REVIEW GUIDE FOR CLIENTS

CLIENT SERVICE DELIVERY AIDE MEMOIRE

NAME OF CLIENT: ......

DATE OF COMPLETION: ......

COMPLETED BY: ......

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CONTENTS

SUBJECT SECTION

FOREWORD -

ACTION KEY -

GENERAL 1

Strategic Risk Management Issues 1.1

The Client 1.2

Risk Financing 1.3

Servicing Guidelines 1.4

PROPERTY

Assets/Material Damage 2

Goods in Transit 3

Riot, Strike, Public Disorder 4

Fidelity (Commercial Crime) 5

Forged Transfer 6

Money 7

Theft 8

Third Party Computer Crime 9

BUSINESS INTERRUPTION 10

LEGAL LIABILITIES 11

PEOPLE

Group Personal Accident/Sickness 12

COID 13

MOTOR 14

RAF 15

Motor Trade 16

BONDS & GUARANTEES 17

SUSPENSIVE/INSTALMENT SALE 18

MISCELLANEOUS (CONTINGENCY) RISKS 19

SPECIALIST SECTIONS :

MACHINERY BREAKDOWN 20

PLANT ALL RISKS

Owned Plant 21

Hired Plant 22

CONTRACT WORKS 23

Erection All Risks 24

Projects 25

MARINE

Hulls 26

Cargo/Transit/Stock Throughput 27

Liabilities 28

CREDIT/POLITICAL RISKS

Domestic 29

Export 30

CEND 31

AVIATION 32

eCOMMERCE/eRISKS 33

UNINSURABLE RISKS 34

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FOREWORD

This is the latest edition of a tried and trusted aide memoire developed over many years.

The team responsible for the project have sought to meet the following criteria :

1.  A full perspective on risk issues which will enable contact and broking staff to review client’s needs thoroughly.

2.  This document is principally a contact tool (and therefore items perceived as purely technical points have been omitted) and it should be used to prepare input for:

·  Agenda for - Strategy Meetings } As used by Account Executives

-  Cover Reviews } in both specialist and non-specialist

-  Renewal Presentations } roles

·  Manuals/Summaries

·  Uninsured/Uninsurable Risks Reviews

There are three concerns of which we need you to be continually aware.

Firstly security. This document must not fall into our competitors’ hands. It will reduce our competitive advantage if it is freely available to competitors.

Secondly we must not become superficial. This is not a checklist and it must not be allowed to inhibit original thought. Think about your client’s needs.

Thirdly use the specialist resources of the company to provide your client with the best possible advice. Do not attempt to “do your own thing” in areas which require specialist input.

ACTION KEY

To ensure uniform usage of the document, the following symbols are recommended :

ACTIONED, COMPLETED - ü

AGENDA – FOR DISCUSSION WITH CLIENT - A

COVER IN FORCE - OK

NOT APPLICABLE - N/A

RENEWAL QUESTIONNAIRE - RQ

RENEWAL DECLARATIONS - RD

NOT TAKEN UP - NTU

OUTSTANDING - O/S

COVER REQUIRED IMMEDIATELY - C

QUOTATION REQUIRED FOR CURRENT PERIOD - Q

QUOTATION REQUIRED FOR RENEWAL PURPOSES - R

RISK MANAGEMENT MANUAL - M

UNINSURED RISKS SCHEDULE - U

STRATEGIC DEVELOPMENT PLAN - SDP

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NO. /

ITEM

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EXPLANATION

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ACTION

1. /

GENERAL

1.1 /

Strategic Risk Management Issues

1.1.1 / Risk management philosophy / Does client have a current formal philosophy statement recognised by all sectors of the business and issued by the Chief Executive?
1.1.2 / Strategic development plan / Is our development plan for this client complete and up to date?
Are all action points in hand?
1.1.3 / Client reviews / Have all key decision makers been interviewed and the results recorded in the client review database?
Have all concerns arising been resolved?
Has feedback been given to the client?
1.1.4 / International links / Are service providers involved in other countries?
If so, is this addressed in the strategic development plan?
1.1.5 / Communications/Strategy/IT links / Have we considered closer links with this client, e.g. our personnel on site or access to our computer systems?
1.1.6 / Risk evaluation / Does the client perform any systematic evaluation of :
Financial Risk, e.g. currency and interest rate fluctuations
Event Risk, e.g. fire, storm, product liability
Operational Risk, e.g. product recall
Is there any systematic process for identification, quantification and mitigation of risk?
1.1.7 / Risk retention / Has a proper risk retention review been carried out?
1.1.8 / Business risk / Has a proper business risk analysis/risk assessment review been completed to prioritise all the risk exposures of the business?
NO. /

