GB Energy, a small gas and electricity supplier collapsed in December 2016. According to an article in the Financial Times similar companies could follow suit quickly. To blame apparently, are the rising wholesale prices that have exposed the fragility of such companies. Iain Conn, Chief Executive of Centrica in the FT article says “supplying energy is about more than just setting up a call centre, some independents do not have experience of managing risk.”
A company such as GB Energy with 12 employees is unlikely to have a full time dedicated risk manager. So how can an insurance broker help?
For many clients insurance and risk management is a small line item on their desk after finance, HR and any other major business functions they primarily look after. They often have many other pressing tasks they need to deal with on a daily basis. Risk management and insurance therefore often become an afterthought, which can be detrimental when proactive risk management is needed in a fast moving industry.
A good insurance broker should act as an extension to a clients’ internal teams, as if in-house, and is available to support the company whenever required. This allows the business to focus on other business challenges.
For example, a critical task a broker should carry out for the company is a risk exposure review including all the business stakeholders. This will allow the broker to get under the skin of a company. A broker will then assess the company’s risk appetite, processes around risk management, philosophy behind any existing insurance relationships, and help you plan through certain loss situations.
A good broker will help proactively identify potential issues and respond quickly and with authority to events and questions as they arise.
It should be noted that not all risk can be insured. However, that should not exclude a broker from conversations including all threats to the business. Insurance is one method of risk transfer which should be used for peace of mind once all other mechanisms have been considered.
Insurance broking is not just about placing insurance policies at the lowest premium. A broker can help clients evaluate their risk exposures, model frequency and severity propensity and help clients weigh up the best way to either retain or transfer the risks.
For further information, please contact Gemma Claase, Partner on +44 20 7528 4129 or email firstname.lastname@example.org