One of the most deceptive words in insurance is the one most used by nearly every industry and every agent and broker in the business: renewal.
That’s because too often, clients and brokers alike approach renewal with one purpose in mind — to review coverage and make sure the company is protected for one more year. Plus, the word itself has become synonymous with keeping things as is. Renewing insurance is just making sure things remain the same.
Yet business doesn’t remain the same. Business plans are not simply renewed; rather, they are revised, thought out, discussed and changed to fit with the long-term goals of the organization. You wouldn’t assume your client’s construction business – or any other business – will be exactly the same next year as it was the previous year.
So why treat your approach to insurance this way?
Instead, brokers, agents and risk managers should be thinking in a completely new way about how insurance can be incorporated not only into a client’s overall risk management plan, but into the core of the company’s business plan. Insurance coverage can, and should, be an integral part of an organization’s overall growth and continuity strategy.
Insurance As Operations
So if insurance policies aren’t something to be renewed, that begs the question: What should insurance be to a company? The simple answer is this: insurance policies are a vehicle toward helping your company plan and meet its long-term business goals. The more complex answer: the basis on which you can enhance your entire organization.
In fact, as a company builds up its organization, the same needs to be done for its insurance policies and risk management operations as a whole. Suppose your company is looking at expanding beyond its current value in five years. You should then be asking:
- How is the way you’re approaching insurance now going to evolve in that same amount of time?
- How will your current policies fit with where you’re going to be operationally in five years?
- How do you want your risk management operations to run?
- What improvements need to take place?
- What areas of concern need to be addressed?
This kind of questioning and thinking sets up even more possibilities. You start seeing your risk in broader terms and start identifying key areas for improvements that are needed to keep pace with your company’s strategic business plans. You will be able to see further into risk management viability, and what the company needs to do to operate efficiently now and into the future. What needs to be done now to ensure that any additional divisions or territories or workforce are supported? What elements need to be in place now to make that happen?
Adding risk management and insurance to the business planning process can help your organization flesh out those issues and come up with a more effective and workable game plan. For example, what benefits need to be in place? Can your current insurance carrier handle these new plans? If not, which insurance carriers should you be considering? What activities do you need to do now, to reach your goals in five years?
Insurance As Facilitator
When viewed as part of the enterprise-wide growth strategy, insurance can be the bridge that links different parts of your organization around a common goal — coming up with solutions that bolster the business plan and increase operational success.
That is where risk management and insurance planning can really benefit an organization. Planning now for future insurance needs means your organization can get the relationships in place to help facilitate that growth. Then, when the time comes for a more robust insurance program, the right people will be on hand to help it come to fruition. Don’t renew your insurance. Grow your insurance. Thinking broadly about insurance will open the door to deeper analysis of your plans and your organization’s readiness to meet those objectives.