ITEM

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EXPLANATION

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ACTION

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1.1.9 / Futures, options, swaps / Does the client utilise any of these instruments to manage exposures? Are there any “insurance” products that would enhance the process
1.1.10 / Balance sheet provisions / Have you checked the balance sheet and accounts for provisions that can be more efficiently handled via an insurance arrangement
1.1.11 / Cost of risk / Is there a programme to measure the cost of risk on an ongoing basis?
1.1.12 / Loss history review / Analyse the client’s claims and loss data, and produce a statistical loss analysis. Put forward recommendations on the optimum level of deductible and/or self-insurance retentions.
1.1.13 / Group services ????? / Does your client utilise the services of : Yes No
Risk Engineering?
Risk Finance?
Forbes Reinsurance?
Transportation Risk Management Services?
Financial Services?
Guardrisk?
Credit and Political Risks?
Allied Products & Services? (Auto Factors/PPP)
Coidlink?
Aura?
Underwriting Solutions?
Personal Lines/Volume Business?
AF Wholesale Broking Division?
If the answer to any of these is in the negative, is there a plan to change the situation? /
NO. /

ITEM

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EXPLANATION

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ACTION

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1.2 /

The Client

1.2.1 / Title of insured / Obtain organisational chart, annual report, brochures, in-house newsletters, branch addresses, product line up etc.
Consider SASRIA/NASRIA one insured definition with particular regard to joint ventures and associates.
Have you distributed a copy of client’s annual report to all interested parties, e.g. Insurer, Service Team?
1.2.2 / Description of business / It is essential that every present, dormant or sold business activity of the client be disclosed, especially for Liability and Fidelity coverages.
Obtain supply, production and distribution flow charts.
Draft a business description that adequately describes all activities. Separately describe sold or dormant activities.
1.2.3 / Subsidiary and Controlled Companies/Overseas Parent/ Associates/Joint Ventures/ Dormant / Check if any are to be specifically excluded. Can we acquire any more of the business not currently held?
1.2.4 /

Disclosure of material facts

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Key principle of insurance; failure to comply may result in repudiation of a claim.

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1.2.5 /

Long term agreements

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Premium saving; payback. Informal discounts. Is there an agreement signed?

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1.2.6 /

Matters outstanding (claims, documentation, adjustments, returns, quotations and queries)

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Be fully informed and discuss.

Are outstanding issues properly recorded in all files? /
1.2.7 /

Client budget preparation/ timing/declarations/ adjustments

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Useful for client to know deposit premiums and subsequent declaration/adjustments; cash flow planning. Also remind re prompt submission of declarations, particularly Sasria BI within 45 days.

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NO. /

ITEM

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EXPLANATION

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ACTION

1.2.8 /

Premium payments

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Agree with client that premium must be paid to us no later than 30 days after renewal date. Consider premium payment financing prior to renewal.

If any foreign currency premiums are involved ensure that client understands what is required of him and that applications are completed timeously. /
1.2.9 /

Developments, expansion, new products, processes, take-overs, mergers

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Regent involvement at planning stage essential, e.g. :

New Projects
Project Delay
Sale/Purchase of Companies & Management Buy-Outs
These are not exhaustive. (Consult client technical staff where necessary). /
1.2.10 /

Client’s major competitors

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Sensitivities of client to Regent or perhaps same staff handling competitor’s business. While we can use industry expertise for client benefit, we respect security of client information. Use discretion.

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1.2.11 /

Benchmarking

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Against who does the client benchmark itself when comparing financial or other results?

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1.2.12 /

Legislation creating special exposures for clients and requiring specific risk management arrangements

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Identify legislation or by-laws which change exposures e.g. Public Authorities, etc.

Be aware of global trends when dealing with global clients. /
1.2.13 / Board resolutions, e.g. Fidelity or Liability limits, GPA benefits / Confirm with the client’s MD/FD extent of authority. Does he need to refer to his Board or can he make decisions regarding adequacy of Sums Insured, Limits of Indemnity, Indemnity periods, deductibles, etc. It may be appropriate to recommend that his Board should ratify the more important aspects of risk financing structures. We should help to prepare board papers.
1.3 / Risk Financing
1.3.1 /

Franchises, deductibles, aggregates

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Ensure precise application is understood by client especially where multiple deductibles can apply, e.g. a loss payable partly under a Motor policy and partly under a Goods in Transit policy which will incur a deductible under both.

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NO. /

ITEM

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EXPLANATION

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ACTION

1.3.2 / Choice of insurers, reinsurers, captive managers, wholesale brokers, reinsurance brokers / Consider :
q  Long standing relationships
q  Specialist capability
q  Financial strength
q  Uniform provision of cover
q  Check financial security
1.3.3 / International insurer selection criteria / The critical success factors are:
q  Claims service (some overseas non-registered markets can take up to 90 days after agreement of the loss)
q  Financial security
q  Global network
q  Underwriting flexibility
q  Ability to deal with captives
q  Risk control expertise
US and Australian markets should be a last resort.
1.3.4 / Market presentation / Consider a presentation to the market, which would include risk control performance. Involve client as appropriate.
1.3.5 / Placements outside RSA / MP1 forms must be used for all placements via captives or directly into an offshore facility which is not locally registered. RV7 forms for business placed with non-registered Insurers via Lloyds Broker.
1.3.6 / State of market / Give an overview of historical and projected insurance market conditions. Use media extracts to support your presentation. Keep your client up to date.
NO. /

