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Risk Management
Monday, May 1, 1989
Loyalties are vital

It is vital that companies view insurance as the final line of defence and employ good risk management principles to keep premium rates reasonable, says Fedgen GM John Towsey.
Fire is an area which has huge potential losses. Both insurers and the insured must work in close collaboration utilising sound risk management techniques and economical loss prevention methods. One major cause of fires in present times is arson. Frequently the perpetrator is a disaffected employee. The utilisation of fair and correct labour practices can do a great deal in reducing or eliminating this risk.
There is still a lot of volatility in the corporate insurance market. Mr Towsey feels one reason for this is a tendency of brokers to keep their corporate clients at arm’s length from the risk bearer in an attempt to maintain their own influence and standing.
Buyers are now looking for the cheapest deal at each renewal date, with neither party expecting anything more than a short term association. This type of relationship, whilst being quite satisfactory for commodity buying, does not suit the purchase of an invisible security product based on trust.
The few exceptions where insurer, broker and client meet regularly to resolve problems have proved that a long term association benefits all parties, particularly in cover, cost and loss prevention terms.

Copyright © Insurance Times and Investments® Vol:2.5 1st May, 1989
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