Best Practices for Implementing Alternative Insurance Solutions
So you’ve identified your organization as a good candidate forinsurance solutionsand a risk management program that will help you take more control, reduce your overall expenses, and preserve cash to reinvest in your business. Regardless of the alternative insurance solutions you’re looking at, or if you’re trying to identify the correct one, there are very important procedural steps you must take. They fall into 3 Phases; Planning, Implementation, and Monitor & Maintain. This post will walk you through what’s involved in each phase.
Hire the Right Professionals
Your Risk Management Services & Insurance Solutions Professional/s will quarterback this whole process. Whehter you hire someone internally or use a contracted professional, you want them to possess certain traits:
- Expertise – a proven track record of constructing, implementing, and maintaining these types of programs
- Communication Skills – ability to coordinate with you and clearly communicate status, objectives, progress, and the future course of action
- Problem Solving – the process of implementing these types of programs can have many twists and turns; a strong problem solver needs to be in place to adapt and overcome these issues
Your quarterback will also help you hire additional professionals that may be needed such as attorneys, actuaries, third-party administrators, and safety & loss control consultants.
Your organization is unique in terms of how it operates, its’ track record, and desired goals. The team will need to analyze your claims history, trends for you industry, operational procedures, and financial tolerances. This analysis will help identify a range of potential deductibles, limits, process changes, training needs, and Key Performance Indicators (KPI’s). KPI’s will be the measuring stick by which you determine if the program is performing as intended. Examples include total number of claims, total claims cost, total cost of risk, profit margin, organizational efficiency, etc.
Create Structure & Pricing Options
Using the information gathered during the Analysis process, your team of professionals will create one or several structures and pricing options. You will need to work with them to identify the pro’s and con’s for each option to identify the preferred structure moving forward. Keep in mind that each option might be suitable but may also have logistical characteristics that might not fit with your organization’s structure or culture. At the end of the day, the most elegant solution might fail if there is no buy-in or support throughout the whole organization. Leadership needs to champion the program moving forward and every level of the organization will need to buy-in, otherwise you will never realize its’ full benefit.
Choose & Schedule
Pick your horse and set a timeline for implementation. The optimal time to install this program is during periods when there is a low level of activity or when short-term issues will cause the least amount of disruption. Later on you’ll see that staging the rollout of the new program might be the optimal solution because it provides for a testing phase before a full-scale roll out. This is also the step where you will want to set a timeline of communication for your internal staff as well as any external entities that should be kept up to speed on what will be changed and when. Clear and timely communication will increase the chances of getting organization-wide support for this process.
Your new program structure will more than likely include new tools, processes, and communication procedures. Training is also an opportunity to identify issues in the process before it is even implemented. For instance, your staff may have common issues using a new piece of software. The solution may be to adjust the training process, adjust the software, or scrap it all-together and find an alternative.
Training will also need to be planned to keep current staff up to speed with the process and tools after implementation as well as to get new hires up to speed quickly. Finally, training will help make adjustments to the program during the Monitor & Maintain phase.
A la the movie Ocean’s 13, brand new businesses will often conduct a soft opening to get the bugs out of the system before officially opening on a full scale. This tool can be used here despite the fact that you’re already open and operating. You may be able to implement tools and processes in a progressive fashion as opposed to all at once. Or you could also implement the full-scale program for a small portion of the organization before rolling it out globally. This process will give you the opportunity, like in the training phase, to identify issues before they become much larger. Your test population will provide real-time feedback so you can adjust the program, processes, tools, and/or training.
It’s time to take the plunge. Again, communicate organization-wide and make certain that everyone is prepared and able to get the most out of this new, powerful program. Some pomp and circumstance might be warranted but that is totally up to the senior leaders to decide.
Monitor & Maintain
As is the case with the Risk Management Process (see the graphic above), your new program requires constant and consistent monitoring and maintenance. Elements will need to be adjusted or changed out, training will need to be updated or added, and process or professionals may need to be changed.
Regularly Review KPI’s
Consistently monitor your Key Performance Indications. They will let you know if the program is peforming as intended or if there are major issues. In addition, continue the communication process with the whole organization to let them know how things are going and to get their feedback. Weekly, monthly, and quarterly reporting will be necessary early on. As you dial in the program, the frequency may be dialed back. Make certain to deal with any red flags immediately. Small variations will occur but major variances could spell disaster if left unchecked until the year-end review.
Yearly Review of Process
A yearly review of the entire program should be completed. All appropriate stake-holders should be included in the review process. Feedback from the staff, KPI analysis, and even anecdotal evidence should be included. This step will also give you an opportunity to review the professionals that have been working with you to this point. Don’t fall victim to one of the deadly sins here (sloth)…once the review is complete, use it to identify beneficial improvements to make!
Identify Improvements & Implement
There are no Ron Popeil products in the Insurance & Risk Management world! This is a cycle and a continuous process of improvement. Once improvements have been identified, go back to phase 1 and repeat the process. Whether your program is humming along or needs large-scale, the same process will help you consistently identify those needs, implement the necessary changes, and analyze the program’s effectiveness.
Treadstone Risk Management has a deep expertise in this area and would love the opportunity to help you. Whether you need someone to help kick the tires on potential alternative insurance solutions, build and implement such a program, or help improve a program that you already have in place…Treadstone is able and available. Schedule a Consultation Today!