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4 Steps for Creating a Comprehensive Risk Management Program

Tuesday, October 1, 2019
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When searching for an insurance provider, businesses are looking for both prevention and protection — but at a good price. As an agent, you can set yourself apart by consistently delivering on all three considerations. The key is to provide clients with education, policies and resources that aim to mitigate their risk and, ultimately, save them money.

Many businesses understand the basic concept of risk management, but aren’t sure where to start. As their agent, you’re in the perfect position to provide them with expert guidance through the learning process.

Helping your clients better understand risk management is a great way to increase the number of positive touchpoints in your workflow, while strengthening your relationship with your clients.

Educating your clients about risk management will help them reduce risks, minimize costs, and maximize success. Indirectly, it could also help you earn new business and improve retention.

When providing your clients with a framework for a risk mitigation process, offer them these four steps:

  1. Identify exposures
  2. Develop strategies to manage exposures
  3. Implement a program
  4. Monitor results

As their insurance agent, it’s your responsibility to help them understand and follow these steps as they seek to reduce risk and increase safety and profits.

  1. Identify Exposures: What Can Your Client Do Better?

The initial step of any good plan is to articulate an objective. What is it you’re trying to achieve? You and your client first need to learn where they are vulnerable to risk before mapping out ways of closing any prevention gaps. There are many different ways to identify exposures.

A simple, yet highly effective, strategy to uncover existing cost drivers is to run a full claims analysis report for your client. There’s software available that enables insurance agents to input their clients’ data and export easy-to-use reports that identify clear and consistent loss runs over multiple policy periods to provide a more complete picture of problem areas. You can then deliver this information to your client, recommend strategic loss control actions, and track cost savings over time.

Another way to identify cost drivers and provide strategic guidance to help your clients save money is through mod analysis. Using a mod analysis tool, you can quickly and easily enter itemized payroll and loss data to get detailed mod analysis, including multi-mod comparisons, frequency vs. severity reporting, and more. You can then use this data to educate clients about the importance of the minimum mod and help them develop reduction strategies.

When categorizing risk exposures, focus on these four groups:

  • Property loss exposures
  • Liability exposures
  • Business income exposures
  • Employee safety/personnel exposures

Funneling potential issues into one of these areas will help you identify and simplify the problem in order to create an intuitive, pointed plan for mitigating those risks.

  1. Develop Strategies: Help Your Client Create a Plan

Now that you and your client know what risks they’re exposed to, you can start strategizing for different ways to reduce risk exposure.

While each client’s plan will vary depending on the specific risks, some solutions to consider as you navigate this second stage of the risk management process include:

  • Creating a safety committee
  • Developing a pre-hire screening process
  • Drafting a drug testing policy
  • Improving employee orientations and training
  • Creating post-accident procedures
  • Improving employee communication and documentation
  • Creating light-duty return-to-work policies
  • Enhancing an information policy
  • Finding ways to risk transfer

Compile the relevant strategies and form a cohesive plan that will help your client mitigate and better manage the risks they’re exposed to. They’ll need this plan to get buy-in from leadership and develop trainings where necessary, before implementing strategies.

  1. Implement a Program: Put the Plan into Action

For your client to fully implement their actionable plan, they’ll need top-down engagement. That means both senior management and entry-level employees alike have to be committed to using this program to reduce potential worksite hazards and health risks.

Ideally, the company would form a committee whose purpose is to implement the program on all levels. If a full committee is not possible, at least one person needs to be tasked with overseeing, managing, and measuring the new program. Communication is key in driving change.

There are a variety of solutions you can offer your clients to ensure consistent application and execution of their plan. For example, if safety is a concern, consider providing them with an online learning management system to ensure consistent, trackable employee training. Utilizing this type of solution, you can customize a safety training program to fit the specifications outlined in a risk mitigation plan, assign the related courses to relevant employees and monitor their progress.

Another way you can help support the risk management plan is through providing toolkits, guides and other resources to your clients. In fact, there are content platforms available to insurance agents that offer exactly these materials and more. As an agent, you can simply log into the platform, search the content library, and select and distribute specific pieces of content that apply to an individual client’s program.

  1. Monitor Results: Measure & Modify Your Client’s Efforts

It’s not enough to simply develop and implement a program. To close the loop, you must measure whether the program actually lessens the company’s exposure to risk.

To do this, be sure to monitor the total cost of risks prior to implementing a new risk mitigation program, during its initial implementation, and then later on as it becomes integrated as part of a company’s procedures. As your client continues to refine their program, they can prove ROI by showing improvements to their claims reporting or reductions to their mod.

An effective risk mitigation process will help minimize a client’s vulnerability to risk and accelerate employee learning. By guiding your clients through these four steps, you will help drive them forward and position yourself as an expert in risk management.

To learn more about how you can help your clients manage their risks using the latest training, analytics and content delivery technology, contact Zywave at [email protected].

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