The site risk survey backlog is over 18 months long and runs into the thousands for many insurers.
Recent research conducted by our Chief Strategy & Partnerships Officer, Richard Thomas, identified a yawning gap in the number of Risk Consultants available to carry out surveys compared with the actual work required.
The challenge has been exacerbated by the recent pandemic. From my discussions with insurers the backlog is actually growing. One insurer disclosed that their ‘to do’ list ran into thousands of surveys. This is far from unusual – in fact other insurers have confirmed that this is now the norm, with the backlog stretching back over a worrying 18 months or longer.
What are the implications?
For insurers, brokers, and their commercial businesses this raises a number of issues.
1. How green is your footprint?
Putting the resource problem to one side, insurers face other risks. Even with a lean, efficient plan in place we are living through an energy and cost of living crisis. Fuel prices are rising at their highest rate in 17 years meaning the cost of conducting physical surveys has jumped dramatically. Also, ESG is an increasingly important topic for all stakeholders driving a desire to seek alternatives to reduce rather than increase your carbon footprint.
2. Getting it right matters
It is in everyone’s interests for risk valuations to be accurate and up to date. Underinsurance can be a very expensive shock for a client in the event of a major claim. Particularly as, post pandemic, they take their first steps to recovery. It is fair to expect that an underinsured claim will not reflect well on the broker or even the insurer. In short, nobody is likely to come out of this scenario well.
3. Checks and balances
A long list of outstanding surveys raises other red flags. Internal audit could well be expected to pick up on this as a risk for the insurer. In turn, a knock-on effect could be reinsurance problems if there is a belief that the size and shape of the overall risk on the books is not correct. Even reputational damage is possible without the right processes to identify and assess business risks with any degree of certainty. This is true for insurer, broker, and client alike.
What can be done?
With a stretched resource of risk consultants facing a seemingly insurmountable number of outstanding surveys there is a clear drive to work smarter, not harder. I propose a 3-step approach that involves breaking the backlog into three categories:
1. Identify the type of risks and the criteria where there is no substitute for an onsite visit by an experienced risk consultant. For these make best use of their time by integrating technology to complete the survey easily and digitally, in real time. Prepopulate risk data templates before the site visit and use smart phones and tablets to validate and collect the remaining data on site.
2. Where a lighter touch survey is appropriate align the risk engineer with the client remotely. An experienced risk consultant can guide the client using mobile technology to capture the information required and provide advice - adding value to the relationship.
3. When an onsite visit by a risk consultant is either not justified or not possible, insurers need to invest in developing and embedding property knowledge in technology systems. Building risk data templates and self-assessments supported by online e-learning solutions for customers is an efficient and effective way to involve clients in their own risk management.
If you would like to know more about how Risk Solved can help you reduce your backlog by integrating technology within your processes, get in touch now.