5/27/2014 10:00 PM

Good Management Lowers Premiums

How do insurance companies measure good management? And, how does this measurement affect policy premiums?

Insurance companies judge management many ways, including attitude toward safety (cooperation with risk personnel), financially (credit checks), superficially (housekeeping, deferred maintenance), and in depth systems analysis (employee selection process). Positive results earn schedule credits, which reduce premiums. Schedule credits enable insurance companies to reward those conscientious managements that have a long-term commitment to reduce losses. The insurance company wants to partner with risk-avoiding management, so they lower premiums to attract these risks. Insurance companies use diagnostic tools to measure the quality of management. Accounting measurements, physical property surveys, human resource surveys, psychological tools and, of course, loss history data combine to paint an overall management picture. Accounting measurements include reviewing financial statements, credit reports, tax forms, and management control systems.

Is everything up to date? Do all the data agree for an easy audit trail? Is the company candid about finances?

Physical risk surveys include a report on management results. An untidy workplace suggests lazy management or an undisciplined workforce. Neither is good for business or loss prevention. If in-house automobile maintenance facilities are not kept neat, management attitude towards maintaining vehicles properly is questioned. Neat, orderly premises imply pride in ownership and professional management. Deferred maintenance and chaos suggest either poor management, the beginnings of bad credit or absentee, uncommitted ownership. Sincere interest in loss control surveys, suggestions and recommendations indicates cooperation. Safety is a function of cooperative efforts. Taking corrective actions when asked, keeping OSHA logs up to date, knowledgeable responses to claims questions and having safety equipment on hand and up to date all indicate a safety culture appreciated by insurance companies.

How does the company handle employee recruitment and training, particularly drivers?

If this system qualifies employees in terms of knowledge, skill sets and attitude, more appropriate employees will be selected. The insurance company wants evidence of ongoing training for job-specific skills and safety. The psychology of risk management involves assessing the company's approach towards safety and loss control. Cooperation, responsiveness to recommendations, forthrightness in interviews, openness to inspections, commitment to safety and good record keeping contribute to management attitude.

The company interested in long-term profitability does not skimp on loss control or maintenance. Easily administered systems remind employees and supervisors of their safety culture. All these data are collected and reviewed to determine the management input to insurance premium rating: schedule credits. These credits must be rationalized by the underwriter. Schedule credits can impact premiums up to 25%. Good management pays well. Schedule credits are earned by well-managed, safety-conscious companies. Unfortunately, poorly managed businesses earn debits, increases in premium, the same way. Take a look around your business today and think about how you can earn a few more credits. And remember, we're here to help too.


Got something to say? Join the discussion ยป
  1. car insurance's avatar car insurance
    With the introduction of online auto insurance in India, you don't have to resort to traditional methods to make car insurance comparison. You can compare car insurance policies online effortlessly within a few minutes..Compare CarInsurance Prices and prevent yourself from getting deceived.Check https://www.gibl.in/car-insurance/
    Reply 3/26/2018 12:19 AM
  2. yanxia39's avatar yanxia39
    air max 95
    nike kyrie
    under armour jackets
    harden shoes
    ray ban
    nike lebron
    adidas nmd r1
    adidas nmd womens
    nmd adidas
    moncler jacket mens
    swarovski bracelet
    kyire 3
    mcm handbags
    moncler jacket
    skechers women
    nike air max
    coach purses
    burberry handbags
    adidas ultra boost
    ray ban sunglasses
    true religion jeans for women
    michael kors handbags
    jordan 11 retro
    nike air max
    asics shoes
    fitflop sandals
    kd 10
    yeezy boost 350
    oakley sunglasses
    coach purses
    goyard bag
    air max 90
    jordan retro
    mcm handbags
    adidas trainers
    burberry handbags
    prada bags
    jordan retro 12
    goyard backpack
    fitflop sale
    chrome hearts bracelet
    pandora Charms
    north face outlet
    true religion jeans
    air jordan 11 space jam
    chrome hearts bracelet
    salvatore ferragamo shoes
    pandora,pandora charms
    kd 9
    pandora charms
    salomon skis
    air max 95 black
    puma shoes
    ralph lauren outlet
    christian louboutin
    polo ralph lauren
    yeezy boost
    chrome hearts
    air max 90
    moncler,moncler jacket
    nike air max 90
    uggs for men
    adidas originals nmd
    fitflop sandals
    nike air huarache
    ray ban glasses
    pandora earrings
    ugg boots
    celine handbags
    nike air max 270 women
    pandora rings
    pandora earrings
    red bottoms
    north face
    ray ban
    barbour coats
    yeezy boost 350
    mulberry bayswater
    ferragamo shoes men
    ralph lauren dresses
    nike air max 2018
    nike air max
    balenciaga shoes men
    salomon speedcross 4
    red bottom shoes
    pandora rings
    yeezy boost 350
    Pandora Jewelry
    salomon speedcross 3
    prada wallet
    nike air max 270
    pandora bracelet
    fitflop uk
    birkenstock sandals
    moncler jacket womens
    curry shoes
    pandora charms
    kate spade
    Salomon Speedcross 3
    moncler jacket
    new balance 574
    burberry bags
    ed hardy clothing
    skechers boots
    pandora charm
    yeezy boost 350 v2
    barbour coats
    nike air max
    cartier love ring
    swarovski earrings
    polo ralph lauren
    ecco mens shoes
    nike shoes
    lebron james shoes
    skechers outlet
    bvlgari handbags
    curry 4 shoes
    kate spade bags
    air max 95
    air max 97
    mulberry purse
    adidas ultra boost
    lacoste shoes
    supreme jacket
    air max 97
    mont blanc pens
    Hermes Birkin Bags
    jimmy choo
    uggs on sale
    jordan retro 11
    yeezy boost 350 v2
    jordan retro 11
    michael kors outlet
    supreme clothing
    nike air max 97
    adidas yeezy
    kate spade handbags
    kevin durant shoes
    nike air max 97
    ugg boots
    Reply 10/21/2018 4:27 PM

Leave a Reply

 [Quick Submit with Ctrl+Enter]

Remember my details
Notify me of followup comments via e-mail