In a recent survey JLT did with Airmic amongst risk managers, we found that many struggle to explain how insurance is helping their company to meet its goals and protects its balance sheet.
This is unfortunate, as risk managers can play an important role in helping CEOs and CFOs understand the strategic value of insurance as an enabler to help meet corporate objectives.
Lost in translation
Company’s often measure insurance in terms of premium reductions, deductibles, limits, exposures and cost of risk or claims against premium ratios.
These are important, but insular insurance criteria that are not directly relevant to the strategic and financial goals against which the company measures itself.
The board is focused on the key financial objectives such as earnings per share, cost of capital, market capitalisation, shareholder dividends and cash versus debt.
We believe risk managers need to translate the impact that insurance has on one or more of these corporate measures.
By speaking the right language, risk management ceases to be viewed primarily as a cost and becomes instead a strategic activity enabler that is aligned to the company’s key objectives.
How JLT can help
We can help you and your organisation evaluate the impact your work has on your company’s financial position. We are currently carrying out similar comprehensive studies for a number of our clients!
There are seven steps to delivering these projects, as outlined below: