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By Todd Chapman

By virtue of keeping your company’s risk exposure and losses to a minimum (hence, “Best-in-Class”), it will have a stronger chance of securing the most favorable terms, limits and conditions for its insurance program.

At its core, benchmarking is a process that allows a company to compare itself against industry peers to identify its areas of strength and weakness, and to help gauge where improvement may be needed. The comparison can be made in any number of ways and is often supported through sophisticated data which when generated and analyzed, can reveal industry trends and standards. A comprehensive benchmarking analysis can be very useful to companies that are actively building out or expanding their insurance programs.

For many businesses, access to this vital benchmarking information can help them make more thoughtful and educated decisions related to their insurance needs. They may learn, for example, that their liability coverage limits are not up to the current industry standards that have been established by their industry peers. The benchmarking analysis gives them the opportunity to identify and resolve these gaps before any losses should occur.

Perhaps even more importantly, benchmarking can show the correlation between strong risk management and “Best-in-Class” terms and pricing – raising attention to where a company might fall on the spectrum. With this important information in hand, companies can work toward improving their risk and loss profile so they can move closer to “Best-in-Class” status.

Clearly, benchmarking has its benefits. Yet, for companies that have minimal financial, analytical and/or technological resources, benchmarking may be challenging or unobtainable. This is where a professional broker comes in.

As insurance risks increase and rates continue to rise, it makes good business sense to enlist the services of a professional broker who has the knowledge and resources, including access to risk and analytical experts, to conduct a detailed and thorough benchmarking analysis and guide your organization toward reaching top tier status. The process should include:

• Risk management review: Assessing your current business operations to determine your risk/loss profile.
• Insurance program review: Evaluating your current insurance program across multiple categories and identifying potential exposures to risk.
• Peer review: Determining how your operations, risk management process and insurance program compare against peers of similar background, size, location and/or structure.
• Negotiation/placement: Negotiating for best terms and securing coverage that is aligned with current industry standards.
• Rinse/repeat cycle: Recalibrating each year to ensure that your company is keeping pace with evolving standards and trends.

With a pro on your side, your company or organization can benefit from a thorough benchmarking analysis that can help it reach or achieve “Best-in-Class” status and optimum program terms. There’s no need to go at it alone.

Todd Chapman is Executive Vice President and P&C Practice Leader for USI. Reach Todd at 513-852-6375 or via email at todd.chapman@usi.com.