Mitigating Rising Costs: Chasing the Right Rabbit

Cost increases are never good for business, and your risk management program is no different. For years, brokers have been telling you the best way to cut the costs of your program is through policy changes, deductible options, or new funding mechanisms.

Unfortunately, none of these “solutions” maximizes cost control.

They’re all variables in the cost of the commodity and are determined by the marketplace. When you go this route, you’re chasing the wrong rabbit.

But, there are some critical expenses inside of your program that you CAN control. Financial Leakage that stems from claims events is a great place to start.

What is Financial Leakage?

It is the additional, frictional, unbudgeted expense of a claim event that ripples through your organization and is absorbed by reducing your margins. Think of the operational disruption inside your organization that your insurance policy does not cover.

What can you do to mitigate Financial Leakage?

  1. Measure the areas where it’s occurring inside your cost structure. You need to know where the problem areas are.
  2. Determine how this Financial Leakage is eroding your profits, margins, EBITDA, and budget surplus (non-profits), so you can budget accurately.
  3. Work with a broker who understands how to recapture these costs using specialty resources designed to improve your business performance.

As an Analytic Broker™, we’re uniquely qualified to help you achieve these steps.

We’ll chase the right rabbit and measure the impact these unwanted costs have on your financial statement. Moreover, we’ll build a strategy to help you reduce them over time.

The end result?

  1. Improved profits
  2. Improved EBITDA
  3. Accurate budgeting

Let’s get started... Please contact us for a complimentary Financial Leakage Assessment to see what we can do for you.

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