Why Outsource?
In recent years, numerous companies have added risk
managers to manage their business risks. However, twenty-five years of corporate
risk management experience convinces us that many of those same companies
could now reduce cost, gain flexibility and obtain a higher level of risk
management expertise through outsourcing.
Our analysis indicates that as companies concentrate
on their core businesses, their business risks stabilize, and consequently
their need for full time risk management diminishes.
In such environments, the majority of risk management
activities occur during a 45 day period each year leaving the risk manager
underutilized for the remainder of the year. Numerous other risk management administrative
activities fill the remainder of the year which are frequently duplicated elsewhere within
the company or by its insurers or brokers.
Some risk managers attempt to expand their responsibilities
by becoming more involved with loss prevention and claims management, but
lack the skills and experience to be effective in those areas.
The top reasons why companies outsource their risk management function
-
Reduce overloading of finance
department staff.
- Provide flexibility of services, only used as needed, not full time.
- Have a higher level of expertise and broader risk management skills.
- Eliminate head count, associated overhead, and redundant administrative
costs.
- Access broader knowledge of the insurance marketplace and brokerage
community.
- Contribute expertise that may not be readily available, such as
Loss Control and Claims Management.
- Provide objective risk management expertise with no conflict of interest – no affiliations with brokers or insurance companies.