Losses are “normal”… tell me about them…

By Ken Kukral

Maybe I have a different perspective than most, but having a claim is part of the business.  People buy insurance so that if they have a claim is paid, right?  So when your insured or prospect has a claim(s) they should not be looked at like a two headed monster.

Getting a competitive quote will depend on how you portray the claims or claims to the carrier.  Remember, there is always the “rest of the story” and the application or loss runs do not tell the whole story.  Some tips on how to show the account in the best light when going over the claims:

1. Don’t hide them.  Nothing worse than an application saying no losses and that changes when it is time to bind.  Nothing makes a carrier run the other way faster.

2. As a standard, get 5 years of loss runs.  Many may only need three years and some as far back as 7 years.  If they have been in business for less than 5 years, make sure that is clearly communicated.

3.  Don’t just attach loss runs.  Give a quick spreadsheet (especially if this is for a multi-line account) which synopsizes the losses over the five years.  If you know the premiums and can give loss ratios, that helps too.
4.  Give full narratives on any claims over $10,000.  What happened, when, where, extenuating circumstances, etc.  This will help to show if it is a fluke loss or a loss that happened because of the condition of the premises or how the insured runs their operations.
5.  Let us know if any improvements, loss control or risk management that was implemented to prevent or mitigate future losses.

6.  Advise if the loss is being subrogated.
7.  Make sure all the loss runs are there.  I can’t tell you how many times I went through the loss runs and some are missing.  If there any gaps we need to know the loss runs are on their way or cannot be obtained.
8.  Make sure loss runs are “currently valued”(less than 60 days old).  Even if last year’s loss runs, showed “no losses”, they can change.
9. Provide “no known loss letters” for any gaps in loss runs.  These need to be on insured’s stationary and be signed by senior management.
10. Explain if the risk has changed.  If they eliminated a tough exposure that the losses emanated from, they terminated an employee who caused a claim, they moved to a more protected/better constructed building, added a risk manager, etc.  You get the idea.  Tell us how the risk has improved and why you thing the chances for losses has been reduced.

11. Finally, give us your insight.  If you went out to see the risk and saw improvements in their operation, procedures or premises, let us know.  The more we believe you know this risk and have been out to personally inspect, the more credence and respect we will give your insight.

How a carrier views the losses can be improved dramatically by how your present them.  You want your prospect or insured to be viewed in the best possible manner with the carrier and how you anticipate their questions will save a significant amount of time and help you to get more timely quotes and favorable pricing.

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