For most individuals the types of insurance cover taken out can be confined within a fairly narrow band. Their car, their home and its contents, suitable life insurance for the financially prudent and perhaps a few dollars spent on a travel policy when they book a vacation. For major companies, however, the risks to be contemplated are far more complex and measures needed to guard against their possible impact that much greater. Recent security and health scares have also shown that constant vigilance is needed to keep risk assessments and appropriate coverage completely up to date.
Essential to the process of identifying risk for corporate clients and acting as intermediary to match them with direct insurers, who provide the necessary policies, is the insurance broker.
With close to 30 years in the insurance broking industry, Nick Cousins, chief operating officer of Jardine Lloyd Thompson Limited (JLT), has considerable experience aligning corporate entities' risk exposures with tailored insurance programmes. "Our role is to work with companies assessing the calculation of their risk and then make available the full spectrum of insurance," he explains. "We demonstrate risk exposures and possible contingencies, create an insurance programme and source the market, talking to perhaps 20 or 30 insurance companies, to secure the most competitive premium and coverage terms for our client."
That can be for anything from physical damage to a company's assets to its liabilities to third parties or professional indemnity liability. Special contingency insurances such as the cancellation or abandonment of events can also be handled.
Widely-recognised professional career, varied and interesting
Citing the example of a food manufacturing and retail company, Mr Cousins points out the need for insurance for loss or damage to factory buildings, plant and machinery, stock and financial losses caused by business interruption following any damage. "If that happens," he says, "sales will be lost but salaries and overhead costs must still be paid. The insured company needs to assess their exposure to such losses and insure against all contingencies. JLT assist our clients in arriving at the sums to be insured against and to determine accurate monetary levels they should be considering for insurance."
Taking this advisory aspect further, JLT has created specialist divisions offering risk management, claims management consultancy and worker rehabilitation programmes. The former concentrates on advising clients about preventative measures and caters for post-loss remedial action. Claims management and worker injury rehabilitation management (WIRM) is regarded by JLT as a field with growth potential and a viable solution to controlling costs of Employees' Compensation insurance. It adopts the principle that, regardless of preventative measures, accidents will inevitably occur in, for example, warehouses, construction sites or restaurants. The WIRM programme aims, therefore, to return injured workers to the workplace as swiftly and cost effectively as possible. Comprehensive medical treatment is provided at discounted rates and each injured worker is given individual treatment or therapy. Through a claims management IT system, the causes of accidents are analysed to identify trends and minimise future incidents.
JLT, as part of a group ranked in the world's top five insurance brokers, must be alert to new uninsured risks. "When renewing property or business interruption policies, we now remind clients that acts of terrorism are an inherent exclusion in most such policies," notes Mr Cousins. "However, JLT specialises in arranging separate programmes covering terrorism and quotations can be obtained easily and promptly."
As yet, no major changes have been introduced because of SARS, the effects of which are still covered under most travel and third party liability policies. Few business interruption policies cover the effects on a business caused by SARS, though this may change in future.
With over 100 local employees, JLT prides itself in being hands-on for career development. Staff are set individual performance objectives and, in yearly appraisals, these are discussed and evaluated. On the broking side, a trainee can expect promotion to account management with a client portfolio leading, ultimately, to positions as assistant director and divisional director over a 10 to 15 year period.
Emphasis is placed on training and continuing education. As a member of the Hong Kong Confederation of Insurance Brokers, JLT's staff follow the mandatory "Continuing Professional Development" programme and trainees or junior brokers must pass the government's Insurance Intermediaries Quality Assurance Scheme examination before dealing directly with clients. Regular in-house seminars and industry courses are offered.
When recruiting, JLT evaluates the qualities most needed for specific positions. For example, in IT or accounting, technical ability is a prerequisite. In client servicing, requirements include business knowledge, computer skills and an outgoing personality. English language skills and an eye for detail are essential as, to date, all policies and correspondence are in English and JLT must ensure written terms are precise.
Reflecting on his years in the business and recommending it to others, Mr Cousins sees it as "a widely-recognised professional career, varied and interesting because of the changing needs of clients and something that is intellectually and, hopefully, financially rewarding."