Risk management 102 what you cannot find in a textbook
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Risk Management 102: What You Cannot Find in a Textbook. • Andreea S. Brezeanu Senior Consultant, EY www.linkedin.com/in/abrezeanu/. 1. Construction related insurance. A contractor or subcontractor could individually purchase insurance or purchase a Controlled Insurance Program (CIP)

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Risk Management 102: What You Cannot Find in a Textbook

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Risk management 102 what you cannot find in a textbook

Risk Management 102: What You Cannot Find in a Textbook


Risk management 102 what you cannot find in a textbook

  • • Andreea S. Brezeanu

  • Senior Consultant, EY

  • www.linkedin.com/in/abrezeanu/


1 construction related insurance

1. Construction related insurance

  • A contractor or subcontractor could individually purchase insurance or purchase a Controlled Insurance Program (CIP)

  • Generally, CIPs are designed for large construction projects with construction costs greater than $50m

  • There are two type of CIPs that can be purchased:

    • OCIP – Owner Controlled Insurance Program

    • CCIP – Contractor Controlled Insurance Program

  • Coverage provided under CIPs include CGL, WC and umbrella liability

  • Recommended to conduct a cost/benefit analysis

  • Advantages of CIPs

    • Peace of mind that all contractors and subcontractors have adequate policy limits

    • Centralized risk management through a single insurance program

    • Potential for profitability based on claims experience

  • Disadvantages of CIPs

    • Administrative burden

    • Long-tail claims exposure

    • Market risk if the insurance market hardens


2 coordination of benefits

2. Coordination of benefits

  • Practice to ensure that insurance claims are not paid multiple times when someone is insured under multiple insurance policies

  • One insurer is designated as the primary insurer, which means that claims are sent to that insurance company first

  • Traditionally, there is lost opportunity for recovery

  • This is a common practice in health insurance but it also applies to property and casualty insurance

  • EXAMPLE - Employee is involved in a car accident


3 difference in conditions dic difference in limits dil

3. Difference in Conditions (DIC) / Difference in Limits (DIL)

  • A DIC/DIL policy is designed to broaden coverage by providing additional limits of coverage for specific perils

  • Also an insurance policy to fill in the coverage gaps so there is uniform coverage regardless of location (i.e. local policies)

  • Most commonly found in global property portfolios or management liability policies


4 benchmarking

4. Benchmarking

  • Benchmarking is a way for a company to compare itself against its peers

  • There are various resources to assist in the benchmarking exercise

  • How benchmarking works

    • Determine industry/type of operations, revenue and employee size

    • Review limits, retentions and premium based on line of coverage

  • Benchmarking should be used as an indicator not as a final say


5 predictive modeling

5. Predictive Modeling

  • Companies are now utilizing data and creating predictive models for underwriting and claims purposes

  • In the case of Underwriting Predictive Modeling, models can be used to determine policy pricing

    • EXAMPLE – Telematics Auto Insurance

  • In the case of Claims Predictive Modeling, models can be used to assign and process claims

    • EXAMPLE – Slip and fall FNOL


6 legacy systems and new technology implementation

6. Legacy systems and new technology implementation

  • There is no denying technology plays an important role in our day-to-day lives and can be frustrating if not working properly

  • Companies realize they need to continuously improve how they interact with employees on the back-end and customers on the front-end

  • As you continue in the insurance industry, you will encounter a technology change and may even be involved in the process

  • Providing input to how technology should look or what functions is should have is an exciting opportunity

    • EXAMPLE – Claims software upgrade


Summary

Summary

  • Construction related insurance

  • Coordination of benefits

  • Difference in Conditions (DIC) / Difference in Limits (DIL)

  • Benchmarking

  • Predictive Modeling

  • Legacy systems and new technology implementation


Questions

Questions?

  • For additional information, please contact:

  • Andreea S. Brezeanu

  • [email protected]

  • www.linkedin.com/in/abrezeanu/


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