Reduce the Risk Boost your Bottom Line

1. JANUS
Risk Solutions
COMPETITION
&
Your Insurance Program
Is it being utilized to the fullest?
Risk Management Consulting

2. Many times a business owner or CFO says “My broker solicits quotes from
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multiple insurance carriers…” – this is not true competition.
Risk Solutions
This is like going to a car dealership; believing you got the best deal because
they sell more than one type of car and you had options. At the end of the
day the only thing a salesman cares about is that you bought from them. An
educated consumer does their research and becomes knowledgeable about
the product then takes that knowledge and creates competition.
When we assist our clients in managing their insurance marketing process we
typically find ways to save on average 33% of their premiums.
That is significant.
It’s time to find out how we accomplish this successful
Return on Investment!
Risk Management Consulting

3. JANUS
Risk Solutions
It sounds so simple but many companies do not employ
competition when procuring insurance.
Why is that -- when businesses around the world are
subject to competition daily?
It’s not personal it’s business … well is it? Don’t become a
prisoner of an
We understand that a relationship is valuable but you archaic way of
should still understand that cost. doing business.
The nature of the insurance product is adverse to There is a better
competition thus a company must become an educated way….
consumer and force competition.
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4. JANUS
What have the leading brokers been saying?
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CEOs from the world's largest insurance brokerages have some
interesting and divergent views on the subject.
•“… people just don't really understand … your profit as a broker or an agent, it
drives behavior and it drives behavior in a way that is adverse to what your
clients are paying you to do,” said Don Bailey, CEO of Willis North
America...
•“It makes no sense to me to be able to give volumes of business to insurers just
because you get paid for it and it may not be in the best interest of the client.
Legally they say that's good, principally and from a value proposition it can't
be negotiable,” said Joe Plumeri, CEO of Willis Group Holdings... Brokers walk this
walk many
•“I believe that if you as a buyer and myself as a seller agree that appropriate
compensation can come in the form of a commission, a fee, a contingent and times…
supplemental, that's an adult conversation that's appropriate,” said J. Patrick
Gallagher, chairman, president and CEO of Arthur J. Gallagher & Co...
It comes and goes
•“It's never a bad idea for our clients to know what we earn,” said John in the news but
Lumelleau, president and CEO of Kansas City, Mo.-based Lockton Cos... “...
We don't believe that there is anything even remotely related to a disservice to the business
our client base,” by accepting contingent commissions. “If there were, we quite
frankly believe we would have seen that in our results.” never changes.
•“I don't think contingent commissions are the litmus test for whether the broker
has a conflict of interest or not. All insurer carrier revenue streams…have
the potential of creating a conflict of interest,” said Dan Glaser, chairman and
CEO of Marsh Inc...
Risk Management Consulting

5. So what does all this mean?
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Why is the insurance product adverse to competition?
Risk Solutions
Consumer frequently do not shop their insurance; placing their fate in the hands of a
single agent/broker as their sole source of information.
Forget about all the talk on Contingency Commission
 Steering Commission – kickbacks to win insurance contracts
 Profit Sharing – Based Commission – resulting from claims/losses presented to insurers
This is just a show to keep you in
the dark.
Contingent Commission really do
not matter if you are utilizing
True Competition.
Risk Management Consulting

6. Why is the insurance product adverse to competition
TWO MAIN REASONS!!!!
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Risk Solutions
1. Broker - Carrier Relationship
Brokers have contractual relationships with insurance carriers (Many times hundreds of relationships)
based on:
1) Profit Sharing - Loss Ratio With so many contractual relationships they can’t all be their
number 1 provider. What may be number 25 for some maybe
2) Premium Revenue
number 1 for another.
3) Volume of Business
4) Insurance Carriers like any other business are profit driven; they have geographic profit center that different
brokers access and have to meet quarterly earnings.
2. Nature of the Business causes an inherent disadvantage when it comes to competition.
1) Complexity of the product. (Legal Document)
2) Financial soundness and quality of claim service unknown before a claim is ever reported.
3) Insurance Carriers are legally allowed to employ anti-competitive practices
4) Pricing and Underwriting is individualized for both consumer and carrier. (Each carrier views the risk
differently)
5) Insurance Carriers many times decides to get “in and out” of particular business segments.
6) Comparison shopping is difficult unless you understand the product
How many horses do you have on
the track? A horse doesn’t run it’s
best time running alone.
Risk Management Consulting

