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Zurich

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.

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Zurich’s Focus on Total Cost of Risk Sets It Apart

Zurich's expertise speeds up the identification of insights for risk management departments.
By: | September 15, 2014 • 6 min read
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Some business risk is easy to control, but much risk is difficult to predict. When it comes to casualty risk exposures, smart risk management organizations follow a “big picture” philosophy to reduce that difficulty.

Most of all, they pay close attention to the concept of Total Cost of Risk, or TCOR.

With that in mind, Zurich Global Corporate in North America (GCiNA) has effectively built its Domestic Casualty value proposition on the principle that nothing truly supersedes the calculation of TCOR as a means to reduce both premium and claim costs.

And, said Brandon Fick, head of Domestic Casualty, Zurich GCiNA, Zurich leads the casualty industry because it not only offers a TCOR proposition as a prime benefit to insureds, it also puts skin in the game to back up its TCOR beliefs.

“TCOR is a major focus at Zurich because it can be a clear differentiator,” Fick said. “There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”

Fick explained that in the large corporate business casualty market, companies typically take on the majority of the risk themselves through large deductibles and retention programs. Of course, they also buy insurance coverages for added protections. But in the very competitive casualty business, the drive for better ways to manage risk — all the factors that go into determining TCOR on an insurance program —are often pushed aside for the sake of price. That’s a very shortsighted approach, Fick said.

Fick said Zurich’s decision to focus on TCOR makes sense because it leads to high business retention and creates a strong customer-carrier interaction that ultimately results in keeping losses and costs down.

“We are always looking to help our customers drive a better outcome,” Fick said, adding that Zurich initially takes a holistic, 360-degree look at pre- and post-loss activity to see if a business is getting the most for its risk management dollar. “We offer data insights through sophisticated tools that can measure results and identify opportunities to improve.”

SponsoredContent_Zurich“TCOR is a major focus at Zurich because it can be a clear differentiator. There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”
— Brandon Fick, head of Domestic Casualty, Zurich GCiNA

Once Zurich performs that initial analysis, the company’s claims and risk engineering team jointly creates a detailed plan that will go a long way towards reducing both claim frequency and severity.

According to Fick, the Zurich differentiator lies in its extensive — and proprietary — tool kit, which has been years in the making.

In fact, about five years ago, a prospective customer was feeling some pressure in their program and was looking for a carrier that could help them identify areas that needed improvement. Zurich specifically drilled down into the customer’s transactional outcomes by using an internal tool to identify any potential missed financial opportunities through overpayment of claims. The result was a substantial savings of 20 percent that Zurich was confident they could deliver. When they told the client about their findings, the response was, “Prove it.”

So Zurich Casualty discussed the results in detail with the customer and offered something unprecedented — a guarantee that its analysis would prove accurate and deferred an amount of the total premium. The basic proposal was that if Zurich’s calculations were right, Zurich would recoup the deferred amount and receive a bonus too.

“Within two years, we knew we had proven our findings,” Fick said, adding that the experience gave Zurich the confidence to expand the program. “We concluded we have this unique tool, why are we not using it nationwide?”

The basic TCOR premise is taking a “forensic” approach when auditing the claims process. And while the original concept was focused on claims alone, Zurich started looking at the pre-loss side as well, delivering accurate ROI numbers to clients when they agreed to commit to the entire TCOR process.

“Big data is the buzzword today; everyone in the industry is talking about it,” he said. “We’re actually taking big data and using it to create a tailored solution for the customer.”

Zurich’s underwriting team has the company so confident, Fick said, in the impact their TCOR proposition will have on driving better outcomes. Their belief is so strong that they empower their underwriting teams to offer up front premium considerations that are normally afforded later in the relationship.

“Again, we want our customers to think of us as an extension of their risk department,” he said. ”I have yet to meet a risk manager who has commented about being overstaffed. Our customers realize they need partners; most of them don’t have the resources or tools to do an in-depth analysis of their results to identify where they may have some pressure in their program.”

Fick noted that Zurich Casualty’s TCOR approach is not for every customer. It really is set up specifically for customers who are dedicated to continuous improvement and are already using some form of analytics to help in decision making. They also must share Zurich’s belief in the value in collaboration and demonstrate the commitment to execute on Zurich’s TCOR recommendations.

“It’s a 6 to 12 month life cycle,” Fick said. “Before we even look at a number on a piece of paper it requires having a lot of detailed discussions with the customer so that we can understand what they have done to manage their risk.”

Zurich formally rolled out its complete TCOR core strategy during the first quarter of 2014. But, Fick said, the company has been implementing elements of the final product during the past three years. It started out on the claims side, but today covers every aspect of risk. Since it began using its TCOR strategy with clients in 2010, Zurich Casualty has increased its new business writings 270 percent — an impressive showing by any measure.