ITEM

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EXPLANATION

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ACTION

1.4 / Servicing Guidelines
1.4.1 / Change of broker / Issues to watch out for when taking over an account from another broker:
q  Check the basis of wording, retroactive cover dates, and run-off cover provided by the expiring policy
q  Obtain a declaration of “no known incidents” reported at the date of changeover
q  Check for any joint venture insurance requirements
q  Obtain the previous policy wordings and cover notes to verify cover arrangements
q  Check on construction projects that may go beyond the renewal date
q  Check for any peripheral policies arranged by subsidiaries
q  Obtain information on sold and dormant business operations that were covered on a Claims Made liability wording
q  Check the location of business operations for territorial limits of coverage
q  Is there a need for DIC/DIL coverage?
q  Verify the current underwriting information, declarations and review information with the client.
q  Obtain detailed claim by claim experience last three years.
q  Check on current and outstanding claims – and responsibility for running off.
1.4.2 / Claims reporting / Review the system for reporting claims and emphasise the policy conditions and prescription requirements for reporting. Check whether any problems have been experienced.
Do you have a claims handling agreement with Insurers?
1.4.3 / Effective date of amendments / It is imperative that if changes are required arising from a discussion or meeting with the client, the effective date of the change is agreed.
Do not confirm cover until it is fully placed and then ensure that all material conditions are clearly understood by the client – and put in writing.
NO. /

ITEM

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EXPLANATION

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ACTION

1.4.4 / Other service providers/joint appointments / Loss adjusters, valuators, third party recovery agents, attorneys; service and wholesale brokers and other Regent Service providers.
q  Review scope of work with the service providers and their effectiveness
q  Ensure that there is a clear division of responsibility which is understood by all
q  Agree how fees are to be prepared/submitted and agreed.
1.4.5 / Renewal date / Consider moving the renewal date away from the client’s year-end and peak periods. Remember to deal with the SASRIA/NASRIA complications if the renewal dates are changed. Consider also tax legislation dealing with prepayments.
1.4.6 / Safe retention of policy documents
1.4.7 / Summary and Manual / Agree the format, distribution and deadline. Prior to renewal confirm to the client :
-  Scope of cover
-  Market used for placement
-  Limits of indemnity per occurrence and in the aggregate
-  Levels of deductibles per occurrence and in the aggregate
-  Self-insurance stop loss limits and aggregates
-  Basis on which premiums are adjustable
-  Claims handling arrangements and Loss Adjuster panel
NO. /

ITEM

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EXPLANATION

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ACTION

1.4.8 / Basis of our remuneration / Have you agreed a service programme in terms of the standard fee negotiation process?
If possible agree that additional income can be earned for non-core services (i.e. activities not envisaged at inception when agreeing our fee).
q  Construction projects
q  Acquisitions, disposals, mergers
q  Due diligence
q  Claims servicing for major losses and where the aggregate is burnt
q  Major extensions to cover
Ensure that fee proposal is signed off by Stratcom MD before submission to client
NO. /

ITEM

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EXPLANATION

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ACTION

2. / ASSETS MATERIAL DAMAGE
2.1 / Basis of Valuation / Emphasise the penalties from under-insurance and the availability of professional valuations. Don’t forget exchange rate fluctuations, duties and surcharges. Agree the basis of valuation first with Insured and Insurers and delete average if applicable. Recommended basis is VAT exclusive sum insured with VAT inclusive claim settlements but there can be circumstances where this is not possible. Check it out.
2.1.1 / Reinstatement Value / Consider for Buildings and Plant. Values at date of completion of reinstatement unless ‘Day 1’ basis used. (Remember all extensions)
(Not necessarily new for old e.g. suitable second hand)
2.1.2 / Alternative Replacement
(Output capacity) / With rapid development of plant and equipment, most equipment becomes obsolete fairly quickly. Insurers will not normally pay for more advanced equipment, even if the Sum Insured is adequate. Negotiate Alternative Replacement on plant/equipment with measurable capacity or output or investigate specialist markets.
2.1.3 / Day One/365 / Establish VAT incl. or VAT excl.
2.1.4 / Assets Declaration / Establish basis of declaration in line with above. Explain benefits and possible premium implications.
2.1.5 / Agreed Value / May be necessary basis of value for selected property e.g. works of art, obsolete stock, churches.
2.1.6 / Indemnity / Reinstatement value less depreciation
2.1.7 / Market Value / Selling price for property other than stock. For stock, replacement cost at time of loss.
2.1.8 / First Loss / Agreed loss limit which is significantly less than total value at risk. Useful in achieving premium savings and/or where capacity is a problem. Delete average.
NO. /

ITEM