Budgeting for 2021 has begun! Has your insurance broker been providing more than the placement of your insurance program to help you plan for 2021? Perhaps they’re talking to you about new programs and funding arrangements. But did you know your insurance program’s pricing is the smallest component of the “true cost” of your risk control initiatives (especially when claims occur)?
To budget accurately, you need to see the COMPLETE PICTURE.
Here’s what you should be getting from your broker instead:
- An analysis of your existing Financial Leakage: What internal expenses can be controlled and recaptured to increase your performance? Your budget will be incomplete without measuring these critical expenses.
- An evolving plan to deliver specialty resources and projects to help reduce Financial Leakage’s corrosive effects on your bottom line. Once you identify all your additional expenses, it's time to recapture them.
- Quantification of your broker’s performance in impacting the metrics you care about (growth, sales, margins, to name a few). Knowing how your broker has performed in the past will help you measure their effectiveness in the future.
As you plan your 2021 budget, you deserve to know the complete picture of your financial trajectory. Keep in mind that 30-50% of your expense load in your risk control and insurance programs might be recapturable.
Your job is to ask the simple yet critical question of your existing broker: "How will you help reduce my costs and improve my operations during the next fiscal year?” If they cannot answer this critical question or fail to quantify the frictional costs of your Financial Leakage, you are likely to be under-served.
For a deeper assessment of your existing risk control program, contact our team today. We’ll provide a no-obligation review of your insurance programs and offer deeper insights so you can budget with improved confidence.