Loss Control: A Hidden Opportunity for Carriers

Raymond is Senior Practice Director at ReSource Pro Consulting.

Top Insurers Are Evolving their Loss Control Practice

Some time ago, I was interviewing an underwriting officer, and I asked him for his perspective on the loss control or risk management function. His response has stayed with me for a long time. He said that risk management was like a radio in a car, “You wouldn’t buy a car without one, but it doesn’t get you there any faster.”

Consider this fact: The only company representative that a policyholder is likely to meet is a loss control consultant or a claims adjuster. If they are one of the lucky 70% of people that never have a claim—you get the picture. Increasing customer expectations, changing demographics, new technologies, and bold competitor moves are driving insurers to be proactive in their approach to better understand their customers and to look at every interaction with a customer as an opportunity to improve customer experience delivery in a meaningful way. 

Our work is showing how the top carriers are evolving their loss control practice to create more value and strengthen the relationship between the carrier and the policyholder.

  • Investing in the Safety Consultant of the Future

The best-in-class carriers place as much emphasis on soft skills as they do technical knowledge. They are looking to change the image of the “inspector” type and position their safety consultants as trusted advisors, who are skilled at asking probing questions, understanding the client’s needs, and building customized safety plans based on a needs analysis.

  • Focusing On More Than Just Technology

Technological solutions may be part of an enabling solution, but it’s not just technology—it’s people, process, data, and technology. Today’s loss control professionals focus on the behavioral side of the organization. Does the right culture exist? Does the organization’s structure support adopting new safety technology tools? Are supervisors properly selected and trained to lead these efforts? 

  • Using Analytics to Guide Where Best to Invest Safety Resources

In the past, most carriers used criteria such as premium size and hazard grade to determine where to invest finite loss control resources. Today, the best carriers are using analytics to guide those decisions. In many cases these tools are built in conjunction with underwriting algorithms and work together. They may also include factors that trigger premium audit questions. Best practice is to design these tools at an enterprise level to share development costs and leverage learnings from other areas.

  • Employing New Measures and Thinking to Evaluate Impact

Placing a value on loss control is difficult to measure; however, we see carriers beginning to capture better customer data than ever before. They are starting to see connections between degree of participation and performance. How does participation in safety seminars and conferences, online tools, and actual visits affect claims record and retention? Carriers are deploying technology to capture cross-functional interactions but, more importantly, investing in business intelligence analysts to gain understanding.

  • Collaborating with Agent Loss Control Personnel

Most large agents have built their own loss control staff. Top companies have turned their attention on why and what can we learn. Where agents have good capabilities, carriers can improve reach and range by collaborating with agent loss control personnel. When we interviewed agents on our clients’ behalf, they told us they wanted safety staff who worked for the client, not the company. This is all a matter of perspective and approach. With the right skill set, as mentioned at the beginning of the article, carriers have an opportunity to create that trusted advisor experience. Joint planning can drive to better implementation, as the carrier can work with the agent to deliver an integrated plan that incorporates other activities the insured has in motion. Does your loss control staff understand the role they have in the sales process? Do they understand that customer experience includes the agent’s experience?

Nolan Perspective

We’re seeing the evolution of the loss control function from an underwriting-driven tool to a customer experience and retention tool. The best carriers are using this resource to strengthen the bond between the policyholder, the agent, and the carrier and to help create a differentiated value proposition.

The Nolan Company combines its Customer Experience Maturity and Functional Maturity Assessment with its Voice of the Customer Survey to develop an Opportunity Heat Map for loss control and safety services. Visit our Carrier Consulting page to learn more.