LIU's Technical Risk Engineering Process Offers a Win-Win Relationship for Clients and Underwriters
Liberty International Underwriters, a division of the financially strong and highly rated Liberty Mutual Group, (www.libertyiu.com), has been a major player in the marine insurance market since its establishment in 1999. LIU works closely with its insureds to examine their risk profile and, when necessary, makes recommendations to reduce potential liabilities.
When Holt Logistics, a Gloucester, City, N.J.-based marketing and corporate service organization that supports transportation and logistics management companies, was looking to update its marine liability policy, its broker, Connor Strong, turned to LIU for coverage.
The company had just undergone some changes in management and exited certain lines of business, which, on paper, seemed like an unattractive risk for many insurers. But LIU was willing to expend the effort to come in and perform an on-site evaluation of the company.
"We offer what we refer to as Technical Risk Assessment," says Steve Weiss, vice president of Marine Engineering and Project Cargo, based in LIU's Houston office. "We meet with the insured prior to their quote submission to discuss their loss record and operations."
LIU is currently the only marine and project cargo insurer that conducts engineering risk assessments with potential insureds and senior executives from underwriting, claims and engineering prior to policy binding.
"This process resulted in not only a more informed, more economical quote for the insured, but in many cases--such as with Holt Logistics--the insured obtained competitive coverage where they may not have been able to do so before, because what looked like a high-risk account on paper turned out to be a good risk once the insured had the opportunity to explain certain aspects of their operations," says Weiss.
"Technical Risk Assessment is a tool we developed in conjunction with underwriting, claims and risk engineers," he explains. "It's a tool we use to look at the account prior to underwriting to assess the suitability of the account, look at any red flags and gather more information about the potential client's operations. We physically visit and assess the potential insured's premises, have them explain their operations to us and ask questions about any concerns we may have.
"The key to the success of this process is the openness of the client to discuss any issues or concerns they may have, allows us to focus on getting to know the company, identify their strengths and weaknesses, meet with management and see the facilities up close and personal," says Weiss.
"In the case of Holt Logistics, we were able to offer them a policy at a fair price that was significantly lower than we would have been able to offer absent the visit. In addition, we were able to make recommendations to the client to reduce potential liabilities that they are now working to accomplish on an ongoing basis."
Weiss notes that clients have been extremely receptive to the Technical Risk Assessment process and appreciate the positive working relationships it fosters.
"While this process represents a significant expense to us, we believe it's well worth the cost," says Weiss. "It's a differentiating process that enables us to identify accounts in our target market, and promotes client buy-in to our approach to underwriting and risk management."
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September 11, 2008
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