Frequently Asked QuestionsEverything you need to know about risk management consulting.
What are the key added value areas provided by the UIC audit process?
We find that, traditionally, there are misunderstandings between what companies believe is being transferred through their insurance contracts and what is actually being transferred. This is particularly important in property/business interruption, general liability, directors and officers, and cyber coverage. In addition, the rating basis and rates themselves are not appropriate, and they are not receiving value for dollars spent.
What are the current hot issues companies should be most concerned about in regard to their exposures?
A major area of concern would be the proper risk transfer of cyber risk across the property, E&O, Directors and Officers, and crime. Often, these are not properly meshed to achieve the highest available asset protection, leaving gaps in coverage, which stakeholders may assume are covered.
Another hot issue pertains to Directors and Officers coverage, as it is personal protection for executives and senior management. This sector is in constant change because of litigious and operational environments, as well as the response of the insurance industry products. It is rare that we do not find a minimum of five to ten significant issues within the management liability covers. These are critical but can be easily remedied.
Recent catastrophic events (i.e. storms, hurricanes, wildfires, foreign earthquakes) may also affect coverage and how direct losses and contingent risks are addressed, including supply chain interruption, business interruption and the mitigation thereof and speed of loss adjustment.
How are UIC’s risk management consultants different from brokers?
The insurance industry has been operating under the insurer/broker model as we know it for well over 600 years. That model is based upon an inherent conflict of interest. Carriers try and provide the least amount of coverage for the most amount of premium possible, and brokers are the vehicle of that model.
Apart from the contracts they hold with insurers, brokers also use a compensation method that’s ultimately tied to the amount of premium dollars sold rather than the effort put forth. Not surprisingly, brokers walk a tight rope between the interests of their client and that of their insurers. This issue grows with the fact that most companies have neither the time nor the inclination to learn the process of effectively negotiating coverage and premiums and monitoring the agents that are supposed to represent them.
That is where UIC differs and why we have flourished in this space as an outsourced risk management arm of our clients, truly representing their best interests in protecting their assets and creating a competitive atmosphere for their businesses to grow. We offer pure, independent advice, free of contracts or commissions from the insurance industry. UIC is solely for the client.
How would a company know if they could benefit from UIC’s services?
UIC offers clients a complimentary overview of their current risk management program. Based on our high level findings and experience, we are able to determine the value add we could provide both in coverage and cost. To arrive at accurate results, we encourage companies to spend some time providing the specific information necessary to complete an overview audit. We will then spend many hours reviewing those details, as we want to ensure each relationship will be beneficial to both parties.
What has been the typical ROI for companies retaining your services?
While UIC does not track on an average basis of results for all clients, the ROI for over 30 companies within our portfolio averages 12:1 over a five-year period. Our internal tracking for the first year is in the range of 3:1 or 4:1.
Are there industries which are more vulnerable than others when it comes to protecting their assets?
Companies with significant real estate holdings and plant equipment are typically more exposed. However, with the advancement of technology, contract transference of risk and legislative/legal/tax changes have impacted businesses which may not be heavily asset-based but may have exposures in errors and omissions and professional liability. Those that have high values in intellectual property and service based companies are also at a high risk from errors and omissions and professional liability exposures.
What should every company know about risk management and exposure?
Exposures and the transfer of risk should not be limited to the 90-day renewal process, but should be part of the cultural and core management fabric to remain competitive and protect the assets and the investment of all stakeholders. Professional and independent audits, like those provided by UIC, can provide invaluable tools to ensure the continued success of any enterprise.