“This is the next wave of underwriting,” Fick said. “Everyone may be talking about big data, but you have to deliver insight, solutions and a differentiated product to the customer. We believe strongly that our TCOR proposition is that critical differentiator.”

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Zurich Global Corporate Casualty Takes Innovative, Unique Path to Success

By combining three areas of coverage, Zurich Global Corporate Casualty offers customers better pricing as well as improved collateral, coverage terms and conditions.
By: | September 2, 2014 • 5 min read
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Five years ago, Zurich Global Corporate in North America (GCiNA) began to create a formidable casualty practice.

Yet even with early successes, two years ago Zurich’s casualty practice made a dramatic change in the way it does business. In essence, Zurich didn’t modify its casualty product lineup, which is what other competitors typically do when trying to grow business. Instead, it changed its very culture by accomplishing something other casualty carriers had not tried (and have yet to duplicate).

At the time, Brian Winters, executive vice president and head of the casualty practice, Zurich GCiNA, pushed the organization to form a practice that brought domestic casualty, excess casualty and international casualty together under a single roof. Today, Zurich remains the only large global casualty market with all three areas reporting into one P&L entity. And, as Winters explained, Zurich has not looked back and is reaping the benefits of the energizing effect of its innovative market strategy.

“The main idea is to offer clients unique casualty coverage in a single, smooth, transparent process. We have no silos to manage,” Winters said, adding that much of the business being generated by Zurich’s unique approach comes from brokerages willing to adapt and forge new best practices. “Currently, we target specific customers who fit this mold. Most of all, it gives them consistency. For example, all three of those coverage areas can have the same effective policy dates, broker and risk manager buyer.”

Winters explained that while he was managing Zurich’s domestic casualty practice two years ago, his extensive work with clients in the field uncovered the fact that excess casualty and international casualty could be added to the mix. Customers often asked about the concept. But it would require a total rethinking of how to conduct Zurich GCiNA’s casualty business.

“Client feedback drove the synergies that led us to restructure the way we operate,” he said. “While we already offered a deep, comprehensive array of casualty coverages and related services for global clients, they wanted a simpler, more direct way of doing business.”

Winters processed that client feedback and — interestingly enough — it dovetailed with his team’s sometime inability to meet customer needs. Plus, clients (and brokers) told Winters that Zurich was a sleeping giant, with much potential in the casualty market. “We had the natural efficiencies to make this work, and not everyone can say that,” Winters noted. “Listening to customers and brokers saying that Zurich had it all and should be leading the marketplace, well that got the idea spinning.”

SponsoredContent_Zurich“It’s not typical in our industry that risk managers can go to the CFO and say they are able to take three casualty lines and get the best deals in collateral, pricing and coverage.”

— Brian Winters, executive vice president and head of the casualty practice, Zurich GCiNA

“This strategy is focused on a unique customer, but we have a definite advantage because our competitors tend to be organized around products,” he said. “We built this around customer need, not products. To do what we have done, you have to change your whole culture and structure. It’s not easy and others can’t be that flexible. They can’t turn that ship around.”

Basically, Global Corporate Casualty can give customers coverage in the three areas with a single coordinated proposal, rather than three individual proposals. That way, not only can customers benefit from better pricing, but they also can take advantage of improved collateral, coverage terms and conditions.

“We get a unique view of the insured’s culture as well,” he said. “When they buy all three coverages from a single market, it offers unique opportunities in areas including claims and risk engineering. It’s the best way to show Zurich’s value proposition.”

Winters says feedback from customers has been extremely positive, especially the idea of getting the best a carrier has to offer across multiple lines — something that is much easier to accomplish when the carrier’s P&L is managed by one business unit. Customers also favor that all three areas offer multi-year type of arrangements and good stability on important lines of business, that and Zurich’s proven financial stability in the market.

Of course, there are the built-in efficiencies in underwriting and enhanced performance guarantees, so if customers have service issues they can more easily get them resolved.

“It’s not typical in our industry that risk managers can go to the CFO and say they are able to take three casualty lines and get the best deals in collateral, pricing and coverage,” Winters said. “That offers a lot of attractiveness.”

Internally, Winters said the move has energized and galvanized Zurich’s teams across each line. You can literally sense the excitement when they are working together. The result is higher confidence levels among the teams, which translate into an enhanced customer experience.

Of the three lines, the most critical addition for Zurich was its ability to bundle international in with the domestic and excess, something that has not been duplicated. Our International Casualty group offers many unique solutions for customers and a real sense of confidence to brokers and customers about having a state of the art program. Very few markets can complete with this group or sophisticated program.

Zurich’s big advantage is the company’s proven ability to minimize risk on compliance issues — a very important and growing factor today with the way the global markets are changing. Large customers are no longer willing to take increasingly complex compliance risks. Along those lines, Zurich offers a state-of-the-art app, Zurich Multinational Insurance Application that can help customers in sorting out compliance issues.

