COMMERCIAL BUSINESS INSURANCE
Commercial business insurance is not a commodity, but many businesses purchase it as if it were by using a quoting process. It may seem counter-intuitive, but when price drives the commercial insurance decision, it typically ends up costing the business more than it should. Instead of price, risk and minimizing it should drive commercial insurance purchase decisions.
The common practice is for a business to go through an insurance quoting process. This process is one in which all the business risk is bundled up and shopped around for the cheapest coverage for that bundle of risk. At INSURICA, we don’t see our job as helping businesses sell that bundle of risk. Instead, what we do is focus on working with clients to find ways to make the entire bundle of risk smaller before we even go into the insurance market sell it.
A Better Approach: Identify Drivers of Risk
The INSURICA approach addresses the drivers of risk associated with a business. This is where services like loss control, risk management, claims advocacy, and other services INSURICA provides to its clients come into play. We can also look at program structure, hiring practices, and dig deeper to find the things that drive that cost to eliminate or minimize them. This is a much better approach to commercial insurance than focusing on the bottom line pricing.
This approach of minimizing the risks that drive costs produces better outcomes for businesses, because there is not a competitive insurance market for businesses that have large bundles of risk. Whenever you quote your insurance out and you have this huge bundle of risk that you’re passing along to an insurance carrier, there’s not a lot of competition for that risk. You might be able to save a few percentage points by switching carriers every few years, but what you’re never going to do using that approach is reduce the entire size of that risk by any significant percentage over those few years.
The Key: Becoming a Best-in-Class Risk
At the heart of this INSURICA philosophy is making the company’s clients best-in-class businesses, which lowers their risk and results in better insurance coverage. INSURICA is a commercial insurance agency with deep industry expertise that enables INSURICA brokers to speak the language of their customers and have an intuitive understanding of their business functions. The result is a strong relationship that helps INSURICA clients become better risks.
It’s a different conversation that we have with our clients. We take the focus away from insurance premium pricing, using a process that identifies the drivers of cost. Then, we provide risk management services that help our clients implement fixes for those drivers of cost, and over time that transforms our clients into best-of-class risks. Our approach serves our clients much better. It is ideal for businesses that simply year after year keep trying to get their bundle of risk insured, all the time wondering why their nearest competitor pays much less for insurance.