Risk managers: 'Cycles are hitting across the board'
Advisen
Risk managers: 'Cycles are hitting across the board'
sBy Chad Hemenway, Advisen
Something is happening that has not happened in Stephanie Fisher’s long career as a risk manager: many lines of insurance are on the upturn when it comes to pricing.
Fisher, director of risk management and insurance at Quanta Services, has been buying insurance long enough to know markets are historically cyclical. But her job has been especially difficult this year because it “seems like the cycles are all hitting across the board,” Fisher said at Advisen’s Casualty Insights Conference in New York.
“Casualty, property…we have aviation exposure, marine exposure…it seems like I’m hearing the same message from everybody,” Fisher continued during the Buyer’s Perspective panel. “That has not been the case in my past. We’ve had maybe one of the areas having a difficult year but everybody else is flat. It impacts the message [I deliver] to senior management.”
Fisher said she has heard that not only are rates increasing in multiple lines, but also across all industries.
“Every risk manager I have talked to has found it to be particularly challenging,” Fisher said.
“Budget is king; volatility is not a good thing,” added Lisa Kerr, vice president of risk management at Henry Schein. She said senior management “doesn’t like surprises,” which is why relationships with insurance partners—brokers and carriers—are important. Communication is essential, and upfront talks allow for a risk manager like Kerr to get creative. For instance, gradual increases may be absorbed via multiple-year insurance contracts and partnerships can be maintained.
However, Kerr said, she “expects carriers to return the favor – be creative.”
Jane Sandler, vice president of global risk management at McKesson, said after a dozen or so years of a soft market her company can “understand the market has suffered losses and needs to raise rates.”
“We want you to be in business,” she said. “The sooner we know which direction [carriers] are heading, the better we’re all in a position to succeed.”
At a company as large as McKesson, a heads-up on market changes initiates creative solutions. For instance, she said, McKesson owns captives and can also retain additional risk.
Casualty insurance specifically is an “unusually large topic right now,” said Fisher. “A lot of [information is] trickling out.” But like the other risk managers on the panel, Fisher stressed the importance of communication.
“Blame it on your senior management if you have to,” she joked, “but at least just tell me.”
