May 19, 2005 by Canadian Underwriter
A brokers role may vary greatly from company to company, according to a position paper released today by the International Federation of Risk and Insurance Management Associations (IFRIMA).
IFRIMA believes that the current business model established by brokers and insurers does not give enough flexibility regarding the differences inherent between brokerage services for small, medium and large accounts. For example, IFRIMA’s position is that for larger accounts the broker relationship resembles an outsourced activity, which requires personal attention and service tailoring.
“The role of the broker is primarily an outsourced activity, providing additional resources to the risk management department in those areas for which it is not cost-effective for a risk manager to undertake such activities internally,” Susan Meltzer, IFRIMA president and assistant VP of risk management at Sun Life Financial, ON, says Risk managers determine the level of involvement a broker will have because not all insurance-purchasing organizations have an internal risk management function.
Activities IFRIMA believes a broker should conduct include: an advisory role with the main function of providing information to assist the internal risk in determining risk transfer strategy; a transactional role to help insurance buyers efficiently access the worldwide insurance markets by developing underwriting submissions, identifying potential insurance partners and designing client presentations; and, a servicing and administration role that may include proofing policy wordings, administration of premium payments and routine claims, issuance of certificates and more.
“This paper is being issued at the apex of a very active period for IFRIMA, which is positioning itself more and more as an active partner in the global risk management arena,” Maurizio Castelli, IFRIMA chairman and group risk manager for Pirelli SpA, Milan, says.