7. So what does all this mean?
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Transparency doesn’t change the nature of business
Risk Solutions
 How many carrier relationships can they truly represent?
 Misleading advertising – Brokers state they work for the
consumer but how can they serve two masters. Which one
ultimately pays more money – where’s the incentive?
 Insurance brokers are essential tools for businesses but not your
only tool in the tool box.
This is not to say your current broker
is doing a bad job but they are influenced When trust is absence,
by personal and business decisions. suspension rules…
The time and effort to
Aren’t we all … it is human nature. investigate your cost structure
and prepare a solicitation will
Just understand the relationship cost. help you get better control over
the risk factors that result in
higher-than-necessary
The consequence of not utilizing True Competition insurance cost and drive the
price of insurance premiums.
 Lack of Claim advocacy
 Not 100% sure of what you are buying --Don’t buy a list of
exclusions
 Naturally result in overcharges
Risk Management Consulting

8. JANUS
Key Elements of our unique consulting approach
and how they benefit your company
Risk Solutions
• Establish Benchmarks. Our experience is based on the multitude of everyday
practical business experiences spanning from every type of market scenario. We
are equipped with a combination of current market understanding and deep
industry knowledge thus for each client engagement we have the ability to establish
benchmarks to evaluate insurance and offers from a variety of brokers and
insurers.
• Careful Evaluation. We carefully evaluate all bids, and given our experience, we
are able to recognize a quality offer at the right price vs. one that is not as
favorable.
• Negotiations/Results-Driven. Our negotiation process is critical in achieving the
strategic goals set forth by your company’s management. We advise on how to best
respond to industry questions, interpret the value of recommendations and we
make certain that the proposals being set forth are receiving the highest priority at
the brokerage and insurance company level. We are not
brokers; we do
• Accomplishment. The proof of our capabilities is in our bottom-line results. Our not sell insurance
services have consistently helped client companies to achieve insurance premium nor represent
savings averaging 30%-50%.
insurance
Further, we consistently deliver a significant ROI to our clients on the consulting carriers.
fees they pay us. Over the long term the ROI recognized can be 10-to-1: That is,
the companies have saved a total of $10.00 for every $1.00 they have paid us in
consulting fees.
Premium savings have created new value for many companies: If you were to
invest that money back into your business what would the return on that
investment be? I would bet that the initial investment over time could produce a
meaningful ROI for your business, especially if you continued to realize those
savings year after year.
Risk Management Consulting

9. Learn more about
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Independence, Technical Skills and Competition
Risk Solutions
Janus Risk Solutions is a fee based risk management consulting firm that works only for
you and derives no income from either brokers or insurance carriers. As risk
management professionals, Janus Risk Solutions brings to the table technical skills that
enhance the risk management process, proper competition, independence and
uncomplicated advice. We serve clients ranging in size from middle market to very
large multinational corporations—in a wide range of industries and locations.
 A Broker should stand or fall on their own merits and
performance. Understanding relationship cost should
be in the decision process.
 Purchase of insurance is complex – utilize assistance
in soliciting and evaluating competitive bids.
 Help lower your cost.
 Know that you have the ability for the most
favorable selection process free of bias or favoritism.
Please Contact:
James King
Janus Risk Solutions, Inc.
(P) 551-427-7427
Jking@janusrisksolutions.com
www.janusrisksolutions.com
Risk Management Consulting