The policy once purchased and renewed with same data over and over again may not be beneficial. You may miss adding new benefits or highlighting the changes to Insurance Company eventually putting your claim into jeopardy. Here are few checks which one should always apply before renewal,
1. Start Work on Renewal of Insurance at least a Month in Advance
This helps you have a good window of time to your broker for floating your quote to more Insurance Companies and hence improves your negotiation power. It also gives you time add or remove features with proper consent based on quotes and market practices.
2. Employ Practical Risk Mitigation
Employing straightforward and practical risk mitigation, for e.g. Simple fire extinguisher installed at your office can give you a minimum 5% saving on Fire Insurance whereas an advance fire sprinkler system with night vision CCTV camera makes the premises more secure and good risk for Insurance. More such suggestions can be provided by your Broker.
3. Give as much Information Possible on the changes applied to the risk or change in any company policy affecting Insurance
Underwriters are under tremendous pressure. Giving them appropriate decision-making data make the underwriter more open to accepting risk at a lower price. Informing about various risk mitigations by you is vital for a good drop in quotes. For e.g. if your company policy has changed for the personal accident from 24×7 cover to cover only for accidents within premises, this need to be informed to the underwriter, through the broker.
4. Assess your Projected Claims Ratio
Say you are a small group of 20 employees. Cover for Parents in the Group Health Insurance Plan would result in a very high claims ratio. Though you would not be affected immediately, your future premiums with the Insurance companies will be drastically affected.
The packaging of a High-Risk product, with a little risk with one Insurer, for e.g. A Group Personal Accident can be packaged with a Group Health Insurance. Or a burglary Insurance (primary on first loss basis) can be packaged with Fire Insurance.
6. Share the Risk
By adding higher excess, deductibles, Co-payments to your Insurance plans, you can get a significant reduction in your costs. For e.g. While Insuring, a high Sum Insured for Fire increases the excess amount. Or another example can be adding co-payment for dependents in Group Health Insurance.
7. Work on Latest data
Ensure timely addition and deletion of the assets/manpower is sent to insured. Otherwise, during renewal ensure to review the existing or renewal data to understand the actual risk covered.
8. Ensure Correct Valuation
You should insure your assets with same valuation method. For e.g. Claims on damage to Building Structure are paid at the cost of re-construction. Hence, your coverage should also be a reconstruction cost and not market costs. This will bring down the costs to at least 30%.
9. Employ a Professional Insurance Broker
Brokers have experienced professionals in negotiating good deals with Insurance Companies. Finding a good broker would be key to your Insurance Costs Management. Always focus on value for Money and not the cheapest quote.
10. Get an Insurance Analysis or Audit done
Insurance Brokers also offer free/paid Insurance Audits or analysis, which provide a detailed assessment of your Insurance coverage and costs. For e.g. A good broker will assess whether your equipment has a Breakdown warranty on Assets/Equipment. If the warranty is valid, you don’t need to buy Insurance for Equipment Breakdown. Similarly, for group health Insurance they will access the reason for higher claim ratios and will suggest measures to control them.