“I can’t reiterate enough how most
risk managers don’t know how to deal
with an M&A unless you’ve gone
She said she wouldn’t have been
able to manage the risk of the mergers
without her broker’s counsel.
GRADING THE BROKER
Mike Lubben, director of global risk
management at Henry Crown & Co.
in Chicago, sets standard expectations
of his insurance brokers: know the
exposures, understand how a risk
manager has to sell ideas internally and
understand the urgency of requests.
He lets his brokers know his
expectations with regular report cards,
complete with letter grades. And he
isn’t shy about giving out Fs.
How did the broker service the EPLI
Did the broker provide expertise and
Was there anything creative?
Did the broker recommend new
endorsements based on the previous
Did the broker recommend any risk
How well did he communicate and help
“A good broker will think this is
fantastic,” Lubben said.
This method starts the
conversation. It helps Lubben establish
long relationships with some stellar
brokers. But if the broker misses the
mark, Lubben can have a talk with
them about ways to do better in the
future. Some brokers he has sent away.
Recently a broker failed on what
Lubben calls “blocking and tackling,”
the basics like returning phone calls
within one day and responding
promptly to emails.
Lubben gave him an “F” on those
subjects and told him why. The broker
still didn’t improve his game and was
For many people, insurance can
seem very routine from renewal to
renewal. But a really good broker will
break from routine and come back
with some kind of enhancement or
If the renewal is flat with no change
brokers’ analytical and modelling
services across a range of areas.”
When participants were asked how
their brokers could be more efficient,
respondents put risk analysis at the
top of PwC’s survey list. Significantly,
more than a third also cited ‘big data’
FINDING THE RIGHT FIT
Paul Kim, Co-CBO of U.S. Retail
at Aon Risk Solutions, helps match
brokers to risk managers. He keeps in
mind that insurance companies tend
to sell product, while the clients are
looking to manage risks. The right
broker assists in mapping risks to
existing products and also customizing
broad solutions, he said.
“The risk manager’s job has
become more complex in the current
environment, but there are so many
tools available for those individuals
to make better informed decisions
that truly help protect the overall risk
profile of their companies,” Kim said.
That’s why finding the right
broker should be first and foremost,
he said. Look for an individual with
strong industry knowledge, product
expertise and market relationships.
A strong broker is able to effectively
communicate what the risk manager’s
goals are to the marketplace to be able
to execute and achieve those goals.
“Not every broker can do that,”
“Not every broker is the right
PwC said those brokers who
quickly master the art and science of
identifying ambiguous threats and
then mobilize a broad private/public
stakeholder pool to economically
manage those risks over time will pull
ahead of their competition.
“We’re really generalist,” Lubben
“Without the brokering
community, you would be hard pressed
to do your job. I really appreciate what
the brokers do, they bring a level of
expertise that we can’t possibly have on
all lines of coverage.”
When selecting a broker, the risk
manager should also take into account
the entire organization behind the
broker. Ask about the additional
support systems that are available to
the broker’s clients.
The company should have a deep
bench so when the primary broker is
out of the office there’s someone else to
rely on who is almost as knowledgeable.
The broker organization should also be
able to assist you with your budgeting
and forecasting from a financial risk
In PwC’s survey of risk managers,
nearly three-quarters want analytics
from their broker to help inform their
decisionmaking, with concerns over
new and emerging risks being a strong
driver for this demand.
Clark also thinks it is vitally
important for a broker to offer a claims
advocate, somebody on the outside,
when you are dealing with a carrier on
a complicated claim.
“Otherwise you are vulnerable to
what the carrier says,” Clark said.
To lead in this new era of risk, it’s
also important that brokers forge
close relationships with a broader
set of stakeholders that includes
governments, academia, specialist risk
consultancies and even their industry
peers, PwC said in the report.
It’s also going to be important to
develop shared databases and research
In turn, brokers need to assure this
diverse stakeholder group that they are
the right party to lead.
Clark, at Sentara Healthcare, said
she knows what her risk exposures are
today, but she’d like her brokers to
anticipate her needs before she does.
“It’s kind of crazy, but amazingly
some of them do it,” Clark said.
The broker will also use past
experience and industry knowledge
to anticipate where policy terms
and conditions can be tweaked and
“They will, say, advise us that we
need to change this policy language,
and then a year later you have a claim
on that and you thank your lucky stars
that they changed it,” Clark said.
“It is amazing to me every time it
JULIANN WALSH is a staff writer with
Risk & Insurance. She can be reached at
in premium, then Clark says she’ll ask,
“What are you going to do for me this
The best brokers are always striving
for better, she said.
Motivate International Inc., which
operates more than half of the bike
share fleets in North America, went
through a recent renewal.
Their broker, Marsh, explored
more than 10 options with different
strategies and programs. In the end,
after all of that, they decided the
expiring coverage was the best fit.
“Those exercises are very
valuable for risk managers,” said
Grant Barkey, Motivate’s director of
“As an innovative company
committed to delivering best-in-
class services, we believe thorough
exploration leads to informed decision-
A good broker understands that a
company’s day-to-day operations and
a highly effective risk management
program have implications for what
type of policy should be procured, he
Brokers need to partner with risk
managers to figure out what those
options are, and what the markets are
saying and then succinctly relay the
information to management.
They also need to have the tact and
curiosity to inquire about future plans
and figure out what resources might be
needed to better serve their client.
When PwC surveyed risk managers,
most put their insurance carriers and
industry groups ahead of their brokers
as the primary source of cyber and
supply chain risk solutions; yet these
areas are still cited as risk managers’
“Becoming the go-to partners
for developing and coordinating
innovative and effective solutions in
these priority risk areas is at the heart
of the commercial opportunity for
brokers.” PwC said in its report.
“Yet, our survey suggests that these
are important areas where brokers are
falling short of the market’s demands
and therefore need to adapt.
For example, less than a third of
respondents are very satisfied with
“The only way that the
relationship is going to be
successful is if you build a
tremendous amount of trust.”
—Frances Clark, director of risk management
and insurance, Sentara Healthcare
“The risk manager’s job has
become more complex in the
— Paul Kim, Co-CBO, U.S. Retail, Aon Risk