Three insurance consulting risks and how to manage them

68775588_MRisk management has always been a key component of insurance consulting, as risk management is the heart of insurance itself. But today’s businesses face some risks that are not the same as even 10 years ago. That doesn’t mean, of course, that the traditional risks have gone away.

The challenge for insurance consultants is to stay ahead of the new risks as they emerge, while continuing to manage existing risks.

Data breaches

As we’ve been hearing in the news, data breaches are happening more frequently, and to larger numbers of people all the time. And while data managers add more and better layers of protection to their databases, hackers are using ever more sophisticated tools to get past them.

It’s not only giants like banks and social media companies that are being targeted, either. Specialized businesses often have detailed, critical information about their clients. The hackers are not only foreign players and blackmailers, either. More and more these days, breaches are caused by disgruntled employees.

This means your vulnerability is not only from legal sanctions and fines, but most important, loss of confidence of clients.

Automotive risk

This may not seem like a particularly 21st-century risk, but company vehicles pose a major insurance consulting risk as the number of cars on the roads continues to grow, traffic continues to get worse, costs for repairs rise and liability levels continue to increase. This seemingly prosaic risk is growing.

In insurance consulting, inform your clients about the true extent of risks posed in maintaining a fleet of company vehicles. Don’t forget that paying employees’ expenses for the use of their own vehicles does not necessarily protect the employer from liability when a vehicle in use on company business is involved in a collision.

Scope creep

This is a term that grew out of software development and project management, but it’s a reality in insurance consulting, as well.

“Scope creep” refers to the goals of a project increasing by tiny increments during its progress. Think of a client asking for “one more little thing” to be added to a project. All too often, these “little things” mean hours of work for the insurance consulting team, leading to higher costs and delays in completion dates.

The solution to scope creep is to rigorously define the scope of any project at the outset, and to make clear to yhe client and the project team that going beyond the parameters will trigger more costs and time.

Managing risk

Helping you to manage risk while developing new revenue streams is what we do at COST Financial. Give us a call to find out how.