How To Choose a Risk Management Outsourcing Partner

risk management outsourcing

A successful risk management outsourcing partner must possess the vision, skills, education, experience, knowledge, temperament and tools to identify, mitigate and transfer risk. In choosing the right partner, a company must also determine if this individual or team possesses a good fit with your organization. The “outsider” must earn the trust, respect and credibility required to develop, create commitment and then execute the risk management plan.

Following are 10 expectations you should have of a risk management outsourcing partner:

1 – Policy and Endorsement Reviews

Your risk management outsourcing partner should commit to conducting policy and endorsement reviews to ensure policies are broadly written so there is a higher likelihood coverage will respond prior to the filing of a claim.

2 – Contract Reviews

Your risk management outsourcing partner should exceed compliance requirements by including a comprehensive contractual risk transfer analysis. Contractual risk transfer is the least expensive way to transfer risk. Also, if your outsourced risk manager can demonstrate to the underwriter how your risk is being transferred contractually, reduced rates and broader coverages can potentially be achieved for your organization.

3 – Bid and Accrual Support

Bid accrual and support assists you as the insured in pricing your products and services. The outsourced risk manager should also be prepared to assist you in projecting the impact of business changes on insurance costs.

4 – Loss Sensitive Adjustment Forecasting

This forecasting activity of how a loss sensitive program changes at various loss levels assists you in budgeting costs and cash flows.

5 – Experience mod projections

These projections help to inform you regarding the impact your experience modification factor will have on your Workers’ Compensation premiums. Predictability of information leads to better decision-making.

6 – Acquisition Due Diligence

Acquisition Due Diligence can provide you with a better understanding of the risks associated with a company being considered for acquisition. This includes an understanding of coverage, potential off balance sheet risks, strategic risk planning and risk infrastructure. This information often assists in negotiating a lower price.

7 – Cost Benefit Analysis

This analysis leads to better-informed decision making particularly with optional coverages and determining the appropriate retention / deductible levels.

8 – Coordination of Loss Control and Claims Support

This level of support is designed to achieve results and not be duplicative or to stifle the goal of making money or achieving the mission.

9 – Mid Term Stewardship Reports

Your risk management outsourcing partner should commit to issuing these reports to demonstrate it is focusing on areas important to you as the insured and to make sure if there is a mid policy year correction, it can be made efficiently.

10 – Developing a Strategy and Managing the Marketing of the Insured to the Carrier

This activity will help you to know your insurance program is the most comprehensive and competitive program available. Your outsourced risk manager should avoid market confusion by using a consistent submission in the marketplace, separating you from others through the level of detail and depth of knowledge, enabling qualified carriers to provide broad coverage and services at a competitive price.

Contact us below to request a risk assessment and discuss how KMRD can become your outsourced risk management team.

How KMRD Can Help:

KMRD delivers risk management and human capital solutions to over 600 clients nationwide. Our award-winning team, disciplined approach, proven processes, combined with our risk management portal make KMRD the leading choice for companies looking to outsource their risk management team and reduce the overall cost of risk.


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