2022 is right around the corner, and you’re likely busy planning for it. Soon, you’ll use important metrics, benchmarks, and KPI’s for strategizing. Knowing where you stand financially is critical to measuring your success and setting future goals.
You should expect your insurance broker to operate at the same level, using key metrics to quantify their performance on your behalf.
Sadly, most brokers use obsolete benchmarks established in the 1600s to quantify their effectiveness: exposure, rate, and premium.
Without a modern way of quantifying their performance, your current insurance broker is likely holding your business back from optimum performance.
If you want to pinpoint the financial impact of your risk management program, you’ll need to understand your cost structure fully.
Here’s how you can do that: Ask your current broker to:
- Provide a financial measurement of their performance. How has their work helped you meet your business challenges? If so, which challenges? And by how much?
- Tell you what your REAL costs are. These costs should include the Financial Leakage that exists inside your cost structure (the unbudgeted expenses of claim events) as they’re absorbed by your organization.
- Provide a detailed plan for reducing your costs in 2022. Make sure your broker translates these costs into your key metrics, such as EBITDA, margins, or surplus impact. Also, make sure this plan is implemented and assessed regularly.
If your current broker is unable/unwilling to meet these requests, you’re likely dealing with a broker who is simply selling you an insurance program.
Your business deserves better. To move your risk management program into the future of data-driven outcomes and ROIs, contact us today. We’ll provide you with a complimentary cost analysis and key recommendations to help you meet your operational goals in 2022 and beyond.