Insurance Risk Management Basics

1. Insurance Risk Management Basics Philip Holdway-Davis Underwriting Manager Federal Pacific Insurance Limited Tonga & Samoa

2. Introduction • Malo • FPI • PHD • GIP • Yesterday: We learned “Why We Need Insurance” • Today: We learn some “Insurance Risk Management Basics” • But first: Some traditional insurance jokes (as this is going to be a much harder session)

3. Insurance 1

4. Insurance 2

5. Insurance 3

6. Insurance 4

7. Many Risks Threaten Businesses

9. Insurance Risk Management: • Some risks can be insured. • Some of the physical damage, consequential loss, crime and legal liability risks can be transferred onto the insurance industry • When accepting the transfer of risk, prudent insurers apply the basic principles of insurance underwriting: “Premium, terms and conditions commensurate with the risk” • The lower the risk the softer the premium, terms and conditions. The higher the risk the harder the premium, termsand conditions. • FPI will partner with you to not only underwrite your insurance risks, but to work with you to improve your risk.

10. Risk Improvement • “The majority of all loss is preventable” • “It is better to prevent a loss than recover from one” • “Look back to the past for instruction, and forward to the future for improvement” - Zechariah Allen, founder of FM Global 150 years ago. • “A CEO said ‘I got to take care of our bottom line’ our response ‘if you do not take these matters for improvement seriously, you may not have a bottom line to worry about’” • “Risk improvement benefits not only ongoing viability of a business, but ensures employees continue to have a job (and income) and the community does not suffer from a business loss from within its midst” - Noel Shakespeare, Risk Survey Services Limited, Upper Hutt

11. Risk Improvement = Loss Mitigation = • Loss prevention • Loss minimisation or reduction

12. The King of Risk Managers • Is - Jesus The Christ (Yeshua Messiah) • Parable of “The Wise & Foolish Builders” – Matthew 8:24

15. Jesus - King of Risk Managers Jesus words poetically interpreted for this weeks seminar series: “A wise manager will build their business on the solid rock of sound risk management principles.”

16. Insurance Risk Management – Business Property • The Federal Pacific Insurance Commercial Property Inspection Report • General & Housekeeping • Fire – 10 major causes • Fire extinguishers (churches etc.) • Welding & hot work • Warehouse storage • Kitchens • Security • Money • Arson & Waste Bins

17. Insurance Risk Management – Legal Liability • Legal liability • Risk management • Keep people safe • Other people’s property • Adequate staffing • Warning signs • Security measures • Document retention • Claims handling • Incident/accident form • Health & safety programme

18. Thank You