee incapacity is thus outsourced to the insurer thereby saving time company gains in attractiveness.
Choosing certain types of insurance coverage can create attractiveness to job applicants, retain employees and reduce absenteeism. Companies have several options available, such as additional accident insurance (LAAC), the payment of daily allowances in the event of illness (if not already required under a collective agreement), the introduction of an improved occupational benefit plan for all employees and managers, or additional contributions paid by the employer. All these insurance coverages, which go beyond statutory obligations, must be valued with respect to current and future employees in the same way as the other corporate benefits provided by the employer. Insurance management is one of the components of the company’s benefits policy.
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The world is changing: everything is becoming increasingly virtual and new professions are being created every day. With increasing digitalisation, new risks emerge. Data protection legislation has become much tougher, forcing companies to take greater consideration of the possession of sensitive information or information concerning the private life of employees. Consequently, insurance companies have adapted and expanded their offers. Another finding: insurance has become an HR issue. Employees now pay great attention to the company benefits offered by employers. Employers must therefore include the “insurance and pension” component into their employee benefits scheme.
Companies are now obliged to define a real risk policy. The broker can help them draw up a map chart of their risks and determine what is insurable and what is not. For uninsurable risks there are several alternatives available. Either the company will not accept the risk and decides to abandon the activity. Or it does accept the risk, in which case it has three solutions: internal provisions, which amounts to self-insurance, the creation of its own captive insurance and, lastly, setting up of a risk pool with other companies in its sector through its umbrella organisation.
For both insurers and brokers, digitalisation is the challenge to be met. It corresponds to a growing demand from our clients. A platform has been created which enables all the actors of our industry sector to centralise and send information in compliance with the Data Protection Law and the GDPR. It saves time and provides greater efficiency. At Qualibroker-Swiss Risk & Care, we invest heavily in the development and improvement of our IT tools both to meet the demand for new services more effectively and to maintain our compliance with the highest international security standards. This is the difference that makes us stand out in the brokerage market.
This article was published in Insurance Inside n°23 - September 2021.
Yvan Roux is the Director of the Corporate Business Unit at Qualibroker-Swiss Risk & Care. He has more than 25 years of experience in insurance, pension and HR services at insurance companies and within our group. In such capacity, he is responsible for all services dedicated to Corporate clients.
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