We had a great day out at Chester Zoo recently. We saw some amazing creatures and even got a glimpse of David Attenborough! Here are some of the photos I took. Most of the creatures they keep at Chester are rare, many even are endangered, including the Asian Lion and the Asian Rhino pictured here. They are both big dangerous animals but they have no defence against loss of habitat and other modern threats. I could not help thinking of the similarity to many businesses, which may seem to be doing well but might have no arrangements to defend themselves from some of the risks which could put them out of business. We all need to apply Risk Management to every aspect of our businesses and to every kind of risk.
Many people in the public sector find themselves in the stress-inducing situation of being responsible for the insurance function with very limited staffing resources to meet apparently insatiable demands, often now, as a result of recent restructurings, alongside other functions they are required to manage at the same time. So let me pass on some of the things which I found worked for me when I was at the sharp end, which I hope you can adapt successfully to your situation.
Firstly let us agree as to the particular challenges arising in the management of the insurance function, especially when you have to combine it with other duties. Three factors contribute to the difficulty, often unrecognised by senior management.
- Lack of resources. Not only has there been a reduction in the number of your staff but some of the most experienced have left and not been replaced. Or else they have been replaced by inexperienced staff with little or no training in insurance. It is not easy to delegate with confidence.
- No reduction in demands. The number of claims has not reduced in proportion to your resources. The time required for annual renewals is the same as it was. The need to give departmental managers feedback about claims and advice about their risks or insurance cover is as great as ever. Or greater, since they too are under increased pressure.
- Fluctuations in workload accompanied by deadlines. It never rains, it pours! Claims and other demands on your time do not spread themselves out evenly over the year, but there are strict deadlines for claims and for renewals, so you cannot postpone some to let you deal with others, let alone any other work you may have to do, with its own deadlines.
- Review systems. Make the time to review all your systems. Remember “the Three E’s”: Efficiency, Economy, and Effectiveness. In the management of risk, effectiveness is more important than the other two. It is more efficient to pay every claim without investigating it, but not a good practice. Establish key indicators. Make them SMART (Specific, Measurable, Achievable, Realistic and Time-related) and especially remember R for realistic.
- Consider carefully what to delegate. The advice almost invariably given is to delegate almost everything (to free you to manage). It is also almost always impractical when your staff are untrained and inexperienced, as well as each having a full workload possibly including other duties. Do not merely push all your problems onto your staff. But see (6) below.
- Dump the rubbish. Find ways to stop doing things that are more time-consuming than they are worth. I increased the excesses on most property policies and greatly reduced the number of items insured on All Risks policies. The premiums saved more than paid for the resulting uninsured losses. This saved a lot of time for other managers as well as for me, by cutting out a lot of claims, as well as saving time spent checking endless lists. It also made the renewals process easier. Next, I amalgamated a lot of specific policies onto a few blanket ones to reduce time in checking whether something was covered, as well as reducing the risk of something being uninsured by omission.
- Prioritise. Try to make time for things that might bring worthwhile results. Once I had reviewed cover to get maximum value for the premiums we were paying, I found that investigating liability claims was the most cost-effective use of my time. I also found that helping departments manage their risks better was worth the effort.
- Get the most out of insurers, brokers, claims-handlers, and solicitors. This involves a bit of a balancing act. They can all be helpful in providing lots of useful advice and training, so work at cultivating good relationships with them. However, remember who you are working for and do not let these outside bodies dictate to you: insist on getting service, including feedback on claims, when you need it, and be prepared to question their decisions or advice if you are not happy. I learnt a lot by asking questions and not being satisfied with incomplete answers.
- 6. Train. Look out for free or low-cost training opportunities for yourself and your staff, including any shared or part-time staff. Then see what you can delegate.
- Outsource selectively. Buy-in additional resources as and when needed to help iron out some of the fluctuations in your workload, and to obtain expertise you do not yet have. If carefully targeted and controlled, this can give good value for money.
If you do any or all the above things you should obtain the following benefits.
- Time. You can save enough of your time to enable you to do the things that really matter.
- Control. You will find yourself taking control of the situation rather than vice versa.
- Confidence. You will build your confidence and hopefully start enjoying the job.
- Savings! You will be able to save your authority money by reducing premiums, claims and uninsured losses (not necessarily in that order).