“Making structural change is not easy, but has been well worth it for Zurich,” Winters concluded. “We have had a significant increase in new business across the casualty practice since its inception. Cross selling opportunities have been improving steadily across all of Zurich’s businesses. We continue to lead and exceed expectations and continue to improve. In the end, financial performance and customer retention are the true barometers of success.”

Brian Winters can be reached at brian.winters@zurichna.com. For more information, visit zurichna.com/corporatebusiness.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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3 New Unintended Consequences of Health Care Reform

Adapting to the ACA is creating unintended consequences.
By: | January 9, 2014 • 4 min read

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As the Affordable Care Act (ACA) continues its gradual and bumpy rollout, health care providers are utilizing various strategies to comply and adapt. Many of these approaches, some of which include M&A activity, IT upgrades and shared service agreements are now creating new risks of their own.

1. Continuity of Care

Many aspects of the ACA and other healthcare trends are driving M&A or shared service agreements among hospitals, physicians and other providers. These new relationships can present serious challenges for managing a patient’s treatment across different organizations.

“There’s a risk that one organization might not provide care consistent with the other,” said Dan Nash, national healthcare practice leader, Zurich in North America. “Oftentimes, it’s not contractually required for them to do so.”

Patients being transferred from system to system might be exposed to different approaches to care and different levels of treatment.

Care managers can do a lot to help alleviate risks associated with continuity of care. Having a “concierge” that knows how each system operates can make transitions much easier for patients and explain why treatments differ from system to system.

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“There’s a risk that one organization will not provide care consistent with the standards of the other. Oftentimes, it’s not contractually required for them to do so.”
– Dan Nash, National Healthcare Practice Leader, Zurich North America

“It creates a feeling that they’re working together,” said Dan Nash, national healthcare practice leader, Zurich in North America. “If you have a care manager through the process, it can give the patient a level of comfort that takes away anxiousness,” said Nash. “Then they feel like they’re being taken care of.”

2. Compliance

Between the Health Insurance Portability and Accountability Act, the U.S. Department of Health and Human Services and a long list of other government organizations and mandates, there are serious demands on health systems.

“Real estate may be all about location, location, location but healthcare is all about compliance, compliance, compliance,” said Nash.

A lot of risk managers are focused on digital-related exposures, but a significant amount of serious data breaches are still the result of “paper losses.”

“One example happened on a subway in 2009 when a hospital worker left records for 192 patients on a train,” said Nash about an incident involving a mid-Atlantic hospital “It led to the hospital paying $1 million to the government in 2011 to settle the potential HIPAA violations.”

Despite the risks, health care providers are still reluctant to buy coverage around it.

“People used to look at banks with an eye toward their brick-and-mortar locations. ‘My money is safe because it’s housed within those walls,’ they’d think. While that thinking is antiquated when dealing with finances, it still rings true in the health care world,” said Nash.

“Often customers we talk to say it’s important, but not in budget this year,” said Nash. Furthermore, their IT departments seem to think they’ve got the problem figured out on the digital side and companies generally don’t pay enough attention to the possibility of paper losses.

To help combat the risk, Zurich offers to qualified customers a Breach Coach consulting service, during which an experienced cyber breach risk engineering consultant can assess where businesses are most vulnerable to a data loss.

3. Outpatient Treatment

Currently, 60% of hospital services are delivered inpatient with 40% of care delivered through outpatient facilities. Under the Affordable Care Act, the proportion will likely be reversed, so that 60% of care is delivered through outpatient facilities.

“It’s risky because patients generally see hospitals as places where they are safer in the event of an adverse reaction,” said Nash. “They might not have that same sense of security with an outpatient facility.

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Nash compared that notion to the way many Americans thought about banks 20 or 30 years ago.

“People used to look at banks with an eye toward their brick-and-mortar locations. ‘My money is safe because it’s housed within those walls,’ they’d think. While that thinking is antiquated when dealing with finances, it still rings true in the health care world,” said Nash. “People feel safer and think they’re getting better care if they’re in a large hospital. At an outpatient facility, that comfort level isn’t the same.”

Another risk of having more outpatient procedures is that the health care provider has less time for observing patients. With patients going home after their procedure, it becomes even more important for the patient to carefully follow instructions: like taking medicine at scheduled times and doing proper rehab. Any health care provider can tell you that’s never guaranteed. But even if they don’t follow the care instructions, the hospital is still responsible.

This article was produced by Zurich and not the Risk & Insurance® editorial team.
Note: This content is provided for informational purposes only. Please consult with qualified legal counsel to address your particular circumstances and needs. Neither Risk & Insurance® nor Zurich are providing legal advice and assume no liability concerning the information set forth above.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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