Brokers better have answers. This is the message John Lafferty, manager of risk and insurance at Air Products and Chemicals, emphasized during his presentation at the 60th Annual Risk and Insurance Management Society Conference, held in Boston from April 25 to April 29, 2010—a conference that attracts over 10,000 risk managers and insurance professionals for a five day discussion on best practices.
Policyholders need experts that can provide risk mitigation solutions and opportunity optimization, said Lafferty; they don’t need a packaged answer that comes solely in the form of a policy.
For that reason, many risk managers are communicating and sharing ways and methods on developing key professional relationships—and finding brokers who are willing to offer solutions specific to their business, not just products for sale.
Lafferty suggests brokers have answers to key strategic and tactical questions—questions more and more risk managers are starting to ask.
Answering Strategic Questions
One question that is top-of-mind for all commercial policyholders is: Why you and why now? This question
Strategic questions include:
1) Why you and why now?
2) Can you demonstrate your ability to create value for this organization?
3) Did you develop the product, or are you just selling the product?
4) As a ‘middle man’ how can you stand behind your products?
Tactical questions include:
1) Are you able to commit to efficiencies in the delivery of these services in the future?
2) What companies are you having the most success with and why?
3) Beyond disclosure, prove there is not compensation bias.
4) Can you really perform on a time and expense basis, like other consultants?
Often risk managers and commercial policyholders pay too much for intellectual capital, says Lafferty. “If your broker is trying to be a value add,” then they should bill like a consultant—and that includes hourly rates and time sheets. “It’s time for brokers to be willing to charge like a consultant, and document like a consultant, so [policyholders] can make a decent comparison on what is being offered.”
Lafferty believes that more and more brokers are keen to move to this type of transparent, unbiased business model, “but [there is] a long way to go to get to the consultative process.”
Originally published on CITopBroker.com on May 5, 2010