Thinking about adding one or two new lines of property/casualty coverage with your commercial insurance carrier? If so, you're part of a growing trend, and chances are your agent or broker is helping you down that path.
According to a new survey commissioned by Wausau Insurance, two-thirds (up from 58 percent last year) of financial executives said their agent or broker "always or usually" encourages them to place multiple (at least two) lines of insurance with one carrier.
And three-quarters of respondents said they would rather have their coverage priced by one multiline underwriting team than a separate underwriting team for each line of insurance. Among respondents favoring a multiline underwriting team, more than two-thirds said the multiline approach is more likely to ensure a fairer price, broader expertise and knowledge of their business.
The independent survey of 200 financial executives, the third annual Wausau Multiline Productivity Poll, was conducted by Guideline, a national market research firm. A similar sample of financial executives, from predominately midsize companies, was polled over the past two years with many of the same questions.
This annual independent survey continues to confirm key messages Wausau is hearing from its agents, brokers and their clients. Insurance buyers increasingly want carriers who can provide multiline coverage and services with a focus on the total cost of risk, including lost productivity.
About 71 percent (similar to 69 percent last year) of respondents said their agent or broker "always or usually" counsels them to consider the total cost of risk, in addition to the direct cost of premiums and deductibles, when considering property/casualty coverages. Another 22 percent (up from 18 percent last year) said their agent or broker "sometimes" counsels them to consider the total cost of risk.
Insurance buyers show a growing appreciation of indirect costs such as lost productivity. Wausau's benchmark data shows an upward trend of understanding of the total cost of risk among insurance buyers, and their agents and brokers play an important role.
For the first time, the annual survey shows more than half of respondents (52 percent, compared with 46 percent last year) regard the "total cost of risk" more important than "direct costs" when considering quotes for property/casualty insurance coverage.
Among other key findings:
* For the third year in a row, 60 percent of respondents estimated they save at least $2 in lost productivity expenses for every $1 saved by reducing claim expenses for workers' compensation. And for the second year in a row, about half of the respondents estimated they save at least $2 in lost productivity expenses for every $1 saved by reducing claims expenses for other lines such as general liability, commercial auto and property.
* A large majority of respondents (80 percent this year) continue to integrate multiple (at least two) lines of coverage with one carrier. Among those who have combined at least two lines of coverage with one carrier, 92 percent (up from 89 percent the past two years) said they achieved significant efficiencies (saving at least 4 percent per year).
* About 64 percent (up from 52 percent last year) of commercial insurance buyers said it would be an advantage to have multiple (at least two) lines of insurance with one carrier if their company experienced a catastrophic loss due to a natural disaster or terrorist attack.
* For the third year in a row, general liability and property (two coverages commonly combined in package policies) and workers' compensation and general liability stood out as the two coverage pairs most likely to achieve significant efficiencies when combined with one insurance carrier.
Regardless of the magnitude of risks--whether catastrophic or common--it is evident that most insurance buyers have a strong multiline focus, along with a growing awareness of how the total cost of risk affects their real bottom line.
MARK FIEBRINK is president and chief operating officer of Wausau Insurance. The full report on the 2007 Wausau Multiline Productivity Poll can be viewed at http://www.wausau.com/poll.
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August 1, 